STRATEGIC RISK MANAGEMENT

ASSIST PROF. DR. POOMPORN THAMSATITDEJ

COLLEGE OF MANAGEMENT
MAHIDOL UNIVERSITY
OBJECTIVES

• To understand the effect of dynamic changes and uncertainty on strategic

planning

• To integrate risk issues faced by corporations with other managerial practices

• To apply risk management framework regarding distinctive business context

• To practice risk management tools and techniques used in risk management

process

• To enhance their business risk communication skills

EVALUATIONS

Individual Quiz on Risk Management 10%

Group Assignment on Strategic Foresight 30%

Group Assignment on Strategic Risk Management 30%

Essay on Strategic Risk Management 30%

STRATEGIC THINKING

Stratcgos (Greek Terminology)

• Stratus : Army
• Ago : Leading/Moving

• The general addes value – high level vision and

orchastration

• They can see what the field commander cannot.

• Use resources.
• Be effective
• Establish position
STRATEGIC THINKING

• Strategy has been heavily influenced by military experience, where strategy

(in principle) consists of the following steps: (i) describe, understand and
analyze the environment; (ii) determine a course of action in the light of the
analysis; (iii) carry out the decided course of action.

This is a ‘linear’ model of rational action.

• Corporate objectives are different from military ones, namely, to establish a

distinctive competence enabling them to satisfy customers than competition
– and not to mobilize sufficient resources to destroy the enemy.
STRATEGIC THINKING

Strategic thinking is an ability to plan for the future. It is the

capacity to prepare strategies and conjure ideas that will
both cope with changing environments and consider the
various challenges that lie ahead.
STRATEGY กลยุทธ' (Strategy)

WHY NOT WHY HOW TO BE BETTER

A strategy must be
Actions
coherent and doable.
STRATEGY
Strategy Planning
• Actual customers are the customers. • You control costs
• You don’t control them. • You are the customers
• You don’t control revenues • It’s comfortable.

✔ ✔ ✔ ✔

✔ ✔ ✔ ✔

✔ ✔ ✔ ✔
STRATEGY กลยุทธ' (Strategy)

X X

O O

The budget flight revolution began in America with Southwest Airlines in Dallas,
Texas. With flights turning profitable in 1973 and remaining so ever since, former
lawyer Herb Kelleher proved the viability of low cost flights. In terms of passengers
carried each year, Southwest is now the biggest airline in the USA and the second
biggest airline in the world. It has no plans to expand to international flights.
STRATEGIC LEADERSHIP

Strategic leadership is a practice in which executives, using different

styles of management, develop a vision for their organization that
enables it to adopt to or remain competitive in a changing
economic and technological climate.

Strategic leaders can use this vision to motivate employees and

departments, fostering among them a sense of unity and direction to
implement change within their organization.
STRATEGIC LEADERSHIP
Strategic Leadership competencies and skills include
• Anticipate : collect information from a wide range of sources and outside your company’s
industry or function to predict competitors’ moves and reaction to new initiatives or products.
• Challenge : view and reframe a problem from multiple angles to understand its underlying
causes.
• Interpret : exhibit curiosity and openness when testing several working hypotheses and involve
others before coming to any conclusions.
• Decide : weigh long-term investments from growth with short-term pressure for results as well
as the risks and tradeoffs for customers and other stakeholders, when making decisions.
• Align : examine stakeholders’ incentives and tolerance for change and identify conflicting
interests.
• Learn : convey stories of success and failure to advocate learning.
Source : Paul. J. H. Shoemaker, Steve Krupp and Smantha Howland (2013), Strategic leadership : The essential skills, Harvard Business Review, January - February
STRATEGY MANAGEMENT
• Vision – Big picture of what you want to achieve.
Vision
Mission
Strategies • Mission – General statement of how you will achieve the vision.

CORPORATE • Core Values – How you will behave during the process.

