59 assessment of the effectiveness of the organization's risk management system. Criteria for assessing the effectiveness of the risk management system

In the system of sequential risk management functions, the most important role is played by grade efficiency of the risk management system.

Management efficiency represents the ratio of the total result of management activities to the cost of resources spent on its achievement.

The effectiveness of management activities is significantly influenced by a number of factors, the entirety of which can be conditionally divided into two main groups.

The first group includes factors that have a direct impact on the efficiency of administration, such as:

¦ the management potential of the organization, i.e. the totality of all resources available to the management system;

¦ the total costs of maintaining and operating the management system are determined by the nature, method of organization, technology and volume of work to implement management functions;

¦ control effect, i.e. the totality of all economic, social and other benefits that an organization receives in the process of carrying out management activities.

All of the above indicators can be defined as the main factors of management effectiveness.

The second group consists of secondary factors that have an indirect impact on the effectiveness of the management system. These factors include:

¦ qualifications of managers and performers;

¦ capital-labor ratio of the management system, i.e. the degree and quality of provision of administrative workers with auxiliary means (computers, office equipment, etc.);

¦ socio-psychological conditions in the work collective;

¦ organizational culture.

As part of the management efficiency criteria, general and specific indicators can be distinguished. General indicators characterize the final results of the organization's activities, and private indicators characterize the efficiency of using individual types of resources.

To assess the effectiveness of management of commercial enterprises, it is most advisable to use such general indicators as profit and profitability.

The total amount of profit received by an enterprise for a certain period usually consists of profit from sales of products (works, services), profit from other sales and profit from non-sales operations.

Profit from the sale of products, services or work performed is determined as the difference between the total amount of revenue from the sale of products (excluding value added tax and excise taxes) and the amount of production and sales costs included in the cost price.

Profit from other sales is defined as the difference between the amount received from the sale of property or other material assets of the enterprise and their residual value.

Profit from non-sales operations is calculated as the difference between income and expenses on operations not related to the sale of the enterprise's products or its property.

Income from non-operating operations includes:

¦ income from the enterprise’s financial investments in securities;

¦ income from rental property;

¦ balance of received and paid fines;

¦ positive exchange rate differences on foreign currency accounts and transactions in foreign currency;

¦ receipt of amounts to repay accounts receivable written off at a loss in previous years;

¦ profit of previous years, identified and received in the reporting year;

¦ amounts received from buyers for recalculations for products sold last year;

¦ interest received on the company’s accounts with credit institutions.

Non-operating expenses of an enterprise are formed as a result of the summation of:

¦ shortages and losses from loss of material assets and funds;

¦ negative exchange rate balances on foreign currency accounts and transactions in foreign currency;

¦ losses of previous years identified in the reporting year;

¦ writing off accounts receivable;

¦ uncompensated losses from natural disasters;

¦ costs for canceled orders;

¦ legal costs;

¦ costs of maintaining mothballed production facilities.

The balance sheet profit received by the enterprise is distributed between the state and the enterprise. After the income tax is paid into the appropriate budgets, the enterprise has funds at its disposal, which form its net profit. The net profit of the enterprise is directed to the accumulation fund, consumption fund and reserve fund.

Based on the order of profit formation, its factor analysis is carried out. The main goal of factor analysis is to assess the dynamics of balance sheet and net profit indicators, to identify the degree of influence on the financial results of a number of factors, which include:

¦ increase or decrease in production costs;

¦ increase or decrease in sales volumes;

¦ improving the quality and expanding the range of products;

¦ identifying reserves for increasing profits.

The most important indicator characterizing the management efficiency of a commercial enterprise is its profitability. Profitability is defined as the profit received from each ruble of funds spent.

The system of profitability indicators is based on the composition of the enterprise’s property and the business operations carried out by the enterprise. From this point of view, there are:

1) profitability of the enterprise's property - is defined as the ratio of net profit to the average value of the enterprise's assets;

2) profitability of non-current assets - is the ratio of net profit to the average value of non-current assets;

3) profitability of current assets - calculated as the ratio of net profit to the average value of current assets;

4) return on investment - the ratio of profit from investment projects to long-term costs of their implementation;

5) return on equity - the ratio of net profit to the amount of equity capital;

6) profitability of borrowed funds - defined as the ratio of fees for using loans to the total amount of long-term and short-term loans;

7) profitability of products sold - the ratio of net profit to revenue from sales of products.

Using the profitability indicators listed above, you can evaluate not only the overall efficiency of the organization’s management system, but also the effectiveness of using individual types of resources (assets) of the enterprise.

It is much more difficult to evaluate the effectiveness of the management of non-profit organizations. From the point of view of assessing the effectiveness of their functioning, all non-profit organizations can be divided into two main groups:

1) organizations whose performance results can be assessed using economic indicators;

2) organizations whose performance results are expressed in non-economic values, such as reducing the level of morbidity or crime, increasing the level of education, improving the environmental situation, etc.

To assess the effectiveness of organizations included in the first group, the same methods can be used as for assessing the effectiveness of commercial organizations.

It is much more difficult to assess the effectiveness of the functioning of organizations that are part of the second group. Currently, there are almost no methods for converting non-economic indicators into economic indicators.

Even in those industries where such techniques are available, they do not find wide practical application. For example, a methodology for calculating the economic damage caused to nature due to pollution of water sources by industrial discharges has long been developed. At the same time, when assessing the effectiveness of projects for the construction of new treatment facilities, the damage prevented is not taken into account. Thus, it turns out that most environmental programs are unprofitable from an economic point of view.

Consequently, the main direction in the development of methods for assessing the economic efficiency of non-profit organizations and programs should be the development of methods for converting non-economic indicators into economic ones. This will make it possible to more objectively and fully take into account the influence of various factors on the performance of a particular organization or project.

¦ From the point of view of the process approach, risk management can be considered as a continuous series of interrelated management functions.

¦ The basis of the process approach is management technology, i.e. a set of techniques and methods for implementing the management process.

¦ The main elements of management technology are the subject of labor (i.e. information that ensures the adoption of management decisions); product of labor (managerial decisions); means of labor (knowledge and experience of the manager); workforce (intellectual and physical energy of the leader).

¦ The main element of the management process is the management function.

¦ In its most general form, the management function is a separate, homogeneous type of activity aimed at achieving the goals of the organization.

¦ Most researchers divide management functions into general and special. At the same time, general management functions are understood as functions that form the management cycle and reflect the specifics of managerial work, regardless of the nature and specifics of the organization’s activities.

¦ In addition to general and special management functions, mixed functions can also be distinguished, such as planning the release of finished products, monitoring the progress of production, organizing product sales, etc.

¦ Depending on the duration of action, all control functions can be divided into two groups. The first group includes sequential functions that are carried out discretely (i.e., repeated at certain intervals), successively replacing each other. The second group consists of continuous functions, the implementation of which is carried out continuously throughout the entire period of enterprise management.

The practical threat of various risks for the company is realized through possible losses or damages. It is the threat to the company’s tangible or intangible assets that forces management to turn to risk management methods to reduce the company’s losses due to their occurrence. However, the list of factors that determine the objective need to implement risk management systems in companies is far from exhausted. These include the following most important prerequisites: increasing volatility of financial markets, periodic crises and shocks (including natural and man-made disasters, the threat of terrorist attacks), pressure from regulatory authorities, the need to improve management mechanisms.

Today, perhaps, the most effective auxiliary tool for any business to increase financial stability and reliability is the comprehensive implementation of developed risk management measures and procedures. In recent years, the problem of risk management has received increasing attention. And not only in theoretical terms, but also in practice, the heads of many enterprises and organizations (not only financial, but also manufacturing and service sectors) began directly to implement risk management systems in their own businesses. After all, an integrated approach to the problem of risk management allows you to simultaneously solve or create favorable conditions for solving the problems of most aspects of the company’s activities. Such tasks include: planning expected profits and losses, reducing unforeseen expenses, optimizing tax payments, reducing profit volatility, increasing credit or investment ratings, adequacy of risk premium tariffs, increasing financial stability, etc. Solving at least some of the The listed tasks will allow the company to quickly receive a significant return on investment in implementing a risk management system and, ultimately, serves to achieve strategic goals - maximizing profits and increasing the market value of the company. However, a logical question increasingly arises: how effective is the current risk management system?

This material discusses the fundamental theoretical basis for constructing systems for assessing the effectiveness of risk management. The proposed system can be used both to evaluate the already achieved results of the work of risk managers, and during the risk management process itself at the stage of choosing alternative methods of influencing or countering risk.

In the process of making a decision on the implementation of certain risk management measures, it is necessary, first of all, to take into account the fulfillment of the conditions of the following inequality:

where L is the amount of expected loss in the event of a risk;
C is the total cost of risk management activities.

That is, the implementation of certain risk management measures is justified only if the amount of the expected loss exceeds the cost of managing these risks.

In turn, the amount of expected loss is calculated using the formula:

where f(P, E) is a function of the probabilistic value of loss due to the occurrence of risk;
P - probability of risk occurrence;
E - the value of the maximum loss in the event of a risk.

