1. Model Risko - Andersen

2. Model Risko - Andersen Sources of Uncertainty Environment Risk
Uncertainties Affecting the Viability of Our Business Model
Environment Risk
Sources of Uncertainty
Uncertainties Affecting the Execution of Our Business Model
Process Risk
There are three components of business risk that provide a broad foundation from which more specific categories of risk can be identified and detailed. These components are depicted here.
[Talk through visual.]
There are specific risk categories that apply to each component.
Uncertainties Over the Relevance and Reliability of Information That Support Our Value Creation Decisions
Information For
Decision Making Risk

3. Model Risko - Andersen
“Environment risk” arises when there are external forces that can affect a firm’s performance, or make its choices regarding its strategies, operations, customer and supplier relationships, organizational structure or financing obsolete or ineffective.
These forces include the actions of competitors and regulators, shifts in market prices, technological innovation, changes in industry fundamentals, the availability of capital or other factors outside the company’s direct ability to control.
Source: Enterprise-wide Risk Management: Strategies for linking risk and opportunity

4. Model Risko - Andersen
“Process risk” arises when business processes do not achieve the objectives they were designed to achieve in supporting the firm’s business model. For example, characteristics of poorly performing processes, or process risks, include:
Poor alignment with enterprise-wide business objectives and strategies,
Ineffectiveness in satisfying customers,
Inefficient operations,
Dilution of (instead of creating or preserving) value and
Failure to protect significant financial, physical, customer, employee/supplier, knowledge and information assets from unacceptable losses, risk-taking, misappropriation or misuse.
There are five groups of process risks that you see on the slide. Each includes various risk categories.
Source: Enterprise-wide Risk Management: Strategies for linking risk and opportunity

5. Model Risko - Andersen
“Information for decision-making risk” arises when information used to support business decisions is incomplete, out of date, inaccurate, late or simply irrelevant to the decision-making process. Our research with the Economist Intelligence Unit in 1995, as updated by the New Dimensions on Business Risk project in the summer of 1998, indicates that a significant majority of companies (at least four out of every five) believe that their decision-support systems are far from optimal.
There are three groups of information for decision making risks.
Source: Enterprise-wide Risk Management: Strategies for linking risk and opportunity