WEEK 4 CASE STUDY

What do you understand about the good concept and tools for risk management? How to manage risk as an entrepreneur?

Ferdinand Taslim (TP072735)

Taking care of risks is very important when we make decisions in entrepeneurship. It means looking at what could go wrong, figuring out how bad it could be if it happens, and then doing things to stop or lessen those bad things from happening. This is called risk management. Risk management is an activity within project management that is gaining importance due to current business environment with a global focus and competition (Ahmed & Amornsawadwatana, 2007).

Risk management is not just about dealing with problems as they happen, but about being smart and ready before they even show up. When we manage risks well, it helps us make better choices and makes us ready for unexpected stuff. It also makes us more responsible and helps us come up with new ideas.

Managing risks is not just about following a plan; it's about having the right attitude. It's about thinking ahead, being strong when things get tough, and finding ways to move forward even when it's hard. That's why taking care of risks is super important.

Jovan Richaldy Chandra (TP071536)

Risk is an essential part of business because firms cannot operate without taking risks. Risk is commonly associated with uncertainty, as the event may or may not occur (Fadun, 2013). Risk management is one of the most important aspects when people want to be a successful entrepreneur in their life. Without risking something, people will not know about what is fail, trial and error, and a sense of success. There are some tools that individuals can learn about risk management. First, humans must identify the risk such as recognizing potential threats to the business-like financial losses, market changes, etc. If people already know what type of risk they will face, they should do the technique namely “risk avoidance”. Some risks can be avoided, for instance, if a particular business seems too risky, they might choose not to pursue it. They could also take steps to lessen the likelihood of risks. For example, they would take safety measures, creating backup plans, etc. People can also transfer their risk into third parties like buying insurance to cover potential losses. Some tools that they can use such as Risk registers, SWOT analysis (Strengths, Weaknesses, Opportunities, and threats), scenario planning, risk assessment matrix, and insurance. As an entrepreneur, managing risk is essential for long-term success. It's all about being prepared, adaptable, and making perfect decisions into a successful life.

Rafael John (TP072612)

According to the definition of entrepreneurship and everyday observation, entrepreneurs are perceived as more risk prone than other people (Macko & Tyszka, 2009). As entrepreneurs, it's vital to understand that risks are a natural part of running a business. We start by keeping a keen eye on what could potentially go wrong, both inside and outside our business – things like market changes, financial hiccups, or unexpected regulations. Then, we assess how likely these risks are and how much they could impact us. Once we've got a handle on that, we come up with ways to lessen the impact, like having backup plans, forming partnerships, or even just having a stash of savings for emergencies. But it doesn't stop there. We need to keep checking the horizon, watching for new risks or changes in the ones we've identified. It's an ongoing process, like adjusting the sails to catch the wind just right. By staying proactive and adaptable, we can steer our ship through rough waters and toward smoother sailing ahead. As entrepreneurs, we must also remember that facing risks is about learning and growing, turning challenges into opportunities along the journey.

Marcello Irawan (TP072752)

The concept of risk and risk assessments has a long history. More than 2400 years ago the Athenians offered their capacity of assessing risk before making decisions (Bernstein, 1996). Entrepreneurs use different tools to handle risks in business. One is like a big chart where we write down all the things that could go wrong and how bad they might be. It helps us figure out which problems we should worry about most. Then there's another tool where we imagine different stories about the future, thinking about what might happen and how we can get ready for it. We also keep a list of all the risks we've thought about and what we plan to do about them, kind of like a to-do list but for risks. Sometimes, we get help from experts who know a lot about money stuff, and they can protect us from financial risks. And nowadays, there's also computer programs that help us keep track of all our risks and remind us to check on them regularly. With these tools, we can steer our business through rough waters and keep it sailing smoothly toward success.

Stanislaus Raymond Soecoko (TP077043)

Risk and risk behavior form an important segment of the entrepreneurship literature. Entrepreneurial risk behavior has been studied with both trait and cognitive approaches, but the findings do not adequately explain either how entrepreneurs differ from non-entrepreneurs, or how different types of entrepreneurs can be specified in terms of their risk behavior (Das & Teng, 1998). Entrepreneurs really need to manage risks well to keep their businesses safe from possible problems and uncertainties. When they can spot and handle risks early, it helps prevent big problems later on. Good risk management helps them make smarter decisions, use their money wisely, and feel more confident about taking opportunities. It also makes their business stronger and able to deal with unexpected events. Plus, managing risks well can save money by stopping big problems before they happen. When entrepreneurs show they're good at managing risks, it makes people like investors and customers trust them more. Overall, risk management is like a shield that helps entrepreneurs steer their businesses safely through all kinds of challenges, making it more likely they'll succeed in the long run.

Daniel Kurniadi Khodyat (TP073665)

Startegic Risk management is very important for entrepreneurs. The reason why the risk management function is called ‘Strategic’ is that the purpose should really be top-level coverage (Mikes, 2009). One of the best ways for entrepreneurs to manage risks is by diversifying. This means not putting all their eggs in one basket. Instead, they spread their investments across different areas. For example, they might offer various products or serve different types of customers. By doing this, if one part of their business faces problems, the others can still do well and help balance things out. It's like having a backup plan in case something goes wrong. Entrepreneurs can also diversify their money by keeping some cash, investing some, and having access to credit if they need it. However, they need to be careful not to spread themselves too thin. It's important to keep an eye on everything and make sure their diversification strategy still makes sense for their business. Overall, diversification is a smart way for entrepreneurs to protect themselves from risks and make their business stronger in the long run.

References:

    

        Ahmed, A., Kayis, B., & Amornsawadwatana, S. (2007). A review of techniques for risk management in projects. Benchmarking: an international journal, 14(1), 22-36.

        Fadun, O. S. (2013). Risk management and risk management failure: Lessons for business enterprises. International Journal of Academic Research in Business and Social Sciences, 3(2), 225-239

        Macko, A., & Tyszka, T. (2009). Entrepreneurship and risk taking. Applied psychology, 58(3), 469-487.

        Bernstein, P. L., & Bernstein, P. L. (1996). Against the gods: The remarkable story of risk (p. 400). New York: Wiley. 

       Das, T. K., & Teng, B. S. (1998). Time and entrepreneurial risk behavior. Entrepreneurship theory and practice, 22(2), 69-88.

        Mikes, A. (2009). Risk management and calculative cultures. Management accounting research, 20(1), 18-40.