3 EIE 020608 - Risk Managmement

3 EIE 020608 - Risk Managmement - Risk Management Ph.D HEC...

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Risk Management Fr é d é ric Martel Ph.D. HEC Lausanne Finance Professor Lyon,  June 2 nd , 2008
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2 Something  may  happen,  causing  something  else  to  happen,  where  the  effect  would  be  something  adverse. e.g.  Information  may  get  out  regarding  the  project  causing  key people to leave the company  where the  effect  would  be  the  inability  to  support  day  to  day  operations Risk : Definition
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3 Nothing Ventured
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4 Examples of Venture Sucesses Columbus’ trip to the new world You have heard from a Florentine that it should be possible to reach India by sailing west. Nobody seems to believe this but you are seeking a sponsor for this ambitious project nonetheless. It could be that great rewards in the form of booty are there for the taking, on the other hand…. Having received the patronage of Ferdinand and Isabella of Spain, your job is to set up the voyage and concoct the plans for the trip. Manchester’s Common-wealth Games The aim has been to create a friendly, trouble-free games bringing credit to the Manchester region through the warmth of the welcome, the competence of the organisation and the impression created by the urban environment and infrastructure. Your job is to manage the project which mounts all aspects of the games from the construction and commissioning of the facilities to the organisation and operation of the events. You will have to liaise closely with the City of Manchester authorities. Amazon.com set up Booksellers’ margins are high and the prospect of using the internet to sweep up a large proportion of the traditional High Street market is tempting. Internet selling can avoid the high fixed costs associated with retail outlets whilst providing high volume product throughput and a relatively low cost base. It is thought that most book sales result from customers who know what they want rather than those that browse. Your job is to set up the internet sales operation with a target of a financial break-even within 2 years of the launch date.
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Risks are inherent to every ventures Developing a Risk Culture Risks must be identified  Risks must be monitored Risks must be mitigated Risks must be regularly reported
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6 A Model for Risk Management Risk Identification - Workshop - Use - Checklist - Questionnaire Risk Analysis - Probability - Impact -
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