SYNDICATE 2

SIRAD HANDITO (29114730)

RADEN INDRA ADIKA (29114810)

KINANTY (29114770)

IEFTY RINJAYUNI NIPPARCHI (29114792)

FRANS JOFLIN PANGGABEAN (29114766)

ADITYA AISAR PUTRA (29114920)

PROFIT

GROWTH

UNBOUNDED
OPTIMISM

MAKE EXECUTIVES
IDENTIFY THEIR LEVEL OF
INTERNAL RISK EXPOSURE
MAKE EXECUTIVES NERVOUS

Not all risks are unintended. Most people would argue that
risk is part of doing business, so a good risk calculator

would only include the unwanted and unrecognized risks. It

is also not the goal to find one specific number to pinpoint

the risks of a company, but to give hints for improvement

2 illuminating exercises
of the risk exposure
calculator:

Managers can ask people at different

levels and indifferent functions

Managers can calculate their

companys current risk exposure and
then what it would have been 24
months ago

Types of
internal
pressures:

DUE TO GROWTH

DUE TO CULTURE

DUE TO INFORMATION MANAGEMENT

PRESSURE FOR PERFORMANCE

Are the aggresive stretch goals set from the top

down with little or no input by subordinates?
NO
(low scores)

YES
(high scores)

RATE OF EXPANSION

Are operations expanding faster than our capacity

to invest in more people and technology?
NO
(low scores)

YES
(high scores)

If companies are expanding at a faster rate than the

knowledge of their employees, it can lead to additional risks

IN EXPERIENCE OF KEY EMPLOYEES

Are the people inexperienced at what they do?

NO
(low scores)

YES
(high scores)

This can be a problem in times of growth, when key managers

are employed without sufficient training

No business can survive over the

long term without the
enterpreneurial risk taking that

drives innovation and creativity

In this pressure points of mix culture, we can calculate the

points based on these category:
Percentage of the
business is based on
new products and
services that have
been generated by
creative, risk-taking
employees

Based on information
particularly as it
flows upward

Based on internal
competition

Transaction
complexity
and velocity

Diagnostic
performance
measures

Decentralized
decision
making

Transaction
complexity
and velocity

Success can increase the intensity of risk

One signal that a high score is called for
is a felling of frustation

Decentralized
decision
making

When companies expand quickly, local

managers are often given a great deal of
autonomy to make decisions

Diagnostic
performance
measures

The levers are the mechanisms

managers to control the risk as a
company pursues its strategy

Have the senior managers communicated the

core values of the business in a way that
people understand and embrace?
Managers must do more and go through the
motions of writing a mission statement, visible
action, and prove the living document

Have managers in organization clearly

identified the specific action and behaviors
that are off-limit?
Managers must determine what behaviors and
actions could damage the business reputation and
declare the actions categorically off-limits

Are diagnostic control systems adequate at

monitoring critical performance variables?
Managers need to determine which performance variables matter most in
present circumstances and the design ways to ensure the key managers and
choose to focus diagnostic measures on operations, critical balance sheet assets
and the competitive environtment

Are your control systems interactive and

designed to stimulate learning?

The systems that force managers to engage in conversations about

strategic uncertainties. Any number of systems can be used interactively.
Using systems can continually assess opportunities and threats

Are you paying enough for traditional

internal controls?
Many organizations/companies was no longer use traditional internal controls
The main reasons:
To refocused and streamlined business, that make
companies more competitive
To remove the redundancy and middle management
oversight

Wont decrease an organizations risk

The risk
exposure
calculator

A suggestion where risk is growing

and an insight that managers can
take the steps to protect
organizations success

THANK YOU FOR YOUR ATTENTION