Presention

Topic: Risk
1. Introduction to Risk
(Let me start with a simple but important question: What is risk?)
In simple terms, risk is the possibility that something negative or harmful might happen.
It means that there is some level of uncertainty about the future. We may hope for a good
outcome, but there is always a chance that things won’t go as planned.
Risk is something we all deal with in everyday life. For example, when we drive in heavy
rain, we face a higher chance of accidents. Similarly, crossing the street without looking
carefully also involves risk. These are personal examples, but risk is also a big part of the
business world.
In business, making any decision—like launching a new product or expanding into a new
market—includes risk. A company might lose money, face customer complaints, or even
damage its brand. That’s why it is so important to understand and manage risk properly. It
helps us prepare for unexpected situations and make smarter decisions.
2. Types of Risk
There are many kinds of risks, but today I will focus on four main types that often appear
in business situations. Each of them can affect a company in different ways, and it’s
important to learn how to manage them effectively.
a. Financial Risk
Financial risk is the chance of losing money or earning less profit than expected. It often
happens when a business invests in something new.
For example, if a company spends a lot of money on a new product but it doesn’t sell
well, they may not make enough money to cover the cost and could lose their investment.
Financial risk can also come from economic changes, like rising material costs or higher
interest rates, which can reduce profits.
To manage this risk, businesses should plan their budget carefully, invest wisely, and
follow market trends to protect their finances.
b. Operational Risk
Operational risk is the risk of loss from problems in a company’s daily activities. It can
come from human errors, system failures, or poor organization.
For example, if a machine in a food factory breaks down, production may stop and
deliveries could be delayed. Or, if an employee enters wrong data, it might affect orders
or payments.
Lack of communication or poor staff training can also increase this risk.
To reduce operational risk, companies should improve their systems, train staff well, and
check equipment regularly. This helps them keep operations smooth and efficient.
c. Strategic Risk
Strategic risk happens when a company makes big decisions that don’t match its long-
term goals. These include entering new markets or changing the business model.
For example, if a clothing company expands to another country without enough research,
it may fail to attract customers and cost a lot of money.
This type of risk often comes from poor planning or not understanding the market well.
To manage strategic risk, businesses should study trends, analyze competitors, and review
their goals. They should also test ideas on a small scale and get expert advice before
making major changes.
d. Reputational Risk
Reputational risk is the risk of losing public trust or damaging a company’s image. In
today’s online world, even small mistakes can spread fast and hurt a brand.
For example, poor customer service or a viral video of a bad product can lead to lost
customers and lower sales. Negative reviews or unethical behavior also increase this risk.
A good reputation takes years to build, but can be lost in minutes.
To reduce reputational risk, companies should treat customers well, respond to feedback
quickly, communicate honestly, and having a good communication team, this also helps
business protect the brand.
2. Risk Management Process
a. Identify
The first step in the risk management process is to identify the risks a business might face
in its working environment. These risks can be legal, environmental, market-related,
regulatory, or from other areas. It is very important to identify as many risks as possible.
In companies using manual systems, risks are written down by hand, while organizations
using risk management software enter risks directly into the system. This makes the
information quickly accessible and transparent for all stakeholders, unlike traditional
reports which require email requests to access.
b. Analyze
Once the risks are identified, they need to be analyzed to understand how they might
affect the business. This includes checking which departments are affected and how
serious the consequences could be. In manual systems, this is done by people and may
take time. With software, risks are linked to documents, policies, and processes, allowing
the system to assess the impact more accurately and efficiently.
c. Evaluate
Next, the business must evaluate and prioritize the risks based on how serious they are.
This helps them understand the overall level of risk. Low-level risks may not need top
management’s attention, while high-level risks may need to be dealt with immediately.
There are two types of risk evaluation:
 Qualitative risk assessment: Used when the risk is hard to measure with numbers,
like climate change. This method uses standard procedures to ensure consistency
across the company.
 Quantitative risk assessment: Often used in finance, where risks can be measured
with data and numbers. It is more objective and easier to automate.
d. Treat
Each risk should be reduced or controlled as much as possible, often by working with
experts in the field. In manual systems, this process can be disorganized, with
communication spread across emails, documents, and phone calls. But with risk
management software, all stakeholders can collaborate in one place, where they can share
updates, discuss solutions, and track progress. This allows management to monitor
everything easily and make better decisions.
e. Monitor
Some risks, such as market or environmental risks, cannot be removed completely and
need to be monitored continuously. In manual systems, this depends on employees to
watch for changes. However, risk management software can monitor risks in real time.
Any updates or changes can be seen immediately by everyone involved, helping the
business stay on track and avoid long-term problems.
4. Risk Assessment Tools
Risk assessment tools are methods or systems used to identify, analyze, evaluate, and
monitor risks in a business or project. These tools help organizations understand
potential problems and make better decisions to reduce or avoid risk.
Here are some common risk assessment tools:
 - Risk Matrix: A risk matrix is a visual representation of risks laid out in a diagram or a
table, hence its alternate name as a risk diagram. Here, risks are divided and sorted based
on their probability of happening and their effects or impact. A risk matrix is often used to
help prioritize which risk to address first, what safety measures and risk mitigation plans
to take, and how a certain task should be done. Risk matrices can come in any size and
number of columns and rows, depending on the project and risks being discussed.

