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Risk Management

Course developer

Prior knowledge

Ekon3115, Marketing

EkonB003, Macroeconomics

EkonB004, Microeconomics

Course abstract

The study course provides knowledge about risk management, its principles and importance in business and its practical application. The study course covers risk management techniques and approaches, risk assessment methods, principles of risk management program implementation and results in decision-making.
The aim of the study course is to provide knowledge and skills in risk identification, assessment and understanding of the importance of risk management in business, as well as competence in creating a risk management program for the enterprise.

Learning outcomes and their assessment

Knowledge:
1. Students will be able to: demonstrate the knowledge of risk causes and factors, the basic classification of risks and the classification principles – exam assignment.
2. Demonstrate the knowledge of risk assessment methods and stages, risk assessment scales and their role and application – exam assignment.
3. Demonstrate the knowledge of the process, terminology, strategies and methods of risk management, an understanding of the readiness of an enterprise to manage risk prevention and of risk culture and risk tolerance – test 1.
Skills:
1. Apply qualitative risk assessment methods and independently assess risks on risk assessment scales, create a risk profile and rank the risks by employing a risk map, a MARCI chart and a risk interaction map, reasonably select a proper risk assessment method for the risk profile and develop the risk management program – exam assignment.
2. Comprehend the role and importance of risk communication and identify the ways of risk communication and analyse the process of it – practical assignment 2.
3. Analyse and compare risk assessment methods and scales, assess an enterprise risk profile and identify risk functions in the enterprise and comprehend principles of decision making in risk conditions – test 2.
4. Identification of global risks, determination of impact and scale, analysis of possible solutions – practical assignment 1.
5. Responsibly plan the completion of the assignments given – exam assignments, practical assignments.
6. Present the results of a study (enterprise risk assessment) – exam assignment.
Competence:
1. Independently employ risk assessment methods and reasonably interpret the results – exam assignment, practical assignments.

2. Identify and classify risks in entrepreneurship, assess their causes, factors and functions and find solutions to enhancing risk management, is able to identify and argue the complexity and importance of global risks in society – practical assignments, tests.

Course Content(Calendar)

1.Nature of the risk, cause and factor of the risk, evaluation and implementation of the importance of risk management in the enterprise: standards and guidelines, risk results, risk functions (lectures - 2 hours, practical works - 2 hours).
2.Risk in modern society, global risks, their impact levels and potential solutions (lecture - 1 hour, practical work - 1 hour).
3.Risk management process and organization, risk management systems in the enterprise, risk management object and subject, risk management models (lectures - 2 hours, practical works - 2 hours).
4.Risk culture, tolerance and risk appetite, enterprise's readiness to undertake risk assessment (lectures - 2 hours, practical works - 1 hour).
5.Risk identification - process and methods, risk classification methods, risk type analysis, specification (lectures - 2 hours, practical works - 3 hours).
6.Establishment of the risk register, risk assessment, risk analysis techniques and methods (lectures - 2 hours, practical works - 3 hours).
7.Risk ranking and prioritization, risk interaction map, risk maps and profile creation (lectures - 2 hours, practical works - 3 hours).
8.Test 1 - risk management process, terminology, strategies, risk culture and risk tolerance (practical work - 1 hour).
9.Development of action strategies for the enterprise's risk profile, minimization methods, application and evaluation of techniques, development of risk management program (lectures - 2 hours, practical works - 3 hours).
10.Risk element in decision making, use of risk management results in decision making (lectures - 2 hours, practical works - 3 hours).
11. Risk communication assessment in the enterprise (lecture - 1 hour, practical work - 1 hour).
12. Test 2 - risk profile in the enterprise, action strategies in risk management, risk management program, decision-making in risk conditions, principles of risk communication (practical work - 1 hour).
13. Risk assessment in the enterprise - presentation of the independent work (practical works - 2 hours).

In part-time studies, all topics indicated for full-time attendance are implemented, but the number of contact hours is 1/2 of the number of hours indicated.

Requirements for awarding credit points

Exam.
The mark consists of:
-30 points for 2 tests – test 1 (15 points) on topics: risk management process, terminology, strategies, risk culture and risk tolerance; test 2 (15 points) on the topics: risk profile in the company, action strategies in risk management, risk management program, decision-making under risk conditions, principles of risk communication;
-30 points for practical 2 tasks – practical assignment (15 points) on the topic: identification and assessment of global risks; practical assignment 2 (15 points) on the topic: risk communication analysis;
-40 points for the independently developed and presented examination assignment (20 points for the development of an independent assignment, 20 points for the presentation of an independent assignment) – enterprise’s risk identification, assessment, analysis, risk management program development and analysis.
10 points are equal to one point on a 10-point marking scale.

Practical, independent tasks un exam must be submitted only within the time set for them.

Description of the organization and tasks of students’ independent work

Study of course materials (lectures and video materials) and literature (basic literature and supplementary literature) in the development of practical work and independent work and in the process of preparation for tests.
Preparation of practical assignments: practical assignment 1 – global risk analysis, determination of causes and factors, identification of possible solutions and analysis of the result, discussion in class; practical assignments 2 – determination and analysis of the company's risk communication situations.
Preparation of independent assignments (assessing company risks and development of a management program) and presentation.

Criteria for Evaluating Learning Outcomes

The exam mark is cumulative.

Compulsory reading

1. Wolker T. Risk Management. München: De Gruyter Oldenbourg, 2017, p. 360.
2. Hopkin P. Fundamentals of Risk Management. 5th Edition. New York: Kogan Page, 2018, p. 453.
3. Šuškeviča J., Šembelis R., Golko D. u.c. Riska vadības rokasgrāmata. Rīga: Dienas Bizness, 2005, 244 lpp.
4. Godfrey P.C., Lauria E., Bugalla J., Narvaez K. Strategic Risk Management : New Tools for Competitive Advantage in an Uncertain Age. Oakland, CA : Berrett-Koehler Publishers. 2020, p. 241.
5. Jaunzems A. Riska analīze un vadīšana. Ventspils: Ventspils Augstskola, 2009, 362 lpp.
6. Aven T. Risk Analysis. Second Edition. West Sussex: John Wiley & Sons, 2015, p. 197.
7. Lehtonens J., Siliņa Ruta, Ābelniece Baiba. Riska un krīzes komunikācija. Rīga: Biznesa augstskola Turība, 2011, 198 lpp.

Further reading

1. Pettere G, Voronova I. Riski uzņēmējdarbībā un to vadība: Mācību līdzeklis. Rīga: Banku augstskola, 2003, 176 lpp.
2. Frīmens E. u.c. Ārējā riska vadība (HBR). Rīga: Lietišķās informācijas dienests, 2010, 192 lpp.
3. Hillson D., Murray-Webster R. A Short Guide to Risk Appetite. Burlington: Routledge, 2012, p. 147.
4. Vose, D. Risk Analysis. A Quantitative Guide. John Wiley & Sons Publishers, 2000, p. 342.
5. Walker R. Winning With Risk Management. Singapore: World Scientific, 2013, p. 234.
6. Pinto C.A. Operational Risk Management. New York: Momentum Press, 2015, p. 128.

Periodicals and other sources

1. ISO: 3100 Risk Management, pieejams: https://www.iso.org/iso-31000-risk-management.html.
2. COSO. Enterprise Risk Management – Integrated Framework, pieejams: https://www.coso.org/Pages/erm-integratedframework.aspx.

Notes

Field professional specialization study course for the ESAF professional Bachelor programme “Business and Enterprise Management”.