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Risk Tolerance as a Criterion for Security-Oriented Management of Industrial Enterprise
Bashynska I. O.

Bashynska, Iryna O. (2019) “Risk Tolerance as a Criterion for Security-Oriented Management of Industrial Enterprise.” Business Inform 11:330–336.
https://doi.org/10.32983/2222-4459-2019-11-330-336

Section: Management and Marketing

Article is written in Ukrainian
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UDC 658.012.8

Abstract:
The article is aimed at exploring and substantiating the basic provisions of risk tolerance as a criterion for security-oriented management of industrial enterprise. The position of risk tolerance as a criterion for for security-oriented management of industrial enterprise is substantiated. In order to remain competitive in the business environment, industrial enterprises must adhere to two parallel strategies: 1) building dynamic and flexible risk management systems that can anticipate changes that entail long-term success, and preparing the company for such changes; 2) building risk resistance that will allow such systems to mitigate risk events and provide businesses to move towards their goals. Sustainability in conditions of the security-oriented management of industrial and economic systems is the ability of a management system to respond adequately to threats of risk factors, in view of the internal vulnerability, using reserved resources to conduct the core business in a wisely manner. In this case, the first priority is to create conditions that will help shape the capability of the system to change and adapt its risk management infrastructure to respond quickly to changing market conditions, consumer preferences and market dynamics. The enterprise’s risk management requires a system approach. To support the activities of all units and activity directions, it is necessary to create a unified environment of risks management. The introduction of a unified classifier and an individual risk registry will enable conducting analysis and enhancing the flexibility to manage the identified risks or implement changes. For each risk category, an owner is assigned, timing and tasks for risk analysis are defined to take into account the specifics and requirements of each business process. At all levels of management, this approach allows for the formation of responsibility areas and risk monitoring areas and elaboration of the targeted response plans. To introduce security-oriented management and allocate risk sustainability as a criterion for a management system, it is proposed to expand the methodological framework for integrated risk management, including recommendations in terms of business planning and business process risks, financial risk assessments, the monitoring and testing methods. The availability of financial and economic reserves is a prerequisite for sound corporate management, otherwise there is a possibility of loss of economic sustainability. A risk tolerance is provided by a risks management system based on a formalized model that takes into account the internal needs of enterprise. A risk tolerance presupposes that management system acquires real opportunities to localize the harmful effects of risk factors that are achieved through the perceived impact of management at the cost of the reserves provided. At the same time, sustainability indicators provide the necessary conditions of capability and sufficiency for security-oriented management with indication of weak signals of crisis. At that, an enterprise, as a complex organizational system, must acquire the abilities to withstand the destabilization of the business through sustainable processes, control, and risks management means and methods, including a clear corporate structure and a strong market position, which is the hallmark of the risk-tolerant industrial enterprise, which will be the subject of further scientific research.

Keywords: risks, risk tolerance, oriented management, industrial enterprises, risks management.

Fig.: 1. Formulae: 2. Bibl.: 14.

Bashynska Iryna O. – Candidate of Sciences (Economics), Associate Professor, Department of Accounting, Analysis and Audit, Odesa National Polytechnic University (1 Shevchenka Ave., Odesa, 65044, Ukraine)
Email: [email protected]

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