When calculating the total cost of risk management activities, it is necessary not only to sum up the cost of each specific resource in monetary and other forms involved in risk management, but also to index it to the cost of alternative placement of each resource:

where i is the total number of activities planned for implementation during risk management;
Сi is the monetary value of the i-th risk management measure;
Ai is the cost of alternative placement of the i-th resource.

where L" is the actual (or predicted) amount of loss after the implementation of risk management measures. To calculate the economic efficiency of risk management, the expected value of loss reduction is correlated with the total cost of risk management measures. In other words, the indicator of economic efficiency of risk management Y shows the total expected value loss reduction taking into account the costs of risk management measures:

Based on this expression, we can conclude that risk management is inappropriate and ineffective if the Y value turns out to be negative. This will mean that the cost of implementing the selected measures will not be compensated by the amount of loss reduction. In this case, it is more advisable to abandon risk management. The only exception may be the pursuit of certain image goals, but since the effect of advertising and PR campaigns can also be expressed in cost form, the given formula is quite universal for all commercial entities.

At the stage of choosing a method, system of measures or risk management strategy, the function fmax(Y1,Y2,…,Yn) is used. In other words, for practical implementation, measures with the maximum indicator of economic efficiency are selected. However, let us make a reservation, since risk is a value, first of all, probabilistic, some deviations of actual indicators from calculated ones are also possible. The magnitude of such deviation largely depends on the accuracy of the calculations performed, the quality and reliability of the source data. To no less an extent, the result will also depend on the timeliness and completeness of the analysis carried out to identify and assess risks.

The practical use of the proposed performance assessment system seems most appropriate at the following stages of risk management (see figure):

selection of a management method - at this stage, the predicted results of all proposed risk management options are calculated. The option with the greatest economic effect is accepted for implementation;

analysis of results - in order to determine the actual effectiveness of the risk management measures taken, calculations are made based on actual indicators. The value of using an assessment of the effectiveness of risk management at this stage lies, firstly, in obtaining reliable objective management information, and secondly, taking into account the analysis of actual results, adjustments are made to practical guidelines, methods and instructions for risk management to optimize work in the future, in -third, the results can be used in the system of motivation and remuneration for risk managers.

Drawing. Integration of a system for assessing the effectiveness of risk management into the risk management process

The proposed performance assessment system is intended to complement the existing risk management system with a unique element of control, an indicator of errors made both in current work and in the overall risk management strategy. When developing your own risk management strategy and implementing specific risk management methods, it would be useful for a manager at any level to have a predictable result of the practical implementation of certain decisions.

Leadership, Management, Company Management

Topic 5. Performance assessment (4 hours).

Methods for assessing effectiveness by risks.
Criteria for assessing the effectiveness of risk management methods.
Risk management measures and their impact on enterprise value.
An algorithm for comparative assessment of the effectiveness of insurance and self-insurance using the Houston method.
Relative assessment of the effectiveness of risk management based on an analysis of the financial state of the risk.
Factors influencing the effectiveness of risk management.

The use of any of the risk management methods leads to a redistribution of current and expected financial flows within an enterprise or financial project. For example, when insuring, part of one’s own funds is diverted to pay insurance premiums, resulting in underinvestment in the project and loss of profit. On the other hand, there is an expected future influx of funds in the form of compensation for losses upon the occurrence of an insured event.

Redistribution of financial flows leads to a change in the value of the net assets of an enterprise or project, calculated taking into account expected cash receipts. Thus, As a criterion for the economic efficiency of applying risk management methods, you can use an assessment of their impact on the change in the value of the enterprise, calculated at the beginning and end of the financial period. For an investment project, the criterion is the impact of risk management methods on changes in the net present value of the project.

Let us give two examples from the field of financial risks.

^ Example 1. Investment project

The risks of an investment project are taken into account as part of the discount rate for equity capital, which is used to calculate the net present value of the project (NPV). Insurance reduces risks, thereby reducing the discount rate and increasing NPV. On the other hand, insurance implies additional costs for paying the insurance premium during the project implementation period, which ultimately lead to a decrease in the project’s profit.

The resulting influence of these two opposing factors leads to either an increase or decrease in NPV, thereby allowing us to judge the effectiveness of insurance.

However, investors may demand that the project's risks be reduced to the required limits. In this case, the starting point for assessing the effectiveness of risk management methods will be a comparison of the costs of their implementation while ensuring the same required level of risk.

^ Example 2: Investing in securities

When investing in exchange-traded assets, an investor, based on past data on exchange rate fluctuations, can estimate the likelihood of him receiving the required level of income. After this, he can determine his future economic benefit in the form of a mathematical expectation, i.e. as the product of probability and expected profit.

After this, the investor can use hedging methods to reduce risk or insure future profits in the usual way. In the first case, the investor will record a smaller profit, but with a greater probability, and will also incur the costs of the hedging operation. In the second case, he will record the desired profit, but will incur significant costs to pay the insurance premium.

In practical terms, to comparatively assess the effectiveness of various risk management methods, you can use the method of pairwise comparison and then build a hierarchy of results based on the application of selected criteria.

Analysis of the economic efficiency of insurance and self-insurance

Method of analysis

Let's consider a method for comparatively assessing the effectiveness of the two most commonly used financial risk management mechanisms - insurance and self-insurance, which is called Haustop method. Its essence lies in assessing the impact of various risk management methods on "enterprise value" (value of organization).

The value of an enterprise can be determined through the value of its free assets. Free (or net) assets of an enterprise is the difference between the value of all its assets and liabilities. Decisions on insurance or self-insurance of risk change the value of the enterprise, since the costs of these activities reduce the funds or assets that the organization could allocate to investments and make a profit. The model under consideration also takes into account the occurrence of losses in the future from the risks under consideration.

It is also assumed that both financial mechanisms cover the risk in question equally, i.e. provide the same level of compensation for future losses.

At insurance The company pays an insurance premium at the beginning of the financial period and guarantees itself compensation for losses in the future. The value of the enterprise at the end of the financial period when providing insurance is expressed by the following formula:

S 1 = S - P+ r(S- P),

Where Si - the value of the enterprise at the end of the financial period with insurance;

S - the value of the enterprise at the beginning of the financial period;

^P- the amount of the insurance premium;

r - average return on working assets. The amount of losses does not affect the value of the enterprise, since they are expected to be fully compensated by the insurance compensation paid.

At self-insurance the enterprise fully retains its own risk and forms a special reserve fund - the risk fund. The impact on the amount of free assets of a fully preserved risk can be assessed by the following formula:
S R = S- L + r(S- L- F) + iF, Where S R - the value of the enterprise at the end of the financial period with fully preserved risk;

L - expected losses from the risks under consideration; F - the amount of the risk reserve fund;

i - average return on risk fund assets.

With self-insurance, an enterprise suffers two types of losses - direct and indirect. Direct losses are expressed as expected annual losses)/-. In addition to the expected losses L, certain funds must be directed to the reserve fund!F to ensure compensation for expected losses, and with some margin. It is assumed that assets are kept in the reserve fund in a more liquid form than assets invested in production, so they generate less income. Comparison of values Si And Sr allows us to judge the comparative economic efficiency of insurance and self-insurance.

It should be noted that for greater accuracy of calculations, it is necessary to take into account discounting of cash flows due to the distribution of losses over time, delays in the payment of insurance compensation associated with the registration and presentation of claims, and the presence of inflation.

Performance Analysis Results

Let us set ourselves the goal of determining from the Houston model the condition for the effectiveness of using insurance at an enterprise to protect against risks. Mathematically, this condition can be written as follows:

S,> Sr.

This suggests that the value of the enterprise at the end of the financial period with insurance should be higher.

Two key parameters on which compliance or non-compliance with this inequality depends are the average expected losses L cp and the size of the risk reserve fund F. Let us consider the main patterns characteristic of these quantities.

For the purpose of correct calculation, it is necessary to use the value of expected losses 1 Wed , reduced to the beginning of the financial period. Real losses are distributed over the observation period, and those that occurred earlier in time have a stronger influence on the change in the value of the enterprise. In this case, to adjust the value L cp standard procedures for discounting financial flows can be used.

Required risk fund size F, which must be formed by the enterprise during self-insurance, can be estimated based on the following considerations. Risk fund funds, as already mentioned, are also used by the enterprise to make a profit, since they are “temporarily free” until they are needed to compensate for losses. If the efficiency of using the risk fund were equal to the efficiency of using production assets (i.e. r = i), then the condition for the efficiency of insurance, given by inequality (10.4), would never be met, since the insurance premium R always greater than the average expected loss: 1 Wed :P >L cp .

This circumstance follows from the structure of the insurance tariff, since in addition to the amount of average losses, it includes the costs of doing business and the profit of the insurance company (as well as other components). Insurance Always would be less cost-effective than self-insurance. However, as a rule, r > i/, since assets in the risk fund must be stored in a more liquid, and therefore less profitable form. Therefore, there is a range of values of those variables in which insurance will be a more cost-effective mechanism, which will be reflected in an increase in the value of the enterprise.

