Running Head Business 1

Name: Kaneez Fatima

Roll No: cb437247

Level: BBA (4 YEARS)

Semester: Autumn 2020

Submitted to: Mam Syeda Iram Bibi

Course: Fundamentals of Business (8402)

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Topic: Risk management

Table of Contents

 Introduction
 Importance
 Risk analysis process
 Risk Categories
 Risk Management Methods
 Limitations
 Examples
 Conclusion
 References
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Introduction:

Definition:

“Risk management is the process of identifying, assessing, and monitoring threats to an

organization’s capital and revenue. These threats or risks can come from a variety of sources,
including financial uncertainty, legal liability, strategic management errors, accidents, and
natural disasters.”

Effective risk management is essential for the business group activity. And we stay connected
shareholder growth through development and growth our activities as part of our risk aversion
with the board of directors have ceased,

We remember to achieve this aim accordingly everyone’s interests. We aim to strike a balance
between risks and we reward and continue to improve in our work and develop risk
management skills that will help you .Our growth plan is to provide a culture of control.

Risk management is at the heart of the structure. Out of the group. We went out on an
immortal journey income and capital to manage risk exposure agreed levels of risk appetite.
Managing our risks access involves thinning. Exposure, limiting losses associated with stressful
events and ensure that our overall financial position remains adequate resources.

Why Risk Management is Important?

An organization can save money and protect its future by implementing a risk management
plan and assessing various potential risks or events before they occur. This is because a strong
risk management plan helps the company establish procedures to avoid potential threats,
minimize their impact if they occur, and eliminate the consequences. The ability to understand
and control risk allows organizations to have more confidence in their business decisions. In
addition, strict principles of corporate governance, with a special focus on risk management,
can help a company achieve its objectives.

Other key benefits of risk management include:

 This creates a safe and secure work environment for all employees and customers.
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 This increases the stability of business operations and reduces legal liability.
 It provides protection against events that are harmful to both the company and the
environment.
 It protects everyone and property involved from potential damage.
 This helps identify an organization’s insurance needs to save on unnecessary premiums.

The importance of combining risk management with patient safety was also emphasized. In
most hospitals and organizations, the risk management and patient safety departments are
separate; they have different leadership, objectives and scope. However, some hospitals
recognize that safe and high quality patient care is essential to safeguarding financial assets and
should be implemented in conjunction with risk management.

Mason Medical Center in Seattle, Washington, integrated risk management functions in the
patient safety department and eventually developed operational methods for the Mason
Manufacturing System (VMPS) in Virginia. VMPS focuses on the continuous improvement of the
patient safety system by increasing transparency in risk reduction, disclosure and reporting.
With the introduction of this new system, Virginia Mason greatly reduced the remuneration of
hospital professionals and greatly increased the reporting culture. [ CITATION Ben \l 1033 ]

Risk analysis process

Risks is a problem-solving approach that uses a variety of assessment tools to identify and
classify risks for qualitative analysis, evaluation, and resolution. Here is the analysis of the risk
process:

 Identify current risks

This is primarily to determine brainstorming risk. A company gathers its employees who inform
this member of their opinion on various sources of risk. The next step is to prioritize the
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identified risks. Because, to reduce the risks to the members, the risks can be faced more
urgently with those who determine the priority of the song, which greatly affects their work.

 Risk assessment

Situations in the work program are about solving problems, defining the problem, and then
finding the correct solution. However, before imagining the best way to manage risk, a
company should ask itself: "What caused that risk and how could it affect the company?"

 Detail of the appropriate answer.

Once an entity has decided to evaluate asset solutions to reduce the identified risks and
prevent their recurrence, it should ask itself the following questions: What steps can be taken
to avoid the identified risk of recurrence? Also, what is best for you if you allow him to
reassign?

 Detail the prevention mechanisms for the identified risks.

Here are ideas that developers in roles find helpful in reducing risk and in contingency plans
that can be implemented later in the future. The plans can be applied if I have any risk.
[ CITATION Ris \l 1033 ].
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Risk Categories:

 Credit risk

Includes credit risk, counterparty risk, reconciliation risk and concentration risk. Such risks

It is defined as follows:

 Counterparty risk is the risk of credit loss for the counterparty group because colleague
to fulfill your financial and / or contractual obligations to the group. This type of risk has
three elements:
 Main credit risk
In case of default (EAD) arising from loans and banking production activities, including
your subscription;
 Pre-release credit risk

, e.g. EAD arising from unstable futures and derivatives transactions. This risk is due to
incompatibility the opposing party of the transaction and measured as the cost of replacement
trading at current market rates; Yes

• Issuer risk, e.g. EAD

Loan products and exchanged shares, inclusive your subscription in the main market.

 Liquid risk is the risk of loss for the group close a transaction with value Replaced, but
not received all or part of the counter value.
 Credit concentration risk is the risk of loss group due to excessive accumulation
exposure to a single equivalent, among others or equivalent segment, industry, market,
product, financial instrument or type security, country or geography, or maturity.
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When does this concentration usually exist? Number of counterparties involved activities and
similar characteristics, it can result in your ability to meet duties also affect changes economic
or other conditions.

