CC BY
752 East European Scientific Journal #6(70), 2021 ...av,...,..
УДК 339.378
ГРАНТИ 06.81
Trishkina E.B.
Student, faculty of Business and economics Financial university under the Government of the Russian Federation, Moscow
EVALUATION OF THE EFFICIENCY OF THE RISK MANAGEMENT SYSTEM AND THE PROSPECTS OF ITS DEVELOPMENT ON THE EXAMPLE OF LLC «VKUSVILL»
Тришкина Е.Б.
Студентка факультета Бизнеса и экономики Финансовый Университет при Правительстве Российской Федерации, Москва
ОЦЕНКА ЭФФЕКТИВНОСТИ СИСТЕМЫ УПРАВЛЕНИЯ РИСКАМИ И ПЕРСПЕКТИВ ЕЕ РАЗВИТИЯ НА ПРИМЕРЕ ООО «ВКУСВИЛЛ»
Abstract. Risk management is essential in the modern world. Any organization seeks to adapt to new conditions and the impact of third-party factors. Risk management is the process of preparing and implementing measures to reduce damage from a wrong decision of a decision maker; measures to reduce the negative impact on the goals of the organization. The purpose of the article is to assess the effectiveness of risk management system and the prospects for its development in the organization. To achieve this goal, I analyzed the activities of the organization Vkusvill LLC, assessed the effectiveness of risk management in the organization, and developed recommendations and practical measures aimed to improve the effectiveness of risk management at Vkusvill LLC. The research methods used were strategic analysis, expert evaluation methods, methods of financial and economic analysis.
Аннотация. Управление рисками необходимо в современном мире. Любая организация стремится адаптироваться к новым условиям и воздействиям сторонних факторов. Управление рисками представляет собой процесс подготовки и реализации мер по снижению ущерба от неверного решения лица, принимающего решения; мер по уменьшению влияния негативных последствий на цель организации. Целью статьи является оценка эффективности управления рисками организации и перспектив ее развития. Для достижения поставленной цели была проанализирована проанализировать деятельность организации ООО «Вкусвилл», оценена эффективность управления рисками в организации и разработаны рекомендации и практические мероприятия по совершенствованию эффективности управления рисками ООО «Вкусвилл». При написании статьи были использованы методы стратегического анализа, экспертные методы, методы финансово-экономического анализа.
Key words: risk, risk management, risk management system, organization.
Ключевые слова: риск, риск-менеджмент, система управления рисками, организация.
Formulation of the problem. Interest in the risk management system is increasing from year to year. The attention of decision-makers to the importance of introducing a high-quality and effective management system, as well as constant monitoring of its condition, assessment of efficiency, and further development is increasing. Each organization wants to conduct its activities as efficiently as possible, and a competently built and effective risk management system can help companies in making strategic decisions by knowing what potential threats could cause business to be delayed, interrupted or worse. The necessity to consider the risks of an organization in conditions of complete and partial uncertainty in various spheres of society (social, political, economic) is increasing. The risk management system of organizations is based on international standards: FERMA, COSO, ISO, as well as specialized standards used in various countries. Currently in Russia the most relevant standard for risk management is GOST R ISO 31000: 2010, which is an adapted version of the foreign ISO standard. There
were also created organizations engaged in the development of domestic standards in Russia.
Presentation of the main material. Risk management is aimed at maximizing the company's income and increasing its market value, while taking into consideration the risks of financial losses. Risk management system increases the likelihood of achieving the company's strategic goals, improves interaction between the company's management, reduces possible losses to a minimum, increases the efficiency and effectiveness of management activities and complies with the standards and legislation in the field of risk management. Thanks to a well-built risk management, it becomes possible to increase the stability of the enterprise.
Thus, the main goal of risk management is to form the optimal risk-return ratio in the organization [1].
The role of risk management in an enterprise is difficult to exaggerate; it defines risk management as a set of methods and techniques aimed at predicting the likelihood of risk situations and forming responses to risks in order to reduce the degree of consequences.
