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Managing Operational Risk

Author

Listed:
  • Stanciu Victoria

    () (Academy of Economic Studies, Bucharest)

  • Ali Eden

    (Academy of Economic Studies, Bucharest)

  • Ivancenco Veronica Constanta

    () (Academy of Economic Studies, Bucharest)

Abstract

Managing risks become a very challenging task for any organization and one of its priorities. The rising complexity of modern business processes, the globalization and the IT business perspective determined important changes in making business approach bringing opportunities but also increasing risks. Recent years have emphasized concern and focus on risk, and it became increasingly clear that a need exists for a robust framework to effectively identify, assess, and manage risk. COSO response to this need was materialized in its Enterprise Risk Management – Integrated Framework providing key principles and concepts, a clear direction and guidance in managing risks. The financial and economic crisis showed the importance of a strong risk management process and the need of important changes in order to improve the risk management process in each organization. Romanian companies were strongly affected by the crisis. One of the most important reasons is the ineffective risk management system in the company. Operational risk is complex and its impact on companies’ activity and financial results is high. Its complexity makes more difficult the effort to define dedicated models for its measurement. Modeling and better managing the operational risk is one of the priorities in all big organizations. The present paper focuses on the main issues on operational risk management implementation and presents the authors’ research results regarding operational risk management as an important part of the risk management process.

Suggested Citation

  • Stanciu Victoria & Ali Eden & Ivancenco Veronica Constanta, 2010. "Managing Operational Risk," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 802-806, May.
  • Handle: RePEc:ovi:oviste:v:10:y:2010:i:1:p:802-806
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    More about this item

    Keywords

    risk management; operational risk; financial and economic crisis;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G01 - Financial Economics - - General - - - Financial Crises
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • M19 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Other

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