Risk Management Implementation Into the Strategic Management System

Abstract

The article considers the basic notions of strategic and risk management of entities as an essential factor in ensuring efficient functioning and adaptation to the fast-changing conditions of the external environment. Implementation of risk management into the strategic management system is a valuable factor for a company's effective functioning in complex conditions of the contemporary business environment. Embodying a company's strategic plans demands considering the ambiguity of the environment and carrying managerial influence on risks as a must during the implementation of any strategy. That is why, when developing and implementing any strategy, one must consider associated risks. The article defines the place of risk management in the strategic planning process. It proves that being integrated into strategic planning, risk management enables the minimization of their negative effect on reaching organizational goals. The author offers a procedure to carry out risk-considering strategical management, stipulating ten successive steps: identification, analysis and assessment, elaborating responses based on the risk assessment results, choosing a method for risk management (processing risks), selecting managerial actions for risk processing, development risks management strategy, implementation, assessment of the strategy results, risks monitoring, corrections to the strategy. Risk management implementation into the general organizational strategy enables the minimization of probable losses within the uncertainty of conditions. The article contains a comparative analysis of qualitative and quantitative risk assessment methods. The represented pattern of the risk assessment and management methods enables the selection of the one that fits excellently to the internal and external environment of a company and ensures the effective delivery of the strategy. Risk monitoring has been demonstrated to be one of the basement risk-management tools. Risk monitoring shall accompany the whole strategy implementation process to detect any deviations between actual risk levels and forecasted ones and correct the implementation of the strategy.