ENTERPRISE RISK MANAGEMENT-CASE STUDY ON PT. NUSANTARA RICE MILLS
Traditional risk management, which means that risk is managed independently, has been implemented by many private and public organizations in the past. However, the traditional risk management technique is considered to be inadequate to face the rapid change in the business environment lately. A...
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| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/72654 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Traditional risk management, which means that risk is managed
independently, has been implemented by many private and public
organizations in the past. However, the traditional risk management
technique is considered to be inadequate to face the rapid change in the
business environment lately. As the response to this condition, both the
private and public organizations have started to implement the concept of
Enterprise Risk Management, or usually called ERM. Different with the
traditional risk management technique, the ERM is intended to improve
the organization’s performance in more holistic ways. With the existence
of this ERM concept, many organizations especially companies that do
business, can get benefit by applying the concept in their organizations.
As one of the companies in Indonesia, PT Nusantara Rice Mills (PT
NRM) also faces many risks due to its business operation. PT NRM is a
rice milling company that already operated since 1983. In 2004, the
company created a large-scale rice-milling project in order to improve the
company’s performance and value. However, instead of achieving its
goal, since 2005 the company has been experiencing continuous increase
of its accumulated loss, which lead to the continuous decrease of its
capital. This condition shows that PT NRM is unable to survive in the
middle of many changes in its business-operating environment.
In order to have a better performance, PT Nusantara Rice Mills (PT
NRM) can also uses the concept of Enterprise Risk Management to
manage many risks that it faces. The Enterprise Risk Management
process itself involves a series of steps, which are business analysis, risk
identification, risk assessment, and risk management. In this research,
researcher is trying to apply the Enterprise Risk Management concept in
PT Nusantara Rice Mills by following the series of risk management
process steps.
This research provides useful information for PT Nusantara Rice Mills to
manage risks that it faced. In this research, the business analysis shows
the characteristics of PT Nusantara Rice Mills’ business. Meanwhile, the
risks identified focuses on three risks type, which are Financial Risk,
Market Risk, and Operational Risk. In the risk assessment, the probability
and severity of each risk could be known. In the last step of risk
management process, which is risk management, the company could
know the most suitable risk treatment for each risk. This research also
provides an important recommendation for PT Nusantara Rice Mills,
which is to manage risks by using the risk management action resulted
from this research. |
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