Risk management in the context of management control

Aims of the course

1. To define the basic characteristics of management control systems and risk management systems;
2. To understand the role of risk management in management control with the purpose of providing right information for decision making;
3. To analyze risk and evaluate the impact on performance.

Course syllabus

1. Management control under uncertainty
1.1. Uncertainty
1.2. Risk and uncertainty
1.3. Reactions to uncertainty
1.4. The origins of management control
1.5. The management control crisis of the late 20th century
1.6. Current approaches to management control and uncertainty
1.7. The role of management control in business decision making: providing right information for decision making
1.8. Diagnostic and interactive control
1.9. Handling uncertainty with advanced control systems

2. Risk
2.1. Definition of risk and why companies incur risk
2.2. Types and sources of risk for business organizations, its impact on performance and strategy: Identification, classification and evaluation of risk
2.2.1. Business risks
2.2.2. Financial risks
2.2.3. Reputational risks associated with social and environmental impacts
2.2.4. Risks arising from international operations: cultural differences and differences between legal systems
2.2.5. Economic risk
2.2.6. Political, legal and regulatory risk

3. Behavioral implications of risk
3.1. Rational analysis of risk: economics and finance
3.2. The psychology of risk and decision-making
3.3. The social and organizational context of decision-making: risk appetite by decision-makers


4. The role of risk management in management control
4.1. Development of risk management systems leading to enterprise risk management (ERM)
4.2. Risk management and shareholder value
4.3. The COSO ERM framework
4.4. CIMA's risk management cycle

5. Risk management strategy as a starting point for management control
5.1. Risk appetite
5.2. Risk attitude and risk capacity

6. Identifying, measuring and assessing risks for management control
6.1. Methods of risk identification
6.2. Risk register as an instrument of management control
6.3. Overview of techniques for measuring the impact of the risk factor
6.4. Risk (or assurance) mapping for management control
6.5. Risk response strategy
6.5.1. Risk treatment methods
6.5.2. Case studies
6.6. Risk reporting
6.7. Evaluating risk management strategy for management control

7. Risk management roles and responsibilities
7.1. Implementation of risk management and allocation of responsibilities
7.2. Case Study: Risk management and management control
7.3. Case Study: Calculative cultures in risk management
7.4. Ethical dilemmas associated with risk management and management control

Course director(s)