L»
BBSM
Let us examine the financial and economic activities of the Vkusvill LLC. Vkusvill is a Russian food retail supermarkets chain. Vkusvill's competitive advantage is that the company's suppliers are small Russian producers, so Vkusvill was able to increase profits despite the sanctions and a fall in the currency. Now more than 500 suppliers work directly with Vkusvill. The chain sells products from suppliers under the private label model, and this is a unique situation for the market. Vkusvill is a fast-growing organization on the Russian market and is currently developing, entering new markets, and offering new products. Today, there are approximately 1325 Vkusvill's outlets working in Russia. Over the past few years, the retail network has been expanding annually, by an average of 304 points. In total, at the beginning of 2018, only 413 Vkusvill stores were opened throughout Russia, a large share of which was in Moscow. As of January 1, 2020, a total of 1,332 retail outlets operated in all locations in Russia.
The organizational structure of Vkusvill is built on the turquoise management model, which means there is no clear hierarchical subordination and separation of powers in the organization [2]. The turquoise approach to management is the refusal of organizations from total
120 000 100 80 60 40 20
Source: compiled by the author based on [3] Based on the analysis of the organization's activities, it can be concluded that Vkusvill LLC has competitive advantages in the market due to the positive image of the healthy food retail chain in the eyes of customers and has prospects for expanding and entering markets in other cities, however, due to low formalization functions of personnel, the complexity of internal control and high costs of delivery to other cities, the implementation of the possibility of territorial expansion and IPO might be difficult.
Analysis of risk management in the enterprise. The first thing that can be noted in Vkusvill is the lack of a well-established integrated risk management system that would be continuous, systematic, and
East European Scientific Journal #6(70), 2021 53 management, from the introduction of key performance indicators, and unnecessary bureaucracy. Vkusvill shares the principles behind this approach. The organization has a flexible schedule, self-management, and it is forbidden to introduce any penalties for employees.
Regarding to the financial performance of organizations, the revenue of Vkusvill in 2020 amounted to 1,114 million rubles, which is 38% more than in 2019 (Figure 1). The Covid-19 pandemic did not have a significant negative impact on the organization's earnings. At the annual debriefing conference, Vkusvill employees reported that the number of customers grew from 124,000 to 195,000 over the year. The increase in revenue was facilitated by online delivery, the share of which in the revenue of Vkusvill was minimal before the pandemic. However, in 2020, the development of Vkusvill's online delivery accelerated so much that Vkusvill was included in the rating of the five largest online grocery retailers this spring. During the period of self-isolation, the online grocery delivery segment became one of the strongest market drivers. This helped Vkusvill increase its online sales.
integrated into the organization's daily business processes. Since Vkusvill uses a system of "promises", connections between departments are functional and there is no clear delineation of powers, a comprehensive and assessment of the system of all organization risks and the effectiveness of managing these risks appears to be an even more complicated process. At the moment, the approach to risk management at Vkusvill can be characterized as fragmentary or episodic. That is, the organization does not have a clearly formulated level of risk appetite for all risks, there is no dedicated department for risk management and collection of a risk register. Each department manages risks independently (in accordance with its functions). Risks, primarily
tu
3
o
000 000 000 000 000 0
I
2017 2018 2019 2020 ■ Net profit "Sales
Figure 1. Dynamics of net profit and revenue of Vkusvill LLC
54 East European Scientific Journal #6(70), 2021 financial, are analyzed by accounting departments, analysts, and lawyers.
To assess the risks of Vkusvill, expert evaluation methods was used. For the assessment, 5 experts were selected, three of whom are employees of the organization. The task of the experts was to determine the likelihood of the occurrence of risks and the possible damage in the scoring system. As a result, a register of risks was compiled, on the basis of which a risk map was drawn up for the main risks of all categories. There are three areas highlighted in the risk map: high-level risks in red, medium-level risks in yellow, and low-level risks in green. The most significant risks for the organization are located in the red area.
According to the obtained risk map, the most significant and dangerous risks for Vkusvill are:
1) Risk of low qualification of employees. Vkusvill does not have a centralized recruitment system. Employees may not be competent enough to
Further, each of their risks was considered, the measures that are being taken on the risk at the moment, and evaluative conclusions were made about the adequacy of the measures taken.
1) Description of risk: Risk of low qualification of employees.
Risk prevention measures: There is no specific procedure for minimizing the risk of low qualification of employees in the organization. Despite the fact that Vkusvill has more than 4 thousand employees, there is no centralized HR department.