The size of the risk fund is determined in accordance with the subjective perception of risk by the policyholder. To assess this factor, the model uses the previously mentioned concept of the maximum acceptable level of loss L Max. It would be logical to set the size of the risk fund equal to the maximum acceptable loss: F= L Max ,

From here you can find the final version of the conditions for the economic efficiency of using insurance to cover the risks of an enterprise, expressed as follows:

It is important to note that inequality determines the maximum acceptable amount of insurance premium for the policyholder based on the internal properties of the insured risks, which are described in the model by parameters L Max And L cp . These parameters can be determined based on statistical data. In their absence as approximate values L Max And L cp You can use available data for other enterprises of a similar profile or take the values of the maximum and average annual loss from the risks under consideration for a sufficiently long period of time (in amounts normalized to the level of the accounting year), adjusted by a coefficient determined by experts.

Based on the analysis of inequality, the following conclusions can be drawn about the influence of various conditions on the efficiency of using insurance in an enterprise.

1. The larger the size of the risk fund formed by the enterprise, the less effective self-insurance turns out to be.

2. The effectiveness of self-insurance falls with an increase in the profitability of the enterprise’s activities and grows with an increase in the profitability of liquid, highly reliable investments. This provision has an obvious economic meaning: with an increase in the profitability of its activities, it is more profitable for an enterprise to invest funds in production than to divert them to create a risk fund. On the other hand, an increase in the yield of securities increases the attractiveness of investing in them temporarily free funds from the risk fund.

Topic 6. Investment risk management (5 hours).

Patterns of investment project management:
- pre-investment stage of the project,
- criteria for evaluating an investment project,
- assessment of the economic efficiency of the project,
- application of discounting methods to evaluate the economic assessment of project effectiveness,
- application of discounting methods to assess project risk.
Methods for assessing investment risks:

discount rate estimation method,
capital asset valuation model,
method of cumulative construction of the discount rate,
taking into account country risks when assessing investment projects.

Assessment of the economic efficiency of insurance of investment projects:

assessment methodology,
example of assessment.

Investment risk insurance practice:

political risk insurance,
insurance of investments against financial and commercial risks.

The essence of investing is investing own or borrowed capital in certain types of assets, which should ensure future profit. Investments can be long-term or short-term. In any case, to make a decision on investing capital, it is necessary to have information that, to one degree or another, confirms three fundamental theses (conditions):

A full return on investment must be ensured;

The expected profit must be large enough to make the chosen type of investment attractive compared to other opportunities;

The expected profit should compensate for the risk arising due to the uncertainty of the final result.

Rice. Structure of investment risks

The last condition establishes a direct connection between risk and expected return on investment. The higher the risk, the higher the expected return should be. If there is an alternative choice between investing in two types of assets with the same return, then, obviously, the option with a lower risk of loss of profit is preferable. Thus, The problem of managing an investment project is to develop a capital investment program that provides the required profitability with a minimum level of risk.

The entire project development cycle can be roughly divided into three stages. ^ At the first (pre-investment) stage a feasibility study of the project is developed, marketing research is carried out, negotiations are conducted with potential investors and project participants, the project is legally formalized and the issue of shares or other securities is carried out.

^ At the second stage the actual investment in selected assets occurs: the purchase of shares or the construction of a new production complex, the purchase of equipment, etc.

From the moment of commissioning of production assets or upon completion of the formation of the investment portfolio, third (operational) stage project development. It is characterized by the beginning of the return of invested funds and the receipt of income. The selected duration of the operational phase will have a significant impact on the overall characteristics of the project. The longer the time period under consideration, the greater the total income will be.

^ Pre-investment stage of the project

As already noted, at the stage of pre-investment preparation of the project, a number of studies are carried out to assess its future commercial attractiveness. Their results, in accordance with the recommendations of international organizations, should include the following sections:

Project goals, economic and legal environment (taxes, government support, etc.);

Marketing research (potential consumers, market volume, level of competition, product range, pricing policy, advertising);

Location;

Design and engineering part (technology, scope of construction, documentation, etc.);

Organization of the enterprise (structure, administrative apparatus) and overhead costs;

estimation of production costs;
personnel policy;
time frame for project implementation;
assessment of the commercial viability and effectiveness of the project;
risk assessment.

The discounting method is based on reducing all future income from the project (including dividends and residual value of assets) to the value of “today”. The discounting operation determines the expected “immediate” profit that occurs immediately after the investment decision is made. Its absolute value will obviously be less than the nominal amount of all future payments possible during the implementation of the project.

A detailed description of the use of discounting methods can be found either in UNIDO publications or in the previously mentioned “Guidelines for assessing the effectiveness of investment projects and their selection for financing.” In this section, it is enough to limit ourselves to a description of the main provisions of the methodology.

The key parameter for applying the method under consideration is the value discount rates (discount rate), which can be found in various ways. The main factors determining its value are the so-called risk-free rate And investment risk premium.

For each planning interval (year, quarter), the so-called discount factors:

Where DFi

D.R. - discount rate corresponding to the accepted planning interval;

I is the serial number of the planning interval, provided that the beginning of the project is taken as zero.

Using the obtained values of discount factors, it is possible to determine net present value (NPV, net present value) project according to the following formula:

NPV = NCV 0 + NCV i ∙ DF 1 + … + NCV n ∙ DF n ,

Where P- total number of planning intervals;

NPV- net present value;

NCVi - net cash flow at the end of the i-th planning interval (can be either positive or negative);

NCV n - net cash flow at the end of the last planning interval;

DF i - discount factor for the i-th planning interval;

DF n - discount factor for the last planning interval.

If the net present value of the project calculated using the above formula is equal to zero, this means that the investor will ultimately recoup his costs, but will not make a profit. The larger the value NPV the more attractive the project is for an investor. If the value NPV negative, then the project is unprofitable and its implementation should be abandoned.

^ Taking into account uncertainty and assessing project risk. During the implementation of an investment project, unforeseen situations may arise that will significantly change the planned profit and cost indicators. This can be the result of both internal factors (management, design errors) and external factors (political situation, changes in market conditions). An investment project, as already noted, is subject to various types of financial, commercial, country and other risks.

Investment risk assessment is less amenable to formalization and quantitative expression than other stages of project development. Therefore, in this area there is no

Generally accepted standards.

Methods for taking into account the uncertainty of the final results of the implementation of an investment project can be divided into three:

Probabilistic methods;

Determination of critical points;

Sensitivity analysis.

^ Probabilistic methods are based on knowledge of the quantitative characteristics of risks accompanying the implementation of similar projects, and taking into account the specifics of the industry, political and economic situation. Within the framework of probabilistic methods, it is possible to analyze and evaluate certain types of investment risks. At the same time, two other methods—determining critical points and sensitivity analysis—give only a general idea of the project’s stability to changes in its parameters.

Determining critical points usually comes down to calculating the so-called “break-even point”.

Sensitivity analysis consists of assessing the impact of changes in the initial parameters of the project on its final characteristics, which are usually used as the internal rate of return or NPV. The analysis technique consists of changing selected parameters within certain limits, provided that the remaining parameters remain unchanged. The larger the range of parameter variations in which the NPV or rate of return remains a positive value, the more sustainable the project

Topic 7: Risks in industrial entrepreneurship (5 hours)

Risks of lack of demand for manufactured products
Risks of non-fulfillment of business contracts.
Risks of increased competition.
Risks of unexpected costs and decreased income.
Risks of loss of property of a business organization.

Manufacturing entrepreneurship is an economically active activity of subjects of a market economy, the subject of which is the production of goods, performance of work and provision of services that are subject to subsequent sale to consumers. In this case, the production function is decisive. From the point of view of society as a whole, production entrepreneurship has priority, since social wealth depends on the state of affairs in the sphere of material, scientific, technical and service production.

Entrepreneurial activity in the sphere of production of goods can be of a primary or auxiliary nature. The main ones include those types of entrepreneurial activity, the result of which is the production of goods , ready for consumption. Ancillary activities include types of entrepreneurial activity, the purpose of which is to develop and transfer to direct producers methods, methods, techniques, the use of which in the production process affects the improvement of the qualitative and quantitative characteristics of the goods produced. This also includes entrepreneurial firms, the result of whose activities is the development and transfer to direct producers of new equipment, technology or scientific and technical developments, the provision of production services (construction work, transport services, etc.).

Currently in Russia, manufacturing entrepreneurship is the most risky type of activity. This is due to the fact that the production process includes several stages, at each of which an entrepreneur may suffer losses as a result of erroneous actions [or negative influences of the external environment.

When developing a program for carrying out production activities, an entrepreneur first of all selects the subject of production activity, in other words, outlines exactly what goods, works, services he intends to produce, having studied the needs of the market. This stage is the main one, since the success of production activities depends on the correct choice of entrepreneurial idea. Nowadays, unique opportunities are opening up for entrepreneurs in almost any field of activity, but their choice usually comes down to two areas:

♦ use of already accumulated experience and professional knowledge;

♦ self-realization in a new field of activity. Which of these directions should you prefer? There is no universal advice here and there cannot be, since the choice is influenced by various factors: the competence of the entrepreneur, the nature of the professional activity, the goals that the entrepreneur sets for himself when he decides to engage in production activities, the availability of initial capital. The advantage of the first path is that, having decided to start a business in a familiar field of activity, the entrepreneur will be able to use the experience, knowledge, and qualifications he already has, that is, the most important resources for success in any field of activity.

