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Risk and Crisis Management Process

Course developer

Prior knowledge

VadZ6009, Finance and Investment Management

Course abstract

The course provides a detailed knowledge and practical skills in risk and crisis management related to identifying the nature of threats, the nature of finding the best risks, accepting, transferring, avoiding or mitigating risks to ensure business continuity. The course provides knowledge on how risk management turns into crisis management. The structure of the course will provide students with the opportunity not only to learn theory, but also to apply knowledge practically, building their competences in risk and crisis management.

Learning outcomes and their assessment

1. Knows and understands the main differences between crisis and risk management. Test.
2. Able to demonstrate in-depth knowledge of risk identification and assessment, types of risks, risk prevention measures, risk appetite and supervision of risk management processes.
3. Able to independently analyse and evaluate the company's risk management model. Independent work - preparation and presentation of a report
4. Able to prepare a report comparison - crisis management versus risk management. Test.
5. Able to responsibly plan and solve the assigned tasks. Independent work - preparation and presentation of a report.
6. Able to participate in classes and take responsibility for work results and their analysis. Able to present the results of independent work. Independent work - preparation and presentation of a report.
7. Able to recognize and explain in principle the main differences between crisis and risk management. Independent work - preparation and presentation of a report.
8. Is able to practically apply the acquired theoretical knowledge and practical skills about risk identification and assessment methods. Analyse the company's risk management model. Independent work - preparation and presentation of a report.

Course Content(Calendar)

Lectures (12 h) and Practical work (12 h)
1. Risk and crisis management process. The organization's ability to respond to negative events. Analysis of situations, development and implementation of action plans. Linking crisis management to risk management (lecture 2 hours, practical work 1 hours).
2. Risk management. Proactive approach: risk management as a proactive process. Focus on identifying, assessing and controlling potential risks. Main objectives: Ensuring control and transparency. Processes: risk identification, assessment, planning and implementation of measures, monitoring and control. Benefits of risk management (lecture 2 hours, practical work 1 hours).
3. Risk management as a process of company stability: planning process, possibility of loss reduction (lecture 2 hours, practical work 1 hours).
4. Crisis management. Reactive approach: focus on responding to negative events that have already occurred. Stabilization and restoration of the situation. Objectives: ability to respond to crisis situations and restore normal operations. Processes: analysis of situations, development and implementation of action plans (lecture 2 hours, practical work 1 hours).
5. Benefits of crisis management. Operational and strategic approach. Cooperation and coordination of institutions. Information analysis and resource management. Public trust and communication. Promotion of learning and preparation (lecture 2 hours, practical work 2 hours).
6. Difference between risk management and crisis management. Approaches: Risk management - proactive, crisis management - reactive. Objectives: prevention or reduction of risks. Crisis management focus on responding to events that have already occurred. Processes: risk management - planning and preventive measures. Crisis management - response and stabilization (lecture 2 hours, practical work 2 hours).
7. Control work - Risk and crisis management. (2 hours).
8. Presentation of the independent work "Risk and crisis management process in the company" - (2 hours).

Requirements for awarding credit points

Formal test. A "passed" evaluation can be obtained by obtaining at least 60 percent of each assessment component.
The evaluation consists of:
1) 20 points for the test - Risk and crisis management.
2) 40 marks for practical work - Difference between risk management and crisis management.
3) 40 points for independently developed and presented work - Risk and crisis management process in the company.

Description of the organization and tasks of students’ independent work

Study course materials research, analysis, discussion. Prepare for the test. Preparation and presentation of independently work.

Criteria for Evaluating Learning Outcomes

Study course assessment is a formal test, evaluation “passed” consisting of cumulative results from study course assessments.

Compulsory reading

1. .Aven T. Risk Analysis. 2nd Edition. Chichester, West Sussex, United Kingdom: Wiley, 2015, p. 197.
2. Hopkin P. Fundamentals of Risk Management: Understanding, Evaluating and implementing Effective Risk Management. 5th Edition. London: Kogan Page, 2018, p. 453.
3. Rodriguez E. Risk Analytics: Data-Driven Decisions under Uncertainty. CRC Press.2023. p. 469.
4. Sobel P.J., Reding K.F. Enterprise Risk Management: Achieving and Sustaining Success. The Institute of Internal Auditors Research Foundation. (IIARF). USA: Florida. 2012, p.225.

5. Sweeting P. Financial Enterprise Risk Management. International Series on Actuarial Science 2nd Revised edition. Cambridge University Press. 2017, p. 614.

Further reading

1. ISO 31000: Risk management – A practical guide for SMEs. Pieejams:http://www.iso.org/iso/iso_31000_for_smes.pdf
2. Madura J., Fox R. International Financial Management. Andover: Cengage Learning EMEA, United Kingdom, 2014, pp. 313.-347Megginson W., Smart B.S., Lucey M.B.
3. Robinson T., et al International Financial Statement Analysis (CFA Institute Investment Series), 4 th Edition. Hoboken, New Jersey: John Wiley & Sons Inc., 2020. p. 978.
4. Sobel P.J. Auditor’s Risk Management Guide. Integrating Auditing and ERM. CPA, CIA. Chicago: CCH. 2007, p. 657.

5. Welc J. Evaluating Corporate Financial Performance: Tools and Applications. Switzerland AG: Springer Nature, 2022.p. 324.

Periodicals and other sources

1. Guide on Enterprise Risk Management. Pieejams: https://www.coso.org/Pages/erm.aspx
2. Risku vadības ieviešanas rokasgrāmata. Pieejams:https://www.fm.gov.lv/lv/risku-vadibas-ieviesanas-rokasgramata
3. Risk in Focus 2024: Hot topics for internal auditors
4. 09/2023. Pieejams: https://www.eciia.eu/2023/09/risk-in-focus-2024-hot-topic-for-internal-auditors/
5. Šturca E. Risku vadības pievienotā vērtība stratēģijas plānošanā un īstenošanā. KPMG Baltics AS, 2021, 15 lpp. Pieejams:https://www.fm.gov.lv/lv/media/8427/download
6. The Committee of Sponsoring Organizations of the Treadway Commission (COSO). Pieejams: http://www.coso.org/-erm.htm
7. Krīzes situāciju vadīšana. Pieejams: https://www.vadiparmainas.lv/krizes-situacijas-vadisana

Notes

Elective course for ESAF professional Master study programme "Business Administration", restricted elective course for ESAF professional Master study programme "Project Management"