 A risky country

Cross-border transfer risk, hereinafter referred to as: country risk, customer or his colleague,
including the governor in question, Being able to perform their duties to groups for reasons
outside the host country conditions in the host country.

 Reputation risk

Reputation risk arises from harm to the group an image of stakeholders that can harm both the
ability to continue and build a business. What a pity it may be due to faith, trust or Business
relationship.

 Insurance risk

This is a risk that presents and is associated with future receivables the costs will exceed the
expected profit established receivables and expenses assesses the duties of police owners and
specifies principles of product pricing. Insurance risk results uncertainty about the time and
scope of the future cash flow from insurance contracts differences in death rates, illness or
retirement, or due to deviations from investment results encourages assumptions and
assertions frequency and intensity assumptions short-term insurance products. Additional
insurance risk however disclosure is not provided for in this interim report annually according
to International Financial Reporting Standards Requirements (IFRS).

 Market risk

This is the risk of a real or real change market value or profit of the financial portfolio measures
caused by adverse market developments variables such as prices of stocks, bonds and
commodities; exchange rate and interest rate; credit differences; recovery rates and
correlations; how involved all the above fluctuations.

 Operational risk
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Operational risk is the risk of loss resulting from: insufficient or failed internal processes,
people and external systems or events. What includes information and legal risk only destroy
reputation strategic risk.

 Commercial risk

Business risk is associated with a potential revenue shortfall and / or based on cost
reputational reasons. Of economic capital enterprise venture capital requirements calculated as
the potential loss suffered in a year with a certain level of confidence as shown by the chosen
classification of the group by purpose the group's ability to earn income is affected without
another external macroeconomics environment, chosen strategy and reputation in the markets
in which it operates.

Risk management methods

Once the specific business risk has been identified and the risk management process has been
implemented, companies can implement a number of different strategies to address different
types of risks:

 Avoid the risk:

While it is rarely possible to completely eliminate all risks, a risk prevention strategy has been
devised to target as many threats as possible to avoid the costly and damaging consequences of
a harmful event.

 Risk reduction:

Sometimes companies can mitigate the damage that some risks can cause to a company’s
processes. This is done by adjusting or reducing some aspect of the joint project or process
plan.

 Risk sharing:
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Sometimes the consequences of risk are shared or spread among several project participants or
business units. The risk can also be shared with a third party as a supplier or business partner.

 Assumption of risks:

Sometimes companies decide that the risk is worth the business risk and decide to take a risk
and deal with the potential impact. Companies will generally hold a certain level of risk if the
expected return on a project is greater than the potential cost of its project.

Limitation:

While risk management is an extremely useful practice for organizations, its limitations should
also be taken into account. Many risk analysis techniques, such as model building or simulation,
require the collection of large amounts of data. This extensive data collection can be expensive
and may not be reliable.

Moreover, if simple indicators are used to reflect the more complex realities of the situation,
the use of data in decision-making processes can have disastrous consequences. Likewise,
making a decision based on a small, complete project can lead to unexpected results.

Another limitation is the lack of experience and analysis time. Computer software has been
developed to simulate events that could have a negative impact on the business. While cost
effective, these complex programs require trained staff with extensive skills and knowledge to
fully understand the results achieved. Analyzing historical data to identify risks also requires
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highly qualified personnel. These people are not always assigned to projects. Even if they do,
there is often not enough time to collect all the results, which leads to conflicts.

Other restrictions include:

 Bad feeling of stability.

Risk-taking actions focus on the past, not the future. Therefore, the longer things last, the
better the situation. Unfortunately, this is slowing down.

 The illusion of control.

Risk models can give organizations the false belief that they can measure and regulate any
potential risk. This can cause an organization to overlook the possibility of a new or unexpected
risk. In addition, there is no historical data on new products, so there is no experience to base
the models on.

 Not having the big picture.

The full picture of cumulative risk is difficult to see and understand.

 Risk management is immature.

An organization's risk management policies are not sufficiently developed and are not based on
accurate assessments.

Examples of risk management

An example of risk management would be a business that identifies the various risks associated
with opening a new location. They can reduce risk by choosing locations with high foot traffic
and little competition from similar businesses in the area.
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Another example could be an outdoor theme park admitting that its activity is entirely
dependent on the weather. When the season is bad, the park may choose to continue spending
it and increase its cash reserves to reduce the risk of high financial success.

Another example could be an investor who buys shares of a very valuable interesting new
company, even though he knows that his stock may fall sharply. In this case, when an investor
buys despite the threat, risk acceptance is demonstrated, believing that the likelihood of a high
reward outweighs the risk.

Case Study

Introduction

Janata Bank Limited, one of the state-owned commercial banks in Bangladesh, has been
licensed 20,000 million of provisional capital. Education in the modern world means
understanding the real world and Apply knowledge to both society and society. From education

Theoretical knowledge comes from courses that fall in the middle of topics. Practical knowledge
has no alternative. Narcissus therefore gives a chance. An international university called to gain
three months of practical experience

"Internship program". Because practical advice is an integral part of the BBA requirement,

He worked as an intern at Janata Bank Limited, a subsidiary of Polly Biddotaion’s Khilkhat

subsidiary.