If an entrepreneur does not have the necessary specialty or qualifications that allow him to quickly find his market niche (for example, he is a manager of a large manufacturing company), in this case, when choosing his line of activity, the entrepreneur can use the following directions;

♦ “copying” the activities of the enterprise where he works, which is possible if we are talking about relatively simple products;

♦ production of products not yet mastered by a given enterprise, or improvement of manufactured products;

♦ production of individual components or spare parts for products manufactured by the enterprise;

♦ development of a new product or type of service.

To evaluate the viability of their ideas, entrepreneurs can use the “ideal business” model developed by Richard G. Buskirk, professor of marketing and director of the entrepreneurial program at the University of South Carolina. This model helps entrepreneurs evaluate the merits of the proposed type of activity, taking into account the possible risk.

Criteria for checking the prospects of an entrepreneur's undertakings

Criterion	Risk level
Criterion	1	2	3	4	5	6	7	8	9	10
Capital
Sales markets
Trading system
Socially perceived need for a product
Supply
Government regulation
Wage labor
Gross income
Transaction frequency
Element of novelty
Loans
Obsolescence of goods
Dependence on partners
Ethical aspect

This matrix allows you to analyze any planned undertaking and clearly see what the risk is. The numbers 1 - 10 at the top of the matrix indicate the level of risk: number 1 means no risk in a given position, and 10 means very high risk.

However, the high level of risk for the idea being considered by the entrepreneur does not mean that this type of activity is unacceptable. In this case, the entrepreneur needs to develop a program to reduce and control the risk.

A low level of risk when assessing the prospects of an idea does not mean that a low level of risk 1 will be achieved in the process of production activities. An entrepreneur must take into account the likelihood of one or another type of risk occurring at all stages of the production process, from the purchase of raw materials to the sale of finished products. In general, risk in industrial entrepreneurship includes the following main types of risk:

♦ risks of lack of demand for manufactured products;

♦ risks of non-fulfillment of business agreements (contracts);

♦ risks of increased competition;

♦ risks of changes in market conditions;

♦ risks of unexpected costs and decreased income;

♦ risks of loss of property of a business organization;

♦ force majeure risks.

At the same time, within the framework of individual types of risk, it is necessary to identify certain subtypes of risk, that is, to give a more complete classification of them in industrial entrepreneurship.

The risk of a product not being in demand arises as a result of the consumer’s refusal to purchase products produced by a business firm. Risk is characterized by the amount of possible economic and moral damage suffered by the company for this reason. There can be many reasons for the risk of lack of demand for manufactured products; they can be interconnected and interdependent. From the point of view of the conditions of occurrence, these causes can be divided into internal and external.

The internal causes of risk depend on the activities of the business organization itself, its divisions and individual employees. TO these include the following:

♦ qualifications of production personnel (workers);

♦ organization of the production process;

♦ organizing the supply of material resources to the enterprise;

♦ organization of sales of finished products;

♦ marketing market research.

The level of risk of lack of demand for products depends on the level of qualifications of the personnel of the business organization, since it is the mistakes of employees that can lead to the occurrence of this risk. For example, an incorrect forecast of demand for products produced by an enterprise by specialists will lead to a disproportion [between the volume of produced and sold products, i.e., some of the products will not be sold and will exceed demand. As a result of such an error, the business firm will suffer losses. In addition, incorrectly selected sales channels for manufactured products, directions for their sales, time and place of sales of products by marketing service employees can lead to a discrepancy between the actual volume of sales and the forecast volume of demand, which will also cause losses in profit.

Inconsistency in the level of qualifications of workers and other categories of workers in the process of the applied production technology, low technological discipline, weak control over the quality of manufacturing of parts, assemblies, and assembly can lead to low quality of products, and a decrease in the quality of manufactured products can affect a drop in demand on it, which will lead to a decrease in the price of products, and consequently, a decrease in revenue and profit, as well as a decline in the reputation of the business firm, a decrease in its competitiveness, as a result of which the company suffers both material and moral damage.

The organization of the production process can affect the level of risk of lack of demand for products, since violations in the technological cycle again lead to a decrease in the quality of manufactured products, to obvious or hidden defects. The discovery of hidden defects by consumers causes not only economic, but also moral harm to the business organization. The consumer's return of defective products is equivalent to unclaimed products, and the consumer must also compensate for the losses caused.

In the system of sequential risk management functions, the most important role is played by assessment of the effectiveness of the risk management system.

Management efficiency represents the ratio of the total result of management activities to the cost of resources spent on its achievement.

The effectiveness of management activities is significantly influenced by a number of factors, the entirety of which can be conditionally divided into two main groups.

The first group includes factors that have a direct impact on the efficiency of administration, such as:

♦ management potential of the organization, i.e. the totality of all resources available to the management system;

♦ total costs for the maintenance and operation of the management system are determined by the nature, method of organization, technology and volume of work to implement management functions;

♦ control effect, i.e. the totality of all economic, social and other benefits that an organization receives in the process of carrying out management activities.

All of the above indicators can be defined as the main factors of management effectiveness.

The second group consists of secondary factors that have an indirect impact on the effectiveness of the management system. These factors include:

♦ qualifications of managers and performers;

♦ capital-labor ratio of the management system, i.e. the degree and quality of provision of administrative workers with auxiliary means (computers, office equipment, etc.);

♦ socio-psychological conditions in the work team;

♦ organizational culture.

As part of the management efficiency criteria, general and specific indicators can be distinguished. General indicators characterize the final results of the organization's activities, and specific indicators characterize the efficiency of using individual types of resources.

To assess the effectiveness of management of commercial enterprises, it is most advisable to use such general indicators as profit and profitability.

Profit from other sales is defined as the difference between the amount received from the sale of property or other material assets of the enterprise and their residual value.

Profit from non-sales operations is calculated as the difference between income and expenses on operations not related to the sale of the enterprise's products or its property.

Income from non-operating operations includes:

♦ income from the enterprise’s financial investments in securities;

♦ income from rental property;

♦ balance of received and paid fines;

♦ positive exchange rate differences on foreign currency accounts and transactions in foreign currency;

♦ receipt of amounts to repay accounts receivable written off at a loss in previous years;

♦ profit of previous years, identified and received in the reporting year;

♦ amounts received from buyers for recalculations for products sold last year;

♦ interest received on the company’s accounts with credit institutions.

Non-operating expenses of an enterprise are formed as a result of the summation of:

♦ shortages and losses from loss of material assets and funds;

♦ negative exchange rate balances on foreign currency accounts and transactions in foreign currency;

♦ losses of previous years identified in the reporting year;

♦ writing off accounts receivable;

♦ uncompensated losses from natural disasters;

♦ costs for canceled orders;

♦ legal costs;

♦ costs of maintaining mothballed production facilities.

♦ increase or decrease in production costs;

♦ growth or decline in sales volumes;

♦ improving the quality and expanding the range of products;

♦ identifying reserves for increasing profits.

The most important indicator characterizing the management efficiency of a commercial enterprise is its profitability. Profitability is defined as the profit received from each ruble of funds spent.

The system of profitability indicators is based on the composition of the enterprise’s property and the business operations carried out by the enterprise. From this point of view, there are:

1) profitability of the enterprise’s property - is defined as the ratio of net profit to the average value of the enterprise’s assets;

2) profitability of non-current assets - represents the ratio of net profit to the average value of non-current assets;

3) profitability of current assets - calculated as the ratio of net profit to the average value of current assets;

4) return on investment - the ratio of profit from investment projects to long-term costs of their implementation;

5) return on equity - the ratio of net profit to the amount of equity capital;

6) profitability of borrowed funds - is defined as the ratio of fees for using loans to the total amount of long-term and short-term loans;

7) profitability of products sold - the ratio of net profit to revenue from product sales.

1) organizations whose performance results can be assessed using economic indicators;

To assess the effectiveness of organizations included in the first group, the same methods can be used as for assessing the effectiveness of commercial organizations.

conclusions

♦ From the point of view of the process approach, risk management can be considered as a continuous series of interrelated management functions.

♦ The basis of the process approach is management technology, i.e. a set of techniques and methods for implementing the management process.

♦ The main elements of management technology are the subject of work (i.e. information that ensures management decisions); product of labor (managerial decisions); means of labor (knowledge and experience of the manager); workforce (intellectual and physical energy of the leader).

♦ The main element of the management process is the management function.

♦ In its most general form, the management function is a separate, homogeneous type of activity aimed at achieving the goals of the organization.

♦ Most researchers divide management functions into general and special. At the same time, general management functions are understood as functions that form the management cycle and reflect the specifics of managerial work, regardless of the nature and specifics of the organization’s activities.

♦ In addition to general and special management functions, mixed functions can also be distinguished, such as planning the release of finished products, monitoring the progress of production, organizing product sales, etc.

