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Costs and Benefits of Risk Management

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Aviation Risk and Safety Management

Part of the book series: Management for Professionals ((MANAGPROF))

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Abstract

This chapter provides an overview of: Different sources of risk from a microeconomic perspective The conflicting nature of risk perception: managers vs. shareholders Different risk perceptions of shareholders and stakeholders Systemic risk in network industries Implications of risk management on an operational level The cost and benefits of implementation and optimization of risk management for the company

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Notes

  1. 1.

    FERMA and ECIIA (2010).

  2. 2.

    Fatemi and Luft (2002).

  3. 3.

    Tufano (1996).

  4. 4.

    Fatemi and Luft (2002).

  5. 5.

    Fatemi and Luft (2002).

  6. 6.

    Fatemi and Luft (2002).

  7. 7.

    Hallikas, Karvonen, Pulkkinen, Veli-Matti, and Tuominen (2004).

  8. 8.

    Alvarez and Barney (2001).

  9. 9.

    Willianson (1993).

  10. 10.

    Das and Teng (1996).

  11. 11.

    Parkhe (1993).

  12. 12.

    Rugman (1982).

  13. 13.

    Brouthers (1995).

  14. 14.

    Das and Teng (1996).

  15. 15.

    Ring and Ven (1994).

  16. 16.

    Das and Teng (1996).

  17. 17.

    Badaracco (1991).

  18. 18.

    Kogut (1991).

  19. 19.

    Murray and Mahon (1993).

  20. 20.

    Oliver (1990).

  21. 21.

    Powell (1987).

  22. 22.

    Das and Teng (1996).

  23. 23.

    Alvarez and Barney (2001).

  24. 24.

    Das and Teng (1996).

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Author information

Authors and Affiliations

  1. Center for Aviation Competence, University of St. Gallen, St. Gallen, Switzerland

    Andreas Wittmer

Authors
  1. Andreas Wittmer
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Corresponding author

Correspondence to Andreas Wittmer .

Editor information

Editors and Affiliations

  1. Center for Aviation Competence, University of St. Gallen, St. Gallen, Switzerland

    Roland Müller

  2. Center for Aviation Competence, University of St. Gallen, St. Gallen, Switzerland

    Andreas Wittmer

  3. P3 Aviation, P3 Group, Lorsch, Germany

    Christopher Drax

Appendix: Sample Risk Manager Job Description

Appendix: Sample Risk Manager Job Description

1.1 Sample Company

1.1.1 Risk Manager Job Description

  1. 1.

    General Information

    Job Title

    Risk Manager

    Appointed by

    Executive Committee (EC)

    Supervisor

    Chief Executive Officer (CEO)

    Starting date

    1 April 2014

    Percentage

    30 percent

    Deputy

    Chief Financial Officer (CFO)

    Subordinates

    None

    Additional function

    Head of Quality

    Signatory rights

    None

    Competencies

    Right to inspect all business documents, legal right to inform all employees, reports directly to the Chairman of the Board

  2. 2.

    Duties

    • Monitoring and optimization of the risk management process

    • Ongoing mitigation of the key risks of the sample company

    • Ensuring adequate insurance coverage

  3. 3.

    Requirements

    • Social and interpersonal skills

    • Independent, accurate and structured way of working

    • Flexible and resilient, solution-oriented

    • Optimization focus

    • Openness to new ideas and changes

    • Loyal and discreet

    • Planning and organizational ability

    • Expertise in Risk Management

    • Basic training in Risk Management

    • Interdisciplinary understanding

    • Networked thinking

    • Organizational strengths

    • Willingness to participate in ongoing training in Risk Management

  4. 4.

    Key Activities

    • Risk analysis:

      • Preparation of annual risk analysis (as part of the annual operational risk analysis) for submission to the CEO and BoD

      • Ongoing identification of risks, proposals for the definition of measures and reporting of significant changes in the risk environment

      • Ensuring that all employees are also asked about new or worsened risks in connection with the annual employee interview

    • Definition and monitoring of risk-mitigating measures:

      • Preparation of the definition of risk-mitigating measures for submission to the CEO and BoD (as part of the individual risk assessments)

      • Coordination with the respective risk owners and, if necessary, coaching of the risk owners

      • Monitoring the implementation of the risk-mitigating measures by the risk owners

    • Creating appropriate reports for the submission to CEO and BoD

      • Quarterly reporting to the CEO on the development of key risks and the status of risk-mitigating measures (risk radar as part of the quarterly reporting)

      • Annual report on Risk Management to the BoD

    • Coordination of the risk management function with the measures of the ICS

    • Preparation of annual insurance overview

    • Advice to the CEO regarding relevant risk management issues

  5. 5.

    Special Tasks

    After consultation with the BoD the incumbent may be given special additional tasks, particularly in relation to specific projects.

                     **********

    Zürich, ........................

    The incumbent:           For the sample company

    _______________________     ___________________________

    XXX              XXX

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Wittmer, A. (2014). Costs and Benefits of Risk Management. In: Müller, R., Wittmer, A., Drax, C. (eds) Aviation Risk and Safety Management. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-319-02780-7_6

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