📈
BL11 - Introduction to Risk
Management (1)
Created @October 30, 2025 12:15 PM
Class Stuvia Copies
Files & Block 11 - Class slides.pdf Risk practitioners guide.pdf Risk
media management framework.pdf
Block 11: Introduction to Risk Management
💡 Learning Objectives
1. Understand risk and risk management
2. Establish the role of risk management in strategy performance
3. Discuss Enterprise Risk Management (ERM)
4. Discuss the COSO (2004) framework and the COSO (2017) ERM
components
5. Explain the ISO 31000 risk management framework
6. Discuss ISO 31000 Risk Management Principles
7. Discuss ISO 31000 Risk Management Process
8. Apply risk management actions in a practical scenario
Decision-Making and Risk
BL11 - Introduction to Risk Management (1) 1
, Decision-Making - A complex process of choosing to act (or not act) deliberately
to pursue organizational goals.
Conditions for Decision-Making
Condition Description Example
Decision under Information is sufficient to predict Choosing a supplier with
Certainty results accurately. fixed prices.
Outcomes are uncertain, but Launching a new product
Decision under Risk
probabilities can be estimated. with market data.
Decision under Insufficient information to assign Entering a completely new
Uncertainty probabilities. market.
Business Decision Categories (McKinsey, 2023)
1. Big-Bet Decisions – Infrequent, high-risk, strategic (e.g., acquisitions).
2. Cross-Cutting Decisions – Frequent, collaborative, high-risk (e.g., pricing).
3. Delegated Decisions – Frequent, low-risk (e.g., day-to-day operations).
Understanding Risk
Definition of Risk
ISO 31000: “The effect of uncertainty on objectives.”
Business Dictionary: “A probability or threat of damage, loss, or other negative
outcome caused by vulnerabilities.”
Traditional vs. Contemporary Perspectives
Traditional View Contemporary View
Focuses on loss and harm Considers both positive and negative outcomes
Risk = Something to avoid Risk = Something to manage and leverage
Role of Risk Management in Strategy Performance
BL11 - Introduction to Risk Management (1) 2
BL11 - Introduction to Risk
Management (1)
Created @October 30, 2025 12:15 PM
Class Stuvia Copies
Files & Block 11 - Class slides.pdf Risk practitioners guide.pdf Risk
media management framework.pdf
Block 11: Introduction to Risk Management
💡 Learning Objectives
1. Understand risk and risk management
2. Establish the role of risk management in strategy performance
3. Discuss Enterprise Risk Management (ERM)
4. Discuss the COSO (2004) framework and the COSO (2017) ERM
components
5. Explain the ISO 31000 risk management framework
6. Discuss ISO 31000 Risk Management Principles
7. Discuss ISO 31000 Risk Management Process
8. Apply risk management actions in a practical scenario
Decision-Making and Risk
BL11 - Introduction to Risk Management (1) 1
, Decision-Making - A complex process of choosing to act (or not act) deliberately
to pursue organizational goals.
Conditions for Decision-Making
Condition Description Example
Decision under Information is sufficient to predict Choosing a supplier with
Certainty results accurately. fixed prices.
Outcomes are uncertain, but Launching a new product
Decision under Risk
probabilities can be estimated. with market data.
Decision under Insufficient information to assign Entering a completely new
Uncertainty probabilities. market.
Business Decision Categories (McKinsey, 2023)
1. Big-Bet Decisions – Infrequent, high-risk, strategic (e.g., acquisitions).
2. Cross-Cutting Decisions – Frequent, collaborative, high-risk (e.g., pricing).
3. Delegated Decisions – Frequent, low-risk (e.g., day-to-day operations).
Understanding Risk
Definition of Risk
ISO 31000: “The effect of uncertainty on objectives.”
Business Dictionary: “A probability or threat of damage, loss, or other negative
outcome caused by vulnerabilities.”
Traditional vs. Contemporary Perspectives
Traditional View Contemporary View
Focuses on loss and harm Considers both positive and negative outcomes
Risk = Something to avoid Risk = Something to manage and leverage
Role of Risk Management in Strategy Performance
BL11 - Introduction to Risk Management (1) 2