♦ Depending on the operating time, all control functions can be divided into two groups. The first group includes sequential functions that are carried out discretely (i.e., repeated at certain intervals), successively replacing each other. The second group consists of continuous functions, the implementation of which is carried out continuously throughout the entire period of enterprise management.

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Introduction

1 Theoretical foundations of risk assessment in the financial and economic activities of an enterprise

2 Analysis of the risk management system at Shell LLC

2.2 Features of risks at Shell LLC

2.3 Risk management at Shell LLC

3 Improving the efficiency of risk management at Shell LLC

3.1 Effectiveness of Shell LLC risk management

3.2 Control of individual risks in the activities of Shell LLC

4 Conclusion and conclusions

List of sources used

Applications

Introduction

There is risk in any financial activity. Researchers are unanimous on this. But until recently, in the financial activities of the country, risk as an economic category was not given due attention. This is apparently explained by the fact that for a long time this category was not considered as an object of theoretical research, but was related to practice. In recent decades, the situation has begun to change: this subject has become the object of close attention, and with the beginning of economic reforms, the object of our researchers. Nevertheless, the definition of risk, its place in financial activity, sources of risk in business, and methods of risk management are interpreted ambiguously by various authors.

Typically, risk is associated only with unfavorable economic consequences of business, leading to losses of resources and profits. And in this sense, eliminating risk is useful and necessary. By studying the sources and factors of risk, you can prevent it, that is, leave the risk zone. But this approach is only for businessmen engaged in routine business.

In fact, the entrepreneur takes risks, usually regardless of possible losses, because of the existence of a powerful incentive, such as increased profits, a kind of specific entrepreneurial approach.

Complete elimination of risk is not the main objective of enterprise risk management, since the costs required for this make it impossible to achieve an acceptable level of profitability of its financial and economic activities. The importance of risk assessment and risk management in business activities is increasing from year to year. Forms and methods of risk management are being improved.

Globalization of markets, clearly expressed global trends in the consolidation of enterprises through mergers and acquisitions, the creation of giant multinational holdings and conglomerates, the integration of Russia into the global economic space and increased competition in all segments of the world market require increased attention from Russian enterprises both to the efficiency of current activities and to improve the quality of market development forecasts, on the basis of which the enterprise development strategy is built. The risk management system is a key link in ensuring the quality of strategic planning of an enterprise and, as a result, ensuring its competitiveness in the market.

In the economic activities of an enterprise, there is always a danger of losses arising from the specifics of certain business operations. The possibility of such losses constitutes a risk. Financial risks are associated with the likelihood of any losses or not receiving something.

Business participants' awareness of their vulnerability to risk led to the development of risk management strategies, which led to stunning growth in those market segments that offered risk protection. All this determines the relevance of the chosen topic.

Risk management is of great importance. The work examines the types of risks, with their characteristics, provides a classification of risk factors, and considers the stages

The purpose of this work is to study the theoretical foundations of risk assessment, analyze risks in the activities of an enterprise and develop measures to reduce them.

Achieving the goal of the work identifies a number of the following tasks:

Study the essence and role of risks in the activities of the enterprise;

Investigate the issue of assessing the risks of an enterprise’s activities at the stage of making a management decision;

Consider the types of risks of the enterprise;

Give a general description of the enterprise;

Conduct an enterprise risk analysis;

Suggest methods for improving risk management systems at the enterprise.

The object of the study is Shell LLC

The subject of the study is the situations, conditions, factors causing the occurrence of risks in the enterprise.

The theoretical and methodological basis of the study was the scientific works of domestic and foreign authors devoted to the problems of risks in the enterprise and their strategic management.

Methods of system, statistical and logical analysis were used as research tools in the work.

The work consists of an introduction, three chapters, a conclusion, a list of references and applications.

1 Theoretical foundations of risk management

1.1 The essence and role of risks in the activities of an enterprise

risk management control

The concepts of “risk” and “uncertainty” have a very long, long history. However, this problem began to be studied seriously only in the 19th and 20th centuries, although even before that many works appeared that examined various aspects of risk. Long ago, with the development of world trade, merchants began to insure their possible losses. In addition to financial forms of risk management, they have long used risk diversification.

The mathematical direction of research was developed by Abraham Moivre, who published several editions of the book “Theories of Chance” (1733). They were introduced to the concept of dispersion. The results of this work have found wide practical application. It has become realistic to determine the probability of a parameter falling within a given tolerance range. An effective solution to this problem was proposed in the works of Thomas Bayes. As a result, it became possible to calculate probability values based on empirical data.

The names of Knight, as well as Mill and Senior, are associated with the emergence of the classical theory of entrepreneurial risks. These authors identified two components in the income structure: interest as a share of invested capital and risk payment. In their opinion, risk is the expectation of loss.

J.M. moved much further along the path of distinguishing between risk and uncertainty. Keynes, who outlined his views in A Treatise on Money (1930) and in the fundamental General Theory of Employment, Interest and Money (1937). In the General Theory he distinguishes two types of proposals for the future:

long- and short-term, considers issues of liquidity of financial instruments and offers recommendations on this matter, highlights reserving as a way to combat risk. He is the first to present a classification of business risks. Keynes justifies that the cost of a product must include costs associated with depreciation, including accelerated depreciation, variations in market conditions, accidents and catastrophes. Even the term “risk costs” is proposed, which is necessary for an entrepreneur to compensate for the deviation of actual revenue from expected revenue.

Keynes identified three types of risks in the economic sphere:

Business risk or borrower risk - this refers to the risk of not receiving an acceptable cash flow;

The lender's risk of not repaying the loan, which Keynes divides into two options: deliberate bankruptcy (excessive trust) and accidental bankruptcy (insufficient collateral);

Inflation risk. At the same time, Keynes concludes that money is always less reliable than real property. The main conclusion from his works was the need to strengthen the role of the state in the economy as a risk damper.

Nobel laureates Milton Friedman and James Buchanan argued that, on the contrary, the risks in the area of resource distribution for the state are an order of magnitude higher than for markets. In his work “If Money Could Talk,” Friedman made an attempt to get closer to a mathematical description of risks and to present a mathematical model of economic phenomena.

Later, serious progress in understanding risk and uncertainty was achieved in the theory of strategic games. Game theory introduced a fundamentally new aspect to the understanding of uncertainty, proving that the source of uncertainty is also the intention of others. John von Neumann (1903-1957) outlined his theory of strategic games in 1926.

Later, together with Oskar Morgenstern, he published the work “Game Theory and Economic Behavior” (1944).

In 1952, Harry Markowitz published the work “Portfolio Construction,” which subsequently had a very powerful impact on the theory and practice of financial activity and in 1990 brought the author the Nobel Prize in Economics. The task was set to use the concept of risk when constructing portfolios for investors who consider the planned profit desirable and its fluctuations undesirable. Risk and volatility become synonymous. Return dispersion is a statistic that measures how much a security's returns fluctuate around an average. By replacing rough, intuitive estimates of uncertainty with statistical calculation, the author presented a meaningful procedure for constructing a so-called efficient portfolio.

The main area of business risks is financial market instruments. The most complex and risky of these are derivatives.

Work on an in-depth study of the risk continues. Currently, the International Institute for Risk Research operates in Toronto, where the latter is studied in relation to managerial and commercial areas of activity, stock exchange and foreign exchange transactions. One of the world's richest people, Warren Buffett, announced a project to create a company that will provide new types of services for assessing, managing and insuring risks in the financial industry.

Economists have now distinguished between risk (that which can be quantified with some degree of certainty) and uncertainty (the inability to know for sure what will happen in the future). Uncertainty is a condition in which it is impossible to conduct any research in order to obtain any quantitative or qualitative characteristics and/or specific results.

Uncertainties are classified differently in the work of J. von Neumann and O. Morgenstein “Game Theory and Economic Behavior” (1994): a combinatorial number of options that is impossible to view in the allotted time even with high-speed computers (a complete search of options is impossible; an example of a large number of strategy options can be chess). Random factors of occurring events as a result of the action of random forces: scattering of hits on a target during shooting, random flows of demands into the service system, random flows of funds into the banking system or enterprise, etc.; strategic uncertainty (game uncertainty essentially) due to the unknown behavior of the enemy (partner - another participant in the game, including a game with nature); In their pure form, such uncertainties are a very rare phenomenon. It is usually more realistic to find mixed versions of them; for example, most games can be considered according to the type of uncertainty.

The concept of risk is used in a number of sciences. Research on risk analysis can be found in the literature on technical sciences, legal issues, psychology, medicine, and philosophy. In each case, risk research is based on the subject of study of this science and, naturally, relies on its own approaches and methods. Such a variety of areas of risk research is explained by the multifaceted nature of this phenomenon.

Of particular interest is a comparison of the classical and neoclassical theories of entrepreneurial risk and their economic applications.

In the classical theory of entrepreneurial risk (J. Mill, N.U. Senior), the latter is identified with the mathematical expectation of losses that may occur as a result of the chosen decision. The risk here is nothing more than the damage that is caused by the implementation of this decision.

This interpretation of the essence of risk caused objections among some economists, which led to the development of a different understanding of the content of risk.

