The role of risk management in increasing business performance

Abstract

The study aims at clarifying the role of risk management in improving business performance. In this study a literature review has been employed in order to understand the subject matters in managing business risks to increase company performance. The literature reviewed shows that risk management does contribute to the improvement of the business performance, measured as increase of company profits, decrease of business costs and, in turns, increase in economic proficiency. Therefore, the risk management impacts, in a positive way, the quality of a business that is embodied in improving the financial status of the company, increasing the profits, as well as decreasing the costs. Some recommendations are made for decision makers in the insurance business sector, who are required to be fully aware of the influence that risk management has on helping their business flourish. This is advisable through decreasing the cost of production, increasing profits, and improving financial business situation in their companies. Also, company decision makers are required to work continuously to develop risk management to increase profits, reduce costs, and improve the financial situation, and thus improve business performance.

Managing the Resilience of Territories, Business and Tourism in the Context of Urbanization of Socio-Economic Processes

“…Управління бізнесом завжди супроводжується врахуванням фінансових аспектів та застосуванням інноваційних інструментів серед яких стратегічне планування, аутсорсинг, бенчмаркінг, управління бізнес-процесами на засадах лідерства підприємця, бюджетом та ланцюгами постачання, збалансована система показників (Valinkevych, & Orlova, 2019, p. 128;Usman, Hartani, & Sroka, 2020, p. 417;Mc Loughlin, Lewis, Lascelles, & Nudurupati, 2021). Окрім цього важливо враховувати та вміти обґрунтувати вплив ризиків на бізнес та управляти ними, зокрема через створення належного рівня організаційної культури (Visser, & van Scheers, 2018, p. 133;Makkawi, 2021Makkawi, , p. 1057Klucka, & Grunbichler, 2020, p. 57;Osuszek, & Ledzianowski, 2020, p. 415;Polinkevych et al, 2021, p. 108-109) зосереджувати увагу на гнучке управління та соціальну складову бізнес-процесів (Vugec, Tomicic-Pupek, & Vuksic, 2018;Aysolmaz et al, 2018, p. 678). Управління сталим розвитком територій має базуватися на співпраці органів місцевого самоврядування з бізнесом (Yakobchuk et al, 2021, p. 108;Ovdiyuk et al, 2021, p. 118) та бути зосереджене на екологізації.…”

Sustainable Cities and Communities from Malaysian Local Authorities Perspectives

“…Risk management allows the business to predict the uncertainty inherited throughout the operation [22]. In addition, it can improve the return on equity and business efficiency by mitigating the potential risk that can impact the project and the overall organisational performance [23][24][25][26][27]. Past literature documents the importance of risk management practices in Malaysian local authorities especially in dealing with the issue of natural disasters.…”