What Is Commercial Risk Management?

Commercial risk management refers to the study of complex and diverse business risks. It requires risk subjects to establish risk awareness, formulate risk countermeasures, and obtain satisfactory risk returns and minimize risk losses with minimal management costs. The essence is to improve the competitiveness, resilience and self-development ability of risk subjects, so that they can survive and develop in the fierce competition and changing market operating environment.

Business risk management

Right!

Commercial risk management refers to the study of complex and diverse business risks. It requires risk subjects to establish risk awareness, formulate risk countermeasures, and obtain satisfactory risk returns and minimize risk losses with minimal management costs. The essence is to improve the competitiveness, resilience and self-development ability of risk subjects, so that they can survive and develop in the fierce competition and changing market operating environment.

Chinese name

Business risk management

Object

Business risk

Corresponding

Building risk awareness

Nature

Risk countermeasures

Commercial risk management refers to the study of complex and diverse business risks. It requires risk subjects to establish risk awareness, formulate risk countermeasures, and obtain satisfactory risk returns and minimize risk losses with minimal management costs. The essence is to improve the competitiveness, resilience and self-development ability of risk subjects, so that they can survive and develop in the fierce competition and changing market operating environment.

1. Establish a sense of risk. This is a prerequisite for strengthening risk management. Although risk is something invisible and intangible, it is objective. Therefore, as a business operator, we must not only establish a sense of risk, but also communicate it to all employees of the enterprise, educate them about risks, and let them know the possible effects of risks on the enterprise and its impact on the interests of the company and itself. . At present, most commercial enterprises in China, like other enterprises, have not paid attention to this aspect. There are many reasons for this situation.

One is affected by the traditional system. Under the traditional system, Chinese enterprises are only the executors of the national plan, and they have almost no business autonomy. Most of the country's "one book", the main body of business activities, is "risk-free operation." More precisely, it is the state that has become more and more entrenched and has taken risks that should be borne by enterprises. As a result, there are serious adverse consequences such as low market efficiency, heavy national burdens, and large financial subsidies. At the same time, corporate risk awareness is extremely weakened, so that in the current fiercely competitive domestic and international environment, many companies have not noticed the impact of risk on corporate survival and development.

Secondly, due to the unclear relationship between production and rights, and the inconsistency of responsibilities, rights, and benefits, the reform of enterprises in the economic system has always been the focus and difficulty of economic system reform. To establish a sense of risk, we must continue to deepen the reform of the traditional system, especially deepen the reform of the corporate property rights system, and establish a behavioral mechanism that combines the responsibility, power, and profit bound by the risk mechanism. In essence, it requires companies to accelerate the modern enterprise. The establishment of the system.

2. The business risks caused by changes in the market environment are mainly solved by market evaluation. Because the business risks caused by changes in the market operating environment are mainly speculative or dynamic risks, and they are also the main part of business risks, it is necessary to focus on management and control. The main management method is market evaluation.

The first is market risk investigation. It refers to first collecting data on population changes, economic development, natural environment requirements, technological innovations, governance laws and management documents, social and cultural changes, and past records; then predicting future social and economic development trends, and surveying data Carry out sorting and analysis; according to the current purchase and sales activities of the enterprise, look for possible risk processes and links in order to take corresponding strategies.

The second is market risk assessment. This refers to a quantitative description of the risks analyzed and analyzed. The probability of occurrence of a risk event and the degree of gain or loss caused by the event should be mainly clarified. There are many assessment methods. In actual work, the methods of mathematical statistics and empirical estimation are mainly used to test the possibility, occurrence period and degree of risk in order to formulate risk management strategies.

2. The purely commercial risks caused by the damage and loss of commodities mainly rely on improving storage facilities, implementing scientific management and strengthening security to manage and control commercial risks.

3. For pure commercial risks (or static commercial risks) caused by natural disasters and accidents such as fire, wind, flood, earthquake war, transportation accidents, etc., mainly rely on insurance methods to manage and control to prevent causes during business Incurring losses at this risk. The specific risks to be invested depend on the specific operating conditions. But basically or mainly it is property insurance.

4. Risks caused by improper transactions, untrustworthy behaviors, patent infringements, etc. can be managed and avoided mainly through asset, credit investigation and evaluation methods, prudent transaction attitudes, and full use of legal means. At the same time, you can make some preventive clauses: the other party can sue the industrial and commercial administration for breach of contract.

5. For commercial risks caused by price fluctuations and exchange rate fluctuations, risks can be passed on by signing forward contracts or using futures hedging transactions.