In the 30s our century, economists A. Marshall and A. Pigou developed the foundations of the neoclassical theory of entrepreneurial risk. The basics of this theory are as follows:

An entrepreneur works in conditions of uncertainty;

Entrepreneurial profit is a random variable.

Entrepreneurs in their activities are guided by the following criteria:

The size of the expected profit;

The magnitude of its possible fluctuations.

According to neoclassical theory, given the same amount of potential profit, the entrepreneur chooses the option associated with a lower level of risk. Although the consequences of risk are usually perceived as financial losses or less profit, under favorable conditions it is possible to achieve a higher level of profitability than was calculated in the planning process.

Analysis of numerous attempts to classify financial and investment risks carried out in our country in recent years, as well as the study of foreign experience in determining investment risks, allows us to identify common characteristic approaches to the study of the nature of risk, its sources and manifestations.

D. Fisher shares systematic, i.e. constantly present and uncontrollable, risk and unsystematic, which is controllable and manageable. Since there are different definitions of the concept “risk”, in the most general form, risk is understood as the probability of losses or loss of income compared to the predicted option.

In recent years, both in Russia and abroad, the process of assessing and then managing the risk of an enterprise, as a rule, has been an integral part of the asset-liability management (ALM) system of the enterprise. Risk assessment in such systems was reduced to assessing interest rate risk, market risk and analyzing the profitability of operations. At the same time, the weaknesses of the system were the following factors:

A limited number of standard contracts have been introduced into the business practice of enterprises, which do not always fully meet the changing requirements of the business environment for a given enterprise;

A limited number of methods were used for analytical studies;

A limited number of options for assessing the value of enterprise property were used;

A limited number of intervals and the size of the time intervals were used to perform analytical studies.

Thus, the practice that has developed in Russia in recent years of introducing individual elements of risk management at enterprises comes down mainly to managing credit and market risks. As a result, many enterprises that did not adequately take into account in their activities the influence of other, very significant risk factors, such as macropolitical, regional, industry, etc., suffered significant financial losses due to the impossibility of qualitatively predicting the upcoming crisis and the next one. due to a fall in effective demand and product sales volumes.

The risk map serves as the basis for further formalization of information about risks and for the development of measures to manage and assess the risk of the enterprise. In the process of formalizing risk factors in numerical form, each unique factor or group of factors is assigned weighting coefficients corresponding to the degree of influence of each risk factor on the efficiency of the business process of the enterprise in which the specified risk factor is present. The result of this kind of operation is a numerical integrated risk map of the enterprise, in which risk factors are ranked according to the degree of significance of their influence, both on individual business processes and on the efficiency of the enterprise as a whole. Such a map is the basis for carrying out work related to the development of measures to manage the overall risk of the enterprise.

1.2 Risk assessment of financial and economic activities of enterprises at the stage of making management decisions

In the conditions of market relations, the problem of assessing the risks of the financial and economic activities of enterprises acquires independent theoretical and applied significance as an important component of the theory and practice of management.

Businesses should not avoid risk, but be able to manage it. One of the main rules of financial and economic activity says: “do not avoid risk, but anticipate it, trying to reduce it to the lowest possible level.”

Risk should be understood as a consequence of an action or inaction, as a result of which there is a real possibility of obtaining uncertain results of a different nature, both positively and negatively affecting the financial and economic activities of the enterprise.

When analyzing a company's activities, risk classification is important. Requirements for risk classification can be summarized as follows:

This classification should not contain types and subtypes of risk, that is, risks cannot be grouped into certain groups. This can only be a “virtual” association. Otherwise, risk “erosion” may occur, that is, its significance may decrease, and, as a result, incorrect research and assessment;

Each risk must be identified and assessed separately, and the more precisely the risk is defined, the easier it is to assess;

The proposed classification is not rigid. Each manager, when carrying out financial and economic activities, can independently supplement the given list of risks.

The main objective of the proposed risk assessment methodology is to systematize them and develop an integrated approach to determining the degree of risk affecting the financial and economic activities of the enterprise. The following risk assessment algorithm is proposed for use at Shell LLC, which is shown in Figure 1.

Receiving and processing information

Information is a collection of new information about the world around us. All risk researchers do not pay sufficient attention to assessing the quality of the information with which they assess risk.

The requirements for the quality of information should be as follows:

reliability (correctness) of information - a measure of the proximity of information to the original source or accuracy of information transmission;

objectivity of information - a measure of how information reflects reality; unambiguity;

order of information - the number of transmission links between the primary source and the end user;

completeness of information - a reflection of the exhaustive nature of the compliance of the information received with the purposes of collection;

relevance - the degree of approximation of information to the essence of the issue or the degree of correspondence of information to the task;

relevance of information (significance) -- importance of information for risk assessment; cost of information.

Picture 1- Flowchart of a comprehensive risk assessment at Shell LLC

It is proposed to establish a relationship between risk and the quality of information used to assess it. It is suggested that the likelihood of the risk of making a poor-quality (unprofitable) decision depends on the quality and volume of information used. This assumption is taken from neoclassical risk theory. According to this theory, if there are several options for making a decision (with equal profitability), the decision with the lowest probability of risk (fluctuation) is chosen. It can be assumed that even if there are several options with the same profit, a decision is chosen that is based on better information, that is, there is a connection between risk and information.

Figure 2 shows the expected relationship between the probability of risk of making a poor-quality (unprofitable) decision and the volume/quality of information at Shell LLC.

Figure 2 - Relationship between risk and information at Shell LLC

A high probability of risk occurrence corresponds to a minimum of quality information.

Table 1 below allows you to analyze any information and clearly verify its quality.

Table 1 - Assessment of information used at Shell LLC

This table allows you to analyze any information and clearly verify its quality. Numbers 1--10 at the top of the table indicate the quality of information: the better the information, the higher the number it is assigned. The result of the analysis can be the final value of information quality, which is found as an arithmetic mean.
The sources and methods of obtaining information are the following:

Documented information is the most valuable type of information;

The press and printed publications are traditionally the most capacious and widely used method of obtaining information; partner operator data; use of indirect signs (co-process method). Not a single process occurs in a vacuum, in isolation from the environment. This leads to the fact that it will always be accompanied by some independent processes, the manifestations of which can be detected;

agent methods - paid systematic execution of tasks by a person in your interests.

Fixing risks

When assessing financial and economic activities, it is proposed to record risks, that is, limit the number of existing risks using the principle of “reasonable sufficiency”. This principle is based on taking into account the most significant and common risks for assessing the financial and economic activities of an enterprise. It is recommended to use the following types of risks: regional, natural, political, legislative, transport, property, organizational, personal, marketing, production, settlement, investment, currency, credit, financial.

Drawing up an algorithm for the decision to be made

This stage in assessing the risks of financial and economic activity is intended for the gradual division of the planned solution into a certain number of smaller and simpler solutions. This action is called drawing up a solution algorithm.

Qualitative risk assessment

Qualitative risk assessment implies: identifying the risks inherent in the implementation of the proposed solution; determination of the quantitative structure of risks; identification of the most risky areas in the developed decision algorithm.

To carry out this procedure, it is proposed to use a qualitative analysis table. This table shows the algorithm of actions when making a decision in rows, and previously fixed risks in columns. So, when deciding to place new base stations at one of the communications enterprises, the risk assessment may look like this, see Table 2

After compiling this table, a qualitative analysis of the risks inherent in the implementation of this solution is carried out.

The main goal of this assessment stage is to identify the main types of risks affecting financial and economic activities. The advantage of this approach is that already at the initial stage of analysis, the head of the enterprise can clearly assess the degree of riskiness based on the quantitative composition of the risks and already at this stage refuse to implement a certain decision.

Table 2 - Qualitative risk assessment using the example of Shell LLC

Quantitative risk assessment

It is proposed to base the quantitative risk assessment on the methodology used when conducting audits, namely: risk assessment based on control points of financial and economic activities. The use of this method, as well as the results of qualitative analysis, make it possible to conduct a comprehensive assessment of the risks of the financial and economic activities of enterprises.

Quantitative risk assessment is carried out on the basis of data obtained during their qualitative assessment, that is, only those risks that are present during the implementation of a specific operation of the decision-making algorithm will be assessed.

For each recorded risk, a risk assessment table is compiled based on data obtained from statistical, scientific, periodic sources, as well as on the personal experience of managers. These risk assessment tables are compiled in such a way as to most fully identify the constituent risk factors. Using this approach, high efficiency of qualitative assessment of the financial and economic activities of an enterprise is achieved. The problem of subjectivity in assessment can be eliminated by using the Delphi method.

In the tables compiled, the values that most closely correspond to the questions posed are selected. In some cases, it is proposed to independently determine the risk value on a ten-point scale. After selecting the risk value, if its level exceeds 0.8, an arbitrary mark (+) is made in the corresponding column. The final stage of filling out the columns of the table is to indicate the value of the quality of the information on the basis of which the decision was made. At the end of the table, the final quantitative assessment is summed up as the arithmetic mean of all indicators of risk components. As an illustration, we offer a part of the organizational risk assessment table, filled out in a real situation in Table 3

Decision-making

Decision making is the final and most critical procedure in risk assessment.