Once you have identified what your organization wants to achieve (vision) and generally how the vision

will be achieved (mission), the next step is to develop a series of statements specifying how the mission
will be utilized to achieve the vision:
BUSINESS
• Strategies – Strategies are one or more ways to use the mission statement in order to achieve the

vision statement. Although an organization will have just one vision statement and one mission
statement, it may have several strategies.
OPERATIONS
• Goals – These are general statements of what needs to be accomplished to implement a strategy.

• Objectives – Objectives provide specific milestones with a specific timeline for achieving a goal.

• Initiatives– These are specific implementation plans of how you will achieve an objective.
 Crafting and executing a company’s strategy is an ongoing
process that consists of five interrelated stages:
• Developing a strategic vision that charts the company’s long-term direction, a mission
statement that describes the company’s purpose, and a set of core values to guide the pursuit of
the vision and mission.

• Setting objectives for measuring the company’s performance and tracking its progress in
moving in the intended long-term direction.

• Crafting a strategy for advancing the company along the path management has charted and
achieving its performance objectives.

• Executing the chosen strategy efficiently and effectively.

• Monitoring developments, evaluating performance, and initiating corrective adjustments in the

company’s vision and mission statement, objectives, strategy, or approach to strategy execution
in light of actual experience, changing conditions, new ideas, and new opportunities.
STRATEGIC FRAME OF REFERENCE
1) Translate your vision into a concrete, 1) List of components or dimensions
measurable global goal 2) List of what must be changed about them
2) Drive a number of sub-goals that lead 3) Specific actions to change that
towards achieving the global goal (3-4 levels) 4) Expected outcome or benefits of these changes

Critical Current
Vision Position Milestones Strategies
Goals

1) Define your business’ key 1) List of components or

1) Corporate Vision Alignment dimensions
components
2) Create Strategic Vision 2) Determine how these components 2) List of what must be changed
must be changed about them
3) Analyze organizational capabilities 3) Specific actions to change
4) Choose the solutions 4) Expected outcome or benefits
of these changes
STAGES OF STRATEGIC MANAGEMENT

• Strategy formulation, implementation, and evaluation

activities occur at three hierarchical levels in a large
organization: corporate, divisional or strategic business unit,
and functional

• Strategic management helps a firm function as a competitive

team.
Strategic Risk Management: Enterprise Risk

Competitive
Corporate Environment
Level
GOALS
Evaluating Strategies

OBJECTIVES OBJECTIVES OBJECTIVES

..ensuring that management

Business Level rolls out the strategies
Internal across organization.
Organization

Operational Level
STRATEGIC ROADMAP
A Strategic Roadmap communicates your organization’s vision. It’s
a powerful tool for visualizing the key steps to achieving your mission.
Championed by senior-level stakeholders, strategic planning
roadmaps focus on mission-critical business objectives, and usually
emphasize long-term timelines and deadlines.
Strategic Roadmap structure consists of three fundamental questions:

• What do we want to achieve?

• Where are we now?

• How do we reach our goals?

STRATEGIC RISK MANAGEMENT : Learning Flow

RISK CONCEPT

Enterprise Risk
Strategic Foresight Strategic Scenarios Strategic Risk
Management

• Potential effects from • Corporate Strategic

• Dynamic, complex • Risk management
changing Risk Management
and ambiguity framework that would
environment that and Risk Response
environment forces support firms to
could cause firms to Strategy tackle
company to recognize achieve its goals and
adjust itself recognition of
long term oriented objectives
changes and
thinking
impacts

Group Assignment 1 Group Assignment 2

QUIZ 1
QUIZ 2
Individual Assignment
Example
Strategic
Foresight
Strategic
Risk
REFERENCE

• Gregory Monahan ( 2008), Enterprise Risk Management A Methodology for Achieving Strategic

Objectives, John Wiley and Sons

• Paul Godfry, Emanual Lauria, John Buballa and Kristina Narvaez (2020), Strategic Risk

Management in an Uncertain Age, Berrett-Koehler Publisher.

• Rafael Ramirez and Angela Wilkinson (2016), Strategic Reframing : The Oxford Scenario Planning

Approach, Oxford University Press

• Langdon Morris (2016), Foresight and Extreme Creativity Strategy for the 21st Century, Futurelab