A three-month internship program at a bank like Janata was a great opportunity for me

He has gained practical knowledge and experience in various banking fields. Discussions and
constantly we started working on a project called “risk research”.

Janata Bank Limited Management, Corporate Governance and Social Responsibility”

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Janata Bank plays a unifying and middle role in support fund and fund requests. Departments of
the company that perform the savings and investment functions. On the key role in the
economy operating on the principle of profitability and efficiency, the bank must comply

Ethical principles and ethical organization of the banking profession the banking system plays
an important role in the economy and the performance of the bank is also needed in practice.

Organizational Profile of Janata Bank LTD

Janata Bank Limited, one of the state commercial banks of Bangladesh, Taka 20 billion of share
capital, paid-up capital Taka 11 billion of reserve 17,234 million. As of December 31, 2012, the
bank had total assets of TL 508,567 million.

In the immediate aftermath of the state of emergency in Bangladesh in 1971, the former United
Bank Limited Renowned Janata Bank. The bank was established on November 15, 2007 and

Renamed Janata Bank Limited. Janata Bank Limited operates 892 subsidiaries 4 Branches
abroad in the United Arab Emirates. Related to 1,202 foreign correspondents in the world. The
bank has more than fifteen thousand employees. Mission the bank must participate in the
socio-economic development of the nation through action.

A commercially strong banking organization provides loans effectively to eligible borrowers.

Simultaneously and at competitive prices, keeping depositors' funds; Y Satisfactory reduction of
owner's capital. The council is made up of thirteen people led by a president. The director is
made up of representatives from the public and private sectors. The bank is managed by the
general manager and the general manager a well-known banker.
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Organization Hierarchy of JBL

Mission of JBL

We aspire to be the most admired financial institution in the country, recognized as a dynamic,
innovative and client focused company that offers an array of product and services in the
search for excellent and to create an impressive economic value.
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Vision of JBL

To be the bank of 1st choice by creating exceptional value for our clients, investors and
employees

Values of JBL

1. Customer focus

2. Integrity

3. Teamwork

4. Respect for the Individual

5. Quality

6. Responsible citizenship

SWOT Analysis:
The following SWOT analysis capture the key strength and weaknesses with the company and
describe the opportunities and threats.

Strengths
1. JB has strong non-interest earning Base
2. Wide Branch Network among the 3rd generation Bank
3. Low infection in loan exposure
4. Wide product lengths:

Weaknesses:
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1. It has high cost of fund

2. It has highly dependency on term of deposit
3. It has excessive dependency on term of deposit
4. Inadequate delegation of power
5. Inadequate IT infrastructure

Opportunities:
1. It has credit card business
2. It has scope of market penetration through diversified product and wide banking
Network
3. It has regulatory environment favoring private sector development

Threats:
1. It has increasing competition for the market for public deposit.
2. Market share for lowering interest rate
3. Deteriorated export, import and guarantee business due to indecent competition as well as
Economic slump.

Recommendation
1. The unit should develop appropriate tools to help staff understand and understand the
situation.
Implement integrated risk management at organizational and operational level.
2. The Ministry should change existing reporting processes to include analysis.
How each current activity mitigates the underlying risks identified in corporate risk?
Profile.
3. Company communication and interaction with investors and other interesting parts
4. The Communication aims to ensure that all stakeholders receive equal rights on a regular
basis.
5. The Committee's opinion on the dialogue was probably justified to attend or announce
investor meetings; periodic reports of the Board of Directors.
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6. Corporate social responsibility or CSR in the business world He advocates a broader ethical
and social role for companies. Board structure companies in order to increase the profits of
their shareholders and CSR, its wider community and natural environment. People who develop
CSR guidelines create them in a way that develops challenge large companies and turn them
into productive business citizens contributes positively to society.

Conclusions

Banks have their own unique strategy, which leads to their objectives. Some wishes to grow faster and
achieve some long range growth. On the other hand some banks want to lead a quiet life minimizing risk
and convey an image of a sound bank. JBL is pretty new in its operation. Even though the financial
analysis on the banks performance seems the banks doing very well in the banking industry of
Bangladesh, and has prosperous future. JBL has established goodwill through innovative products and
services. Technology development has opened up a new dimension in the development of creative
products, efficient services and customer satisfaction. The bank must cope with this technological
advancement its present status. Though there are some drawbacks in some sectors of Janata Bank Ltd.,
still modern banking technology and employee and employer sincerity may lead to increased profit. The
progress of JBL in Bangladesh is depended on the environment, structure, special features offered by the
bank, rapid increase of deposit, investment, profit, dividend on behalf of short time, the public respond
over the bank.

Reference
Cole, B. (n.d.). risk management. Retrieved from TechTarget: https://searchcompliance.techtarget.com

Risk Management. (n.d.). Retrieved from CFI: https://corporatefinanceinstitute.com

http://www.janatabank-bd.com/

http://www.bangladesh-bank.org/
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The End