When developing a strategy of behavior and in “the process of making a specific decision, it is advisable to distinguish and highlight certain areas (risk zones) depending on the level of possible (expected) losses in financial and economic activities.”

Thus, based on a generalization of the research results of many authors on the problem of quantitative assessment of risks in the financial and economic activities of enterprises, an empirical risk scale has been developed and proposed, which can be used in its quantitative assessment in the table

Table 3 - Summary table of organizational risk assessment (fragment) using the example of Shell LLC

Decision making consists of three stages:

Stage 1 - preliminary decision making

A preliminary decision is made on the basis of the arithmetic mean value of a particular type of risk and the quality of information separately for each operation of the decision-making algorithm

Stage 2 - analysis of critical values

At this stage of the assessment, an analysis is carried out of those risk components whose values exceed a critical value (in our case, this value is 0.8). The need for this action is to identify and highlight those components for which the probability of risk is very high, which can lead to the loss of all invested funds and bankruptcy of the enterprise.

Table 4 - Empirical risk scale using the example of Shell LLC

Stage 3 - making a final decision

The final decision is made based on the results of the preliminary decision and analysis of critical values. As mentioned earlier, when making decisions under conditions of uncertainty, special attention should be paid to the quality of information. In this regard, it is proposed to use risk information table 5 for decision making.

Table 5 - Risk-information table for decision making at Shell LLC

This table is compiled based on the final results obtained during testing of the proposed method at Shell LLC.

1.3 Classification and types of risks of oil and gas enterprises

Risks are divided into:

Economic;

Socio-political;

Fiscal and monetary.

Insurance risk combines those mentioned above - this is the risk of changes in current and future system conditions.

E.S. Ozerov offers a general classification of risks in the following interpretation: Table 6

Table 6 - General classification of risks

Types of risks		Domestic
1.Physical	Environmental pollution	Hidden defects
	Technical disasters	Fires and accidents at facilities
	Natural disasters	Flaws in equipment and technology
2. Legal	Policy instability	Document errors
	Imperfection of laws	Non-fulfillment of contracts
	Flaws of government regulation	Legal costs
	Conflicts with countries	Prohibitions on diversification
3.Economic	Market saturation	Marketing miscalculations
	Lack of resources	Operating losses
	Unaccounted inflation	Low liquidity
	Economic downturn	Losses due to personnel
4. Financial	Unavailability of loans	Financing failures
	Currency instability	Currency losses
	State debt	Loss of creditworthiness
5. Social	Attitude towards investors	Problems with neighbors
	Social conflicts	Labor conflicts
	Crime in the region	Crimes on site

The proposed classification takes into account both external and internal risks. Disclosure of these risks will make it possible to take into account their impact when managing oil enterprises and solve economic problems with minimal losses.

For oil and gas market entities, the sources and consequences of risks are varied. External risks are caused by the manifestation of external factors (environment, interstate relations, financial risks, etc.). Internal factors are risks that arise during the creation of an object at the micro level.

Let's consider the types of risks that oil and gas enterprises bear.

During the development of a methodology for identifying (assessing) risks in the oil and gas industry, experts identified the following types of risks:

Industry risks (risks associated with possible changes in prices for oil and petroleum products, industry competition, and geological exploration activities);

Country and regional risks (political risks, risks associated with foreign assets);

Financial risks (credit risk, currency risk, interest rate risk, inflation risk);

Legal risks (risks associated with changes in currency regulation, changes in tax legislation);

Environmental risks (environmental pollution);

Risk of shortage of highly qualified human resources;

Industry risks

In the process of carrying out economic activities, they use the infrastructure of monopoly service providers for the transportation of gas, oil and petroleum products. Companies have no control over the infrastructure of these monopoly suppliers and the level of tariffs charged. It should be noted that the tariffs are regulated by the regulatory authorities of the Russian Federation, however, despite this, tariffs are increased annually, which leads to increased costs for the Companies. In addition, lack of control over the infrastructure of service providers can lead to failures in the enterprise’s logistics system.

To reduce the impact of these risks, the enterprise:

Carries out long-term planning of commodity flows, timely reservation of volumes of pumping oil and petroleum products and the necessary rolling stock;

Conducts optimal redistribution of commodity flows by mode of transport;

Takes measures to use alternative and own sources of electricity generation.

These measures make it possible to reduce the risks associated with the use of services and the purchase of goods from monopoly suppliers to an acceptable level and ensure the uninterrupted operation of the enterprise.

Risks associated with possible changes in prices for oil and petroleum products

The financial performance of the enterprise is directly related to the level of prices for crude oil and petroleum products. The company does not have the ability to control prices for its products, which depend on fluctuations in the balance of supply and demand in the global and domestic markets, the volume of consumption in these markets, as well as the actions of regulatory authorities. The main consequence of lower prices for oil and petroleum products is the deterioration of the financial performance of the enterprise. In order to reduce the negative impact of the above risks in the enterprise:

Comprehensive measures have been developed to reduce the cost of mining;

A flexible system for the distribution of commodity flows has been introduced, allowing for the prompt and timely redistribution of commodity flows in the event of a significant price difference for oil and petroleum products between the external and domestic markets;

There is a business planning system in place, which is based on a scenario approach to determining key performance indicators of an enterprise depending on the level of oil prices on the world market. This approach makes it possible to reduce costs, including by reducing or deferring investment programs to future periods. These measures make it possible to reduce risks to an acceptable level and ensure that the enterprise fulfills its obligations. It should be noted that, in accordance with the analytical reports of the Ministry of Economic Development based on the results of 2009, since April 2009 there has been a tendency towards an increase in the value of exports, which is due to the recovery in oil prices (from 43.5 dollars per barrel in the first quarter to 74. 1 dollar per barrel - in the fourth quarter).

Risks associated with industry competition

In the Russian oil and gas industry, there is intense competition between leading Russian oil and gas companies in the main areas of production and economic activity, including:

Acquisition of licenses for the right to use subsoil for the purpose of hydrocarbon production at auctions organized by Russian government bodies;

Acquisition of other companies that own licenses for the right to use subsoil for the purpose of hydrocarbon production or existing assets associated with the production of hydrocarbons;

Implementation of foreign projects;

Attracting leading independent service companies;

Purchase of high-tech equipment;

Acquisition of existing retail distribution network enterprises; and land plots for new construction;

Expansion of sales markets and sales volumes.

The management's implementation of a portfolio of strategic projects aimed at development in key areas of activity ensures the gradual strengthening of the Company's position in the competitive environment of the oil and gas industry, ensuring a reduction in risks associated with industry competition.

Risks associated with geological exploration activities

The Company’s key strategic objective is to increase the hydrocarbon resource base in quantitative and qualitative terms to ensure the required level of production, which, in turn, largely depends on the successful implementation of geological exploration activities. The main risk associated with geological exploration activities is the failure to confirm planned levels of hydrocarbon reserves. An important factor is the conduct of geological exploration work in various geographical regions, including areas with unfavorable climatic conditions, which often leads to the risk of increased costs.

Country and regional risks

Political risk

Currently, the political situation in Russia is stable, which is characterized by the stability of the federal and regional branches of government. In general, the political situation in the country is assessed as stable and it is believed that at the moment there are no risks of negative changes.

Risks associated with foreign assets

Entering new regions is associated both with the possibility of obtaining additional benefits and with the risks of underestimating the economic and political situation in the countries in which the Company’s assets are located, which may subsequently lead to the loss of assets or failure to achieve planned performance indicators. At the moment, the level of risks associated with foreign assets is assessed as acceptable, but cannot guarantee the absence of negative changes, since the described risks are beyond the control of the Companies.

Financial risks

The Company's policy in the field of risk management is aimed at identifying and analyzing the risks faced by the Company, establishing appropriate limits and controls, monitoring risks and compliance with established limits. The risk management policy is regularly reviewed in order to correctly reflect current market conditions and the group's activities in these conditions. Financial risk management in the Company is carried out by the Company’s employees in accordance with the areas of their professional activities.

The Financial Risk Management Committee determines a unified approach to financial risk management in the Company. This approach is based on reducing the impact of risks and the likelihood of their occurrence by implementing appropriate measures and control procedures. The activities of the Company’s employees and the Financial Risk Management Committee help reduce potential financial damage to the Company and achieve its goals.

Credit risk

The Company's management pays increased attention to the credit risk management process. The Companies have implemented a number of measures that allow for both effective monitoring of risk status and risk management, including: assessing the creditworthiness of counterparties, setting individual limits depending on the financial condition of the counterparty, monitoring advance payments, measures for working with business receivables - directions, etc.

These actions allow the management of the Companies to be confident that at the moment there are no significant risks of loss exceeding the amount of accrued reserves. Companies place temporarily available funds on deposit in a number of Russian banks. The Companies have a policy in accordance with which the creditworthiness of banks in which deposits are placed is regularly assessed and banks are ranked by degree of reliability.

