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Continuity of entrepreneurial activities and enterprise risk management

Klučka J.

Logistics and Transport

2010

Vol. 11, No. 2

25-30

An enterprise performs its activities within micro-, macro-and internal environment. The characters are subject of these environments and their consequences are many times in contradiction to defined enterprise objectives. The specific items are generally called risks. The risk is quantified as the multiplication of likelihood and the consequences of the specific event. There is optimal level of risk (generally) what is a compromise between the amount of risk and return/ invested capital. Intuitively this assumption is clear but the problem in practice is to answer/solve following questions: How to establish optimal level of risks? Is there only one level or is there a hierarchy of enterprise risks? How to evaluate/quantify risks and their consequences? Is there a set of relevant/irrelevant risks and under which criteria to define them? How to proceed to establish organizational structures responsible for/focused on risk management? Nowadays, an enterprise is facing to the following risks: globalization, loss of reputation, shortening of a product life cycle, new technologies, catastrophic events (natural catastrophes, catastrophes as the impact of man-made activities), different economic and non-economic risks active in interaction between an enterprise and its environment. Risks mentioned above are complex, while specific situation of an enterprise can be characterized by political, social, technological, technical and other features. All this says about "downsizing of entrepreneurial world" and "acceleration of the development", those threats existence and operation of an enterprise.