- SWOT Analysis: SWOT stands for 4 configuration components: Strengths

(Strengths), Weaknesses (Weaknesses), Opportunities (Opportunities) and Threats
(Challenges) is a model commonly used in analyzing the business plan of a functional
organization, enterprise.
• Strengths (Strengths): are the outstanding, separate, and unique factors of the
enterprise compared to its competitors
For example: exclusive products, exclusive products, famous brands, modern technology,
exclusive products...
• Weaknesses: are factors that prevent the enterprise from operating in the most optimal
way. These are the points that businesses need to address and reform quickly to maintain
competitiveness in the market such as: higher prices than competitors, small brands, no
reputation in the market, defective products, etc.
• Opportunities (Opportunities): are factors that have a favorable and positive impact
on the external environment, giving businesses the opportunity to develop and build
competitive strategies in the market.
For example: Potential for economic development or sales on social networks such as
Tiktok, increasing customer demand, etc.
• Challenges (Threats): refer to current and future factors that can negatively impact
businesses. Essence such as increased raw materials, taking advantage of strong and
widespread competition, constantly changing customer shopping trends, etc.
 - Scenario Analysis: is a strategic planning method used to evaluate potential future
outcomes by modeling "what-if" situations. It helps decision-makers assess how changes
in factors such as economic conditions, market performance, or policy shifts might affect
plans or strategies
Scenario analysis involves building, testing, and evaluating specific scenarios that can
affect a company's cash flow and operations. Businesses mostly use this analysis in
financial modeling to estimate how favorable and unfavorable events can affect an
organization's cash flow. Managers use this method to determine the best-case and worst-
case scenarios and the strategies they can use to minimize losses and maximize profits
For instance, in financial forecasting, scenario analysis helps assess business and
industry risks by exploring key risk factors and forecasting models
 Risk Checklists: Risk checklists are simple but effective tools that help teams identify
and manage common risks in a clear and organized way. They are usually based on
past experience, industry standards, or expert advice. A checklist contains a list of
potential risks or issues that might happen during a project or activity.
Using a checklist helps ensure that important risk areas are not forgotten, especially
during routine tasks or in smaller projects where detailed planning may not be done.
Teams can tick off each item as they check it, making it easy to follow and track
progress.
5. How to Mitigate Risks?
 Several solutions:
- Risk Avoidance:
Risk avoidance is a method used in risk management where a business decides not to take
part in an activity that could lead to a risk. Instead of trying to manage or reduce the risk,
the company completely avoids the situation, so there is no chance of being affected by
that risk. This is one of the most effective ways to protect the business from possible
harm, especially when the risk is high and hard to control.
 Use:
Risk avoidance is often used when the cost of the risk is too high, or when the
chances of something going wrong are very strong. It is a way for companies to
 protect their assets, reputation, and people. However, avoiding risks can also mean
losing chances to grow or succeed, because some risks come with potential
rewards.
 Example:
Imagine a company that makes electronics and is thinking about expanding its
sales into a new country. However, that country has unstable politics, frequent
protests, and changing import laws. The company studies the situation and decides
that the risk is too high. So, they choose not to enter that market. By doing this, the
company avoids possible problems, such as losing money, having shipments
delayed, or facing legal issues.
While this decision helps the company stay safe, it also means they miss the chance to
reach new customers and grow their business in that region. This is the trade-off with risk
avoidance: you avoid danger, but you also avoid opportunity.