The key indicator for this risk is the staff turnover rate. This indicator allows you to assess the effectiveness of recruitment and retention processes and identify problems in staff performance management. The employee turnover rate in Vkusvill increased by 10 percentage points over the year, reaching 50% in 2020. The staff fluidity is considered normal within 3-5% [4], but considering the peculiarities of the industry, the standard value is taken as 6%. A staff turnover value of 50% is very high and may indicate the inability of the company to control the loss of employees using management and Human Resources tools.
Vkusvill prides itself on the fact that such a large organization does not have a centralized HR department. The recruiting process in the company is organized like this:
UB
BtSgSB
carry out their functions. According to customer reviews, they often face rude attitude of the staff in the stores.
2) Risk of entering into the contract with an unreliable counterparty. In the absence of a thorough, documented verification of the supplier, there is a risk of purchasing low-quality services or services under conditions that are unfavorable for Vkusvill company.
Among the methods for assessing the effectiveness of the organization's risk management system, a method can be used in which key indicators and threshold values are established for the identified significant risks. For example, the number of mistakes of the same type of the organization's employees during the year - realized risks. Further, the measures used in the organization to manage these risks are analyzed, and a decision is made about their sufficiency or insufficiency. In the table 1 there are two significant risks for the organization that fall into the red zone of the risk map as well as key risk indicators.
Table 1.
1) there are special employees that help retail managers find and hire salesmen for the outlets
2) all other departments are looking for new employees themselves by posting vacancies and scheduling an interview (external recruiting agencies can be involved).
However, according to numerous employee reviews on the job search site, the organization lacks training: after hiring, employees are briefly explained / shown job responsibilities, and in the future employees claim that they have nowhere to turn for help, and there is practically no proper training.
Sufficiency of measures taken in the company to mitigate risk: based on the dynamics of the rate of employee turnover, it can be concluded that now control and risk mitigation measures are insufficient.
2) Description of the risk: Entering into the contract with an unreliable counterparty
The key risk indicator was the number of litigations in which the counterparties of Vkusvill acted as the defendant, that is, these are litigations to collect debt under a supply agreement or other debt from the counterparty, as well as to declare the counterparty bankrupt.
Measures to prevent risk: at the moment, at Vkusvill, before entering into the contract with another organization, the employees of the legal department check the full package of constituent documents, terms of office, the presence of acts issued within the
Risk management ^ assessment
Risk description Key risk indicator Value, 2019 Value, 2020 Threshold value
Risk of low qualification of employees Employee turnover rate 40% 50% >6%
Risk of entering into the contract with an unreliable counterparty The number of litigations in which the counterparties of Vkusvill acted as the defendant 36 44 40
Source: developed by author
L»
potential supplier, which may subsequently negatively affect the transaction and check information about the counterparty on public resources (including SPARK). When identifying current litigation related to a counterparty, the department analyzes this litigation and the role of a potential counterparty in this process. As a result, the department gives a short legal opinion on a potential supplier to the initiator of the audit, after which a draft contract is considered.
Sufficiency of measures taken in the company to mitigate risk: Vkusvill organization is taking measures to minimize risk, however, the counterparty verification process has not been optimized and there are areas for improving the process, including those related to the automation and storage of documents.
Thus, at the moment, Vkusvill does not have an established risk management system, the risk management process is carried out fragmentarily and irregularly, and a risk register is not compiled. With the help of expert evaluation method, a register and a risk map were compiled, the key risks of the organization were identified and the effectiveness of managing these risks was assessed.
Development of recommendations for improving risk management at Vkusvill. With the aim of improving the risk management process, Vkusvill is recommended to implement an integrated enterprise-wide risk management system (IRM). The introduction of a unified risk management model will help not only to reduce the previously discussed risks, but, in general, will increase the efficiency of the business.
Integrated risk management implies a comprehensive system for identifying, analyzing, evaluating, and developing measures to respond to risks, as well as constant monitoring of the implemented measures and their effectiveness. In the process of establishing an integrated risk management, risk assessment becomes a part of all business processes, and the risk management is aligned with the organization's strategy.
Building an effective risk management system is a process that includes transformations in the organizational structure of an organization. As part of the development of recommendations for improving the risk management system, it is necessary, first of all, to coordinate the actions of all departments of Vkusvill and to allocate the responsibility for risk management process.
