1. The Management Process Part two
Measurement, Monitoring and Controlling Risk
Risk in business involves:
 The possibility of loss
 A threat which may prevent or hinder the ability to
achieve business objectives
 The chance that a hoped for outcome will not occur

2. The Management Process Part two
Measuring Monitoring and controlling involves:
 Proactively planning for risks
 Identifying risks
 Analysing the risks
 Monitor the risks until they no longer exist
 Control risk outcomes

3. The Management Process Part two
To monitor and control risk
we need to develop the
following procedures:
 Risk response plans
 Tracking identified risks
 Monitoring residual risks
 Identifying new risks
This involves Inputs
 Risk register
 Risk management plan
 Performance reports

4. The Management Process Part two
Tools and Techniques
Outputs
 Risk audits, is the project working
 Risk register updates.
to identify the risks, and working
on plans to deal with risk
 Risk re-assessment, a periodic
review to consider any variance's
and trend analysis.
 Reserve analysis , does any
newly identified risk require
additional reserves.
 Status meetings
 Corrective action and preventive
action.
 Organisational process assets
updates, updating best practice
information on risk management

5. The Management Process Part two
Activities performed continuously by the process owner. In Step 1, the process owner defines the process
control objectives.
http://www.clir.org/pubs/reports/pub90/appendix1.html

6. The Management Process Part two
Risk management for different organisational departments,
source http://www.tutor2u.net/blog/index.php/business-studies/comments/revision-presentation-managing-risk

7. The Management Process Part two
Budgetary and Non-Budgetary Controls.
 A budget is an itemized summary of likely income and expenses for a
given period. It helps you determine whether you can grab that bite to
eat or should head home for a bowl of soup.
 It is typically created using a spreadsheet, and it provides a concrete,
organized, and easily understood breakdown of how much money you
have coming in and how much is going out of the account.
 It’s an invaluable tool to help you prioritize your spending and
manage your money—no matter how much or how little you have.
 Planning and monitoring your budget will help you identify wasteful
expenditures, adapt quickly as your financial situation changes,
and achieve your financial goals.

8. The Management Process Part two
Budgetary Control
 In business the actual results for are period of trading are
compared with the budgeted figures, if there are
differences then corrective action must be taken.
 This applies whether the difference is positive or
negative!
 This corrective action is what is meant by budgetary
control which has the following features.

9. The Management Process Part two
Features of Budgetary Control.
1. Responsibilities: Managerial responsibilities must be clearly defined.
2. Action Plan: Individual departmental budgets contain a detailed plan of
action for achieving their targets.
Adherence: Once budgets have been approved managers have a
responsibility to follow the set budget.
4. Monitoring: Actual performance is monitored continuously and compared
with budget targets.
5. Correction: Corrective action is taken if required.
6. Approval: Departures from the budget are only permitted if they have prior
3.
approval from senior management.
7.
Variances: Are subject to investigation

10. The Management Process Part two
Non Budgetary Control
Non-budgetary control involves controlling using non
budgeted expenses i.e. those expenses not defined in normal
budgeted expenses. The techniques for non-budgetary
control are:
 Statistical data Analysis.
 Breakeven analysis.
 Gantt charts. (Illustrate a project schedule and breakdown of work structure)
 PERT. ( ‘Performed Evaluation and Review Technique’. A statistical tool used in
project management designed to analyse and represent the tasks involved in completing
a given project.)

11. The Management Process Part two
Most organisations have several budgets for example, sales, production and
administration. These are then combined to form the Master Budget.

12. The Management Process Part two
Some important information
Planning Questions;
1. Where are we now?
2. Where are we going?
3. How will we get there?
4. How will we know that
we have arrived?

13. The Management Process Part two

14. The Management Process Part two
What is the purpose of business planning?
 Business planning is done to provide direction and
increase the probability for success within any business.
 There are some important sources of uncertainty which
include production risk, price risk, financial (or interest
rate) risk, and changes in government programs.
 The business planning process allows the planners to
develop objectives and goals for the business that should
keep things running smoothly and allow everyone to
know where the business is headed.

15. The Management Process Part two
 Business plans may be internally or externally focused.
Externally focused plans target goals that are important to
external stakeholders , particularly financial stakeholders.
 They typically have detailed information about the
organization or team attempting to reach the goals.
 Internally focused business plans target intermediate goals
required to reach the external goals. They may cover the
development of a new product, a new service, a new IT
system, a restructuring of finance, the refurbishing of a
factory or a restructuring of the organization. An internal
business plan is often developed in conjunction with a
balanced scorecard or a list of critical success factors.
 This allows success of the plan to be measured using nonfinancial measures.

16. The Management Process Part two