Currency risk

The bulk of gross revenue comes from export operations for the sale of gas, oil and petroleum products. Accordingly, fluctuations in exchange rates between currencies and the ruble have an impact on the results of the financial and economic activities of the Companies, which is a risk-forming factor. The Company's currency risk is significantly reduced due to the presence of costs that are denominated in foreign currency. A significant portion of the Company's loans is raised on the international credit market in US dollars. Current service obligations for these loans are also denominated in dollars. The currency structure of revenues and liabilities acts as a hedging mechanism, where multidirectional factors compensate each other. The balanced structure of claims and obligations in currency minimizes the impact of currency risk factors on the results of the financial and economic activities of the Companies. In terms of the unbalanced share of the Company's claims and obligations, hedging of these risks is applied, and in each specific situation it uses internal tools and reserves to effectively manage currency risk and guarantee the Company's fulfillment of its obligations.

Interest rate risk

As a large borrower, the Company is exposed to risks associated with changes in interest rates. The main source of borrowing is the international financial market. The majority of the debt portfolio consists of loans and borrowings denominated in US dollars. The interest rate for servicing a portion of existing loans (the share is not fixed and may change) is based on interbank lending rates (LIBOR). An increase in these interest rates may lead to an increase in the cost of servicing the Company's debt. An increase in the cost of loans for Companies may have a negative impact on solvency and liquidity indicators. However, at present, the LIBOR rate is at a relatively low historical level and has a medium-term tendency to stabilize, which, combined with the relatively small share of loans based on LIBOR, suggests a low level of influence of interest rate risk on the Company.

Inflation risk

Inflation risk is taken into account when drawing up the financial plans of the Companies. Existing and projected inflation levels are far from critical values for the Companies and the industry as a whole; based on this, the impact of inflation factors on the financial stability of the Companies in the future does not seem significant.

Risk associated with changes in currency regulation

Companies are participants in foreign economic relations. Part of the assets and liabilities of the Companies is denominated in foreign currency, therefore, changes by the state in the mechanisms of currency regulation, in general, may affect the financial and economic activities of the Company. At the same time, at present, the currency legislation of the Russian Federation has been significantly liberalized. This is due to the general policy of the state aimed at ensuring the free convertibility of the ruble. The carried out liberalization of currency regulation reduces the risks of negative consequences for the Company’s activities associated with subsequent changes in currency legislation.

Risk associated with changes in tax legislation

Companies are one of the taxpayers whose activities are based on the principles of good faith and openness of information to the tax authorities. Companies bear the burden of paying value added tax, income tax, mineral extraction tax, property tax, and land tax. The results of the tax reform can be assessed positively: the taxation system is structured, the mechanisms and rules for collecting taxes are simplified, and tax rates are reduced. The practice of considering cases in the Constitutional Court of the Russian Federation shows that the provisions of the fundamental law affect the tax rights of business entities and protect taxpayers from unreasonable and sudden increase in the tax burden. Since the tax period for 2009, the cut-off price for the mineral extraction tax has been increased from 9 to 15 US dollars per barrel, the depreciation bonus for new fixed assets has been increased, and the period for writing off the cost of a license has been reduced to two years. Starting from the tax period for 2009, depreciation periods for certain types of equipment and structures in the oil and gas industry (including oil production wells) have been reduced; since 2010, depreciation periods for drilling equipment and some types of structures in the oil and gas industry have been reduced. The mentioned factors allow us to conclude that the tax system of the Russian Federation is becoming more stable, and the activities of business entities in the Russian Federation, from the point of view of tax consequences, are becoming more predictable. At the same time, we cannot exclude the possibility that the state will increase the tax burden of payers caused by changes in certain elements of taxation, the abolition of tax benefits, increased duties, etc.

Legal risks

Companies base their activities on strict compliance with civil, tax, customs and currency legislation. Companies cannot guarantee the absence of negative changes in Russian legislation in the long term, since most risk factors are beyond the control of the Companies. Reducing the negative impact of this category of risks is achieved through monitoring and timely response to changes made in various areas of legislation, as well as through active interaction with legislative and executive authorities, and public organizations in matters of interpretation and improvement of legislative norms.

Risks associated with changes in currency regulation

The establishment of restrictions by the state that reduce the possibility of converting ruble income into foreign currency and reverse conversion of rubles due to mandatory repatriation and conversion requirements may have an adverse effect on the results of operations of the Companies. Currently, the currency legislation of the Russian Federation has been significantly liberalized, which significantly reduces the risks of negative consequences for the activities of the Companies.

Risks associated with changes in tax legislation

All companies are taxpayers who pay federal, regional and local taxes, in particular mineral extraction tax, value added tax, corporate income tax, unified social tax, corporate property tax, and land tax. At present, the process of reforming Russian tax law can be considered completed. The legislative body has been codified. The general part of the Tax Code, in force since 1999, enshrines the basic principles of taxation and the introduction of new taxes; the operation of these principles and the focus on protecting the property interests of taxpayers are implemented in law enforcement practice. A special part of the Tax Code establishes taxes that form the tax burden of the issuer and defines the elements of taxation. Over the past 10 years, the value added tax rate has been reduced by 2%, the profit tax rate has been reduced by 15%, a regressive scale of rates for the unified social tax has been established, sales tax and other mandatory payments have been abolished.

Environmental risks

The production activities of oil and gas companies involve a potential risk of environmental damage or pollution, which, as a consequence, may lead to civil liability and the need to carry out work to eliminate such damage.

The company is fully aware of its responsibility to society for creating safe working conditions and maintaining a favorable environment, constantly monitors its activities to ensure compliance with relevant environmental standards, and implements environmental protection programs.

The company's policy in the field of environmental protection is aimed at ensuring compliance with the requirements of current environmental legislation by investing significant funds in environmental protection measures, including the use of technologies that minimize the negative impact on the environment.

Risk of shortage of highly qualified human resources

The problem of the shortage of highly qualified personnel remains relevant regardless of the economic situation. As the economy recovers, the industry will increasingly need highly skilled professionals, a shortage of which could lead to project delays or cancellations, lower productivity levels and increased operating costs. In Russia, some of Russia's leading engineers, senior managers and other specialists are approaching retirement age. However, there is no absolute certainty that among the younger generation there will be a sufficient number of specialists capable of taking their places. At the same time, educational institutions are producing a record number of such specialists. However, it must be taken into account that they will require many years of practical training during their professional careers to ensure that their level of training meets the needs of the industry.

Possible measures to manage this risk:

To avoid duplication of functions and inefficiencies, companies must define, coordinate, and centrally manage HR processes. This will allow HR specialists to concentrate on the problems of working with personnel;

Creating an attractive image of the industry for young professionals;

Effective use of the experience of the older generation of employees. Professional development of employees at both local and regional levels, combined with investment in the formation of corporate culture and training of staff in foreign languages. This will help avoid language barriers and misunderstandings while bridging cultural differences between expatriate managers and local employees.

Chapter 2. Analysis of the risk management system at Shell LLC

2.1 General characteristics of Shell LLC

All enterprises involved in the exploration and production of oil and gas, refining and marketing of oil and petroleum products, naturally, are associated with funds, and quite considerable ones at that. Both the seller and the buyer strive to protect their interests and eliminate all possible risks.

Since the oil and gas industry is all assets, one should learn to manage risks, taking into account the diversity of the “material wealth” system.

Shell has been operating in the oil and gas industry in Russia since 1983, and in 1992 registered the Shell Oil company for the sale of lubricants. Shell in Russia follows the general policy of the state, contributing to the solution of pressing social problems. In the educational field, Shell provides support to universities and participates in a program for training Russian students at UK universities.

Currently, Shell is one of the largest foreign investors in the Russian economy. Today, Shell companies and joint ventures operate in Russia in various business areas: exploration, production and transportation of oil and gas, marketing of lubricants, chemicals and petroleum products, motor and industrial oils, as well as in the construction and operation of a network of gas stations.

Today Shell is a large global company engaged in the supply and retail trade of petroleum products. Shell LLC operates in the field of sales of petroleum products. The form of ownership of the company is a limited liability company. The largest shareholders (participants) are Shell Oversiz Holding Ltd. (100%) (UK). Shell is one of the leaders in the extraction, marketing and production of oil and gas. This is due to the fact that specialists with extensive experience and experience were attracted, who are valued in the oil and gas industry market. This reduces the risk of bankruptcy during the operation of the enterprise.

Shell's activities are governed by the Shell General Business Principles standards. These include a commitment to fundamental rights alongside the legitimate role of business. Shell is committed to operating with integrity, even when our exploration of oil and gas takes us to difficult locations and politically challenging countries. Shell regularly pays taxes and duties.

List of documents provided by the company to interested parties:

Certificate of state registration;

A document granting the right to use a trademark registered in the prescribed manner;

Certificate of conformity of services provided by the enterprise for the production, processing and sale of oil and petroleum products in accordance with standards and legal requirements;

Tariffs and prices for the provision of services for the production and sale of petroleum products;

A book of complaints and suggestions, numbered, laced and sealed;

Description of the procedure for considering complaints and claims;

Drawing. Integration of a system for assessing the effectiveness of risk management into the risk management process

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