Russian Industrial Enterprises under the Conditions of

Uncertainty and Risk: Empirical Investigation in 2005-2007

Roman M. KachalovCentral Economics and Mathematics Institute

RAS

THE FUTURE OF EUROPE IN A WORLD OF UNCERTAINTIES

39th CMTEA - Romania, Iaşi, September 25-27th, 2008

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Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007

The source of a risk is uncertainty.

The economic risk is a characteristic of purposeful activities in the conditions of uncertainty.

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Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007

Definition:Economic risk is a specific general

economic category which, taken in its entirety, reflects «the measure of reality of an undesirable deviation» from the purpose of the economic activities and the size of losses caused by such a deviation.

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Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007

Risk management standards:

A Risk Management Standard (2002) – FERMA;

Enterprise Risk Management (ERM) - Integrated Framework (2004) – COSO, Treadway Commission;

Australian/New Zealand Risk Management standard (AS/NZS 4360, 2004);

ISO/IEC Guide 73 Risk Management – Vocabulary – Guidelines for use in standards.

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Russian Industrial Enterprises under Conditions of

Uncertainty and Risk: Empirical Investigation in 2005-2007

Our investigation based on: the methodology of system-integration theory

of enterprise (Georgy Kleyner), the operational approach to risk analysis.

These concepts is developed in The Central Economics and Mathematics Institute of the Russian Academy of Sciences

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Russian Industrial Enterprises under Conditions of Uncertainty

and Risk: Empirical Investigation in 2005-2007

The questionnaire includes 24 questions in four sections: «Estimation by respondents of the current risk

level», «Estimation of the level of organizational and

methodological support of works on risk analysis at the responding enterprise»,

«Estimation of importance of works on risk analysis and risk management for the responding enterprise» and

«General information about the responding enterprise».

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Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007

Distribution respondents in according to their risk level

65,3

16,2

74,2

10,0

78,4

7,2

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

До

ли

в в

ыб

ор

ке, %

2005 г. 2006 г. 2007 г.

Рис. 1. Распределение предприятий по степени риска их хозяйственной деятельности

Затрудняюсь ответить

Все хозяйственные решения нашего предприятиярискованные

Некоторые хозяйственные решения связаны сриском

Нет, не связана

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Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007

Managers attitude to risk management

0

10

20

30

40

50

60

70

80

До

ля

отв

ета

в в

ыб

ор

ке, %

2005 г. 2006 г. 2007 г.

Рис. 2. Отношение к внедрению функции управления риском

Функция УР отсутствует

Внедрение функции УР не планируется

Не видят необходимости управлять риском

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Russian Industrial Enterprises under Conditions of Uncertainty

and Risk: Empirical Investigation in 2005-2007 Why there is an negative attitude to risk

management?

Respondents see the main reason: Absence of traditions, Absence the special educations of domestic managers

(43,8 %, 60 % and 57,7 %), Absence or inaccessibility of distinct methodical

recommendations (on the average about 60 %). Inaccessibility of knowledge about positive results of

risk management at other enterprises. Not-economic methods of interaction prevail in Russia, Unwillingness of heads of the enterprises to go on

additional expenses and to make organizational efforts for introduction of risk management.

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Russian Industrial Enterprises under Conditions of Uncertainty

and Risk: Empirical Investigation in 2005-2007

Distribution by the degree of decrease of the importance:

RF in the sphere of realization of production,

RF in the supply sphere, RF due to errors of the personnel and

infringement of industrial discipline, and RF in the enterprise management

system.

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Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007

Methods of risk management

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007

Годы

Методы уклонения от риска

Методы локализации риска

Методы диссипации риска

Методы компенсации риска

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Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007

Main conclusions: The managers of the Russian enterprises is

understanding major problems of risk management and adequate perception by them of the conceptual instruments of the operational theory of economic risk management.

The institutional environment of risk management has not been formed so far in Russia.

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Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007

Main conclusions: For the three years, the attitude of Russian

managers to risk management has not undergone essential changes

The respondents seem to be more anxious about external risk factors in contrast to internal ones.

The enterprises set up a special division, work to specific schedule, make the one of top managers responsible for realization of the risk management function, etc.

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Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007

F I N

Thanks for your attention!