czwartek, 14 września 2023

#managementcontrol@Risk

The essential task of management control is to secure relevant information concerning results at risk. Proper perception of risk requires not only treating risk as a negative factor that may worsen the planned economic results, but also as an opportunity. Hence, it is important to manage the relation of potential profits generated as a result of risk-taking to the costs of capital involved. Risk creates opportunity to work out additional profits, which are a reward for risk exposure. An alternative to potential profits is the possibility of incurring a loss as a result of unfavorable for the company environment developments, or faulty internal processes. Hence, the proper risk analysis becomes crucial for the preparation of right managerial information in order to eliminate intuition from risk-taking, which is the reason of many errors and losses. Decisions based on intuition and the assumption of linear phenomena usually contribute to the results significantly different from the plans. Intuition that is not supported by appropriate regulations and risk analyses does not mean the reliable support. Management control task should care that economic profit becomes the result of planned activities and not randomness. Managers should be aware of the importance of risk controlling for the proper management in the enterprise and appropriate risk-taking objectives should be included in the performance evaluation.

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