-Risk Reduce:
Risk reduction is a strategy used in risk management to lower the chances of risks
happening and to lessen the impact if they do occur. Unlike risk avoidance, which means
not doing the risky activity at all, risk reduction means taking steps to make the risk
smaller and more manageable. This approach often includes prevention methods, control
systems, and safety procedures to protect the business.
 Use:
Risk reduction is useful when it is not possible or realistic to avoid the risk
completely. Instead, businesses work to limit the risk through planning and action.
This helps reduce possible losses and keeps the business running smoothly, even
when problems happen.
 Example:
A business can use advanced monitoring systems to track its operations in real time. For
example, a manufacturing company might install sensors to watch for early signs of
equipment failure. When the system finds a problem, the company can take action
quickly, such as stopping the machine or fixing it before it breaks down.
This kind of early response helps to reduce the impact of the problem and avoid costly
downtime. It does not remove the risk completely, but it makes the situation easier to
handle and protects the company from bigger losses.
- Risk Transfer:
Risk transfer is a risk management strategy where a business passes some or all of the
risk to another party, usually through a contract, partnership, or insurance policy. Instead
of handling the full consequences of a risk by itself, the business shares the responsibility
with someone else. This helps to protect the business from serious financial losses if
something goes wrong.
 Use:
Risk transfer is especially helpful when the risk involves high costs, like property
damage, accidents, or lawsuits. Businesses use this method to reduce their
financial burden and make sure they can continue operating even after unexpected
events. It's also useful for managing risks that are hard to prevent or control.
 Example:
The most common example of risk transfer is buying insurance. For example, a
delivery company buys vehicle insurance for its trucks. If a truck has an accident,
the insurance company covers the repair costs, not the business.
In this case, the business still experiences the event (the accident), but the financial
impact is transferred to the insurer. This helps the company avoid major losses and
recover more quickly.
Another example is when a company outsources part of its operations to another
company. If the risk is related to that activity, it becomes the responsibility of the third
party, not the original business.

- Risk sharing: Risk sharing is a method by which a business shares risks with other
stakeholders, usually through partnerships, joint ventures or insurance contracts. In this
way, the business does not have to bear the entire risk alone but can reduce the impact of
the risk by sharing it with partners.
Risk sharing offers many benefits to businesses, including minimizing financial impact,
increasing resilience, and improving collaboration with partners.
For example, in a large construction project, a construction company may form a joint
venture with another company to share financial, resource and technical risks. If any
problems arise, the parties involved will share the responsibility and costs, reducing the
burden on each party.
Kết luận: Effective risk management is key to ensuring the success and sustainability of
any organization. By identifying potential threats and implementing appropriate strategies
such as avoiding, reducing, transferring or accepting risks, businesses can make informed
decisions and protect their resources. Proactive risk management not only minimizes
negative impacts but also opens up opportunities for innovation, growth and long-term
resilience.
6. Conclude
Effective risk management is essential for the long-term success and stability of any
organization. By understanding the different types of risks—such as financial,
operational, strategic, compliance, and reputational—businesses can better prepare for
unexpected challenges. Through a structured risk management process that includes
identifying, analyzing, evaluating, treating, and monitoring risks, companies can
minimize potential losses and respond more effectively when issues arise.
Using tools like risk matrices, SWOT analysis, scenario planning, and checklists helps
organizations assess risks more clearly and make informed decisions. Additionally,
applying strategies such as risk avoidance, reduction, transfer, and sharing allows
businesses to manage uncertainty in ways that suit their goals and resources.
In today’s fast-changing environment, proactive risk management not only helps protect a
company’s assets and reputation but also creates space for innovation, growth, and long-
term resilience. By turning potential threats into opportunities for improvement,
businesses can stay competitive and thrive in an increasingly complex world.