After studying this chapter you will be able to understand: Conceptualizes leadership as a process that is centered on the interactions between leaders and followers, makes the dyadic relationship between leaders and followers the focal point of the leadership process, challenged this assumption and directed researcher's attention to the differences that might exist between the leader and each of the leader's followers. | FACILITATOR Prof. Dr. Mohammad Majid Mahmood Art of Leadership & Motivation HRM – 760 Lecture - 25 Role of Leaders in Risk Management What is Risk? Risk arises from uncertainty; but all uncertainties do not carry risk. Possibility of an unfavorable outcome of an uncertainty is risk. Is Risk Management a development planning issue? Planners are responsible for the protection of company assets. Planners must work to improve shareholders’ value, which is not possible without taking some risks. Not taking risks may be the biggest risk. Why take risks? Because you have to. Because it brings rewards. Risk Management Process Risk Identification Risk Assessment Selection of risk management techniques Implementation Review Risk Identification Risk profile of a company Formal listing of all potential risks. External professional help Risk is inevitable; however unfavorable consequences of risk can be controlled. Classification of Risk Production risk Risk of inputs Risk of outputs Environmental risk Political risk Economic conditions risk Risk Assessment Having listed all the potential risks, ask: How likely is it for any of these risks to actually materialize? What is the maximum possible loss that can arise from each of the listed situations? Can you stand that loss? Risk Management Techniques Risk avoidance Loss prevention and control Internal controls Internal Control All that a company does internally to protect its assets, ensure the proper conduct of its affairs and accuracy of its records. Risk management is not just part of “protecting the assets of a company”, it is an essential feature of proper conduct of its affairs. Objectives of Internal Control That the company pays only what should be paid out That all incomes, expenses, assets and liabilities are properly recorded That the assets of the company are protected That the company’s records are reliable Tools of Internal Control . | FACILITATOR Prof. Dr. Mohammad Majid Mahmood Art of Leadership & Motivation HRM – 760 Lecture - 25 Role of Leaders in Risk Management What is Risk? Risk arises from uncertainty; but all uncertainties do not carry risk. Possibility of an unfavorable outcome of an uncertainty is risk. Is Risk Management a development planning issue? Planners are responsible for the protection of company assets. Planners must work to improve shareholders’ value, which is not possible without taking some risks. Not taking risks may be the biggest risk. Why take risks? Because you have to. Because it brings rewards. Risk Management Process Risk Identification Risk Assessment Selection of risk management techniques Implementation Review Risk Identification Risk profile of a company Formal listing of all potential risks. External professional help Risk is inevitable; however unfavorable consequences of risk can be controlled. Classification of Risk Production risk