To build an effective risk management system, it is necessary to develop a set of documents regarding risk management. It is proposed to form two documents at Vkusvill LLC: the Risk Management Policy and the Risk Management Regulations. First, it is advised to create and approve the Risk Management Policy. This document will set out the basic principles and objectives of risk management, principles of risk assessment and analysis methods, infrastructure of the risk management process, regulated tasks for performing risk management, the procedure for approving and revising the Policy. The Risk Management Policy should be based on a risk
East European Scientific Journal #6(70), 2021 55 management standard. It is recommended to use the ISO 31000: 2009 "Risk Management: Principles and Guidelines" standard, adapted to the business specifics of Vkusvill. Further, the Risk Management Regulation is recommended. Further, it is recommended to develop a Risk Management Regulation, the purpose of which is to determine the order of interaction between Vkusvill departments during risk management.
The next stage is the establishment of a risk management department (can be carried out on the basis of or with the participation of the Board of Governors). It is necessary to approve the composition of the risk management department, which will act within the framework of the approved Risk Management Policy. The tasks of the risk management department include an overview of the risks inherent in Vkusvill, assessment of the completeness of the register, distribution of responsibility for the implementation of risk management methods by departments and employees.
The competence of the Risk Department will include:
- performing the functions of a risk management coordinator at Vkusvill;
-providing explanations and methodological support to the risk owners on the emerging issues;
-coordination of the risk management process (identification, assessment and management of risks);
- appointment of responsible risk owners from each division;
- formation of a risk register and risk map; -selection of risk management methods; -monitoring and analysis of the effectiveness of
risk management measures;
-preparation of reports on the state of the RMS for the Board of Governors;
-conducting risk sessions to discuss and revise risks and measures to mitigate them.
The Risk Management Department will report to the Board of Governors. The Risk Department on a regular basis (quarterly or additionally in case of a significant change in circumstances) approves the updated Risk Map.
In order to reduce the risk of low qualification of employees, which is one of the key risks of the company, it is recommended to implement a centralized HR department and provide further training for employees in Vkusvill. Thanks to the introduction of the HR department, the process of recruiting more professional employees will be improved and optimized, as well as the training system for lower-level employees will be improved. Taking into account the existing turquoise system in the organization, it is proposed to ensure close cooperation of the HR department with retail manager. Thus, the HR department will not fully capture the functions that were previously performed separately, but will improve the work of the already functioning recruitment system. The functions of the HR department will include: -organization of the processes of selection and recruitment
56 East European Scientific Journal #6(70), 2021
-timely provision of all departments with competent employees
-formation of a personnel reserve -organization of staff trainings -organization of the career development of employees
-staff motivation, etc.
Conclusions: as a result of the analysis of the risk management process in Vkusvill, it was revealed that the organization currently lacks a risk management system that would be based on the interaction of departments and the presence of a department or committee responsible for collecting, systematizing, and analyzing information about Vkusvill risks. The organization does not have a methodology for raising risk awareness and risk management at all levels of the enterprise.
The key risks of the enterprise were identified and, using data on the measures taken to manage them, as well as by analyzing the key risk indicators, an assessment of the adequacy of the measures taken in Vkusvill to minimize these risks was determined. One of the key risks is the risk of low qualifications of employees due to ineffective recruitment procedures and further training.
So as to improve the efficiency of risk management, it is recommended to introduce a Risk Management Department and an HR Department in
Vkusvill LLC. Having introduced a risk management department and an HR department into the organizational structure, Vkusvill will systematize and increase the efficiency of the risk management process. Integration of risk management methods and tools into practice and training of employees will allow the organization to minimize the likelihood of an unfavorable result of activities and reduce losses to the organization.
References:
1. Рягин, Ю. И. Рискология в 2 ч. Часть 1 : учебник для вузов. М.: Издательство Юрайт;2019 [Ryagin, Yu. I. Riskology in 2 parts. Part: schoolbook. Moscow: Yurayt Publishing House; 2019. (In Russ).]
2. Бирюзовая компания URL: https://vkusvill.ru/publications/biryuzovaya-kompaniya.html
3. Система проверки контрагентов «Спарк».URL: https://www.spark-interfax.ru/
4. Кибанов, А. Я. Управление персоналом организации : учебник.4-е изд., доп. и перераб.М.: ИНФРА-М; 2020. [Kibanov, A. Ya. Personnel management of the organization:: schoolbook. Moscow: INFRA-M; 2020. (In Russ).]
5. ISO 31000:2009 — Principles and Guidelines on Implementation. 2009.
