ENTERPRISE RISK MANAGEMENT

Authors:

Danijela Miloš Sprčić, Davor Zoričić, Ena Pecina, Andrija Sabol, Ivana Dvorski Lacković, Luka Štambuk, Klara Bedeković, Domagoj Mataić, Branimir Prelec, Arjeton Smakići, Damir Žitko, Ivan Dobra, Ivan Dominik Hüverth, Ivka Bernatović, Mirta Domitrović, Vita Grozdanić, Nino Ivanov, Mislav Paić-Karega, Petar Tolić, Zvonimir Užnik, Mia Rakarić, Marta Nimac, Marta Kralj, Matija Čemerin, Matej Kupres, Marin Kalac, Mihovil Arh

Edited book Enterprise Risk Management: Theory and Practice with Selected Case Studies of Multinational Companies is a joint work of professors, researchers, students and alumni of the Faculty of Economics and Business, University of Zagreb. Conditions of increased complexity and uncertainty, associated with the Global financial crisis and COVID-19 pandemic, created the need for a comprehensive strategic approach to risks called Integrated or Enterprise-wide Risk Management (ERM). ERM is a process that systematically and comprehensively identifies and quantifies different types of business risks – financial, operational and strategic – at all levels of the organization and manages them effectively in order to increase the value of the company and achieve short-term and long-term business goals.

The Faculty of Economics & Business, University of Zagreb offers education in Enterprise Risk Management to provide the students with relevant knowledge, skills, and competencies in this interdisciplinary field that blends economic theory, finance theory, and theory of management. The book Enterprise Risk Management: Theory and Practice with Selected Case Studies of Multinational Companies presents the results of active cooperation between academics and students related to development of business case studies of multinational companies that enabled the application of knowledge acquired on the Risk Management course.

The book has eight chapters. A detailed explanation of new risk management paradigm, the ERM process and methodology can be found in the first chapter, which explains the multidimensional model of enterprise risk management as well as the advantages of the holistic risk management approach and its impact on the value and performance of the company. The second chapter explains the methods and approaches to managing different types of strategic, financial and operational risks. The third chapter describes the importance of diagnostic business analysis methods in enterprise risk management, while the fourth chapter presents the application of the Monte-Carlo simulation in project risk analysis. The first four chapters were written by Professor Danijela Miloš Sprčić, PhD, Associate Professor Davor Zoričić, PhD, Ena Pecina, PhD, Andrija Sabol, PhD, Ivana Dvorski Lacković, Luka Štambuk and Klara Bedeković. Chapters five to eight present the cases of business analysis, risk identification, evaluation and management in Tesla Company, Amazon, Atlantic Grupa and Volkswagen. The cases were authored by 20 students who enrolled on the course Risk Management in the academic year 2019/2020 - Domagoj Mataić, Branimir Prelec, Arjeton Smakići, Damir Žitko, Ivan Dobra, Ivan Dominik Hüverth, Ivka Bernatović, Mirta Domitrović, Vita Grozdanić, Nino Ivanov, Mislav Paić-Karega, Petar Tolić, Zvonimir Užnik, Mia Rakarić, Marta Nimac, Marta Kralj, Matija Čemerin, Matej Kupres, Marin Kalac, Mihovil Arh.

The book was reviewed by Professor Silvije Orsag, PhD, Head of the Department of Managerial Economics at FEB Zagreb, and Professor Darja Peljhan, PhD, from the School of Economics and Business, University of Ljubljana.

Reviewers:

Professor Silvije Orsag, PhD, Head of the Department of Managerial Economics, Faculty of Economics and Business, University of Zagreb

“The book Enterprise Risk Management: Theory and Practice with Selected Case Studies of Multinational Companies focuses on the modern holistic approach to risk management. It was developed as a result of long-term field research at the Faculty of Economics & Business, University of Zagreb and the teaching practice in the Risk Management and Strategic Risk Management courses that are delivered under the auspices of the Department of Managerial Economics and within the Analysis and Business Planning study programme. The publication of this book coincides with the celebration of the centenary of the Faculty of Economics & Business and presents a testimony to the continuous development of economic thought, rapid adoption of new achievements in economic theory, and the practical application of state-of-the art knowledge at different levels of university and professional study programmes in accordance with the modern developments, regardless of the different political systems in which the Faculty operated.

The book Enterprise Risk Management is not only a good overview of the work completed by the students of the Faculty of Economics & Business, University of Zagreb that testifies to their above average knowledge and skills in the field of risk analysis gained through their studies within the integrated university programme and specialization in Analysis and Business Planning. It also represents a valuable read for all those who want to learn more about integrated risk management and who specialize in this field. The book reveals the roots of integrated risk management in financial analysis by linking many celebrated models of financial analysis with risk management as one of the levers of value based management. Likewise, the book demonstrates the interdependence of risk management with the process of business analysis and planning. Therefore, it is an original monograph in the field of risk management. Furthermore, due to its significant educational features it can be characterized as a textbook that provides a learning platform for the students of economics and business who are interested in the field of risk management. In addition, the book provides a solid starting point for performing company risk analysis, which makes it a useful manual for conducting risk analyses in the context of an integrated approach to corporate risks. “

Professor Darja Peljhan, PhD, The School of Economics and Business, University of Ljubljana

“Risk management enables organisations to address the risks that are important in their activities and processes to achieve organisational objectives and implement the strategy. A risk management system is a system used by managers in an organisation to manage risks. Risk management indicators help managers monitor and assess organisational progress toward strategic objectives. Historically, risk management systems evolved through different stages, from the traditional risk management stage to the most developed enterprise risk management (ERM) stage. ERM is regarded as the most developed risk management system, representing a holistic approach to risk management. ERM looks at the organisational risks as well as cross-functionally, rather than evaluating risks within a particular department or function. Organisations implement risk management through various stages, depending on the need and choice of an organisation. In recent years, risk management has received a lot of attention from academics, practitioners, and regulators. It is a wide-ranging topic that has been addressed by many fields, such as finance, accounting, auditing, corporate governance, (strategic) management, and public policy. In this respect, the edited book Enterprise Risk Management is a valuable collection of eight chapters offering a multi-perspective view of enterprise risk management as a result of the joint efforts by academics and their students... I appreciate greatly the opportunity to review the edited book Enterprise Risk Management. Besides being an enjoyable read, it covers a wide range of concepts for managing risk in a holistic way by combining interdisciplinary views on the value of risk management. As such, represents a noteworthy contribution to the field of risk management. Therefore, I recommend the book to academics, students and experts, and encourage its use in courses covering risk management.”