Integrating the risk identification process into the objective setting process : a case study.
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During the past five years risk management has evolved to such an extent that most companies have developed formal risk management systems whereby their risk identification processes are integrated into their objective setting processes, albeit with different forms of integration. The integration of the risk identification process into the objective setting process is an essential step in the risk management process as it facilitates the identification of those risks that may affect the achievement of business objectives and ensure that plans are developed to mitigate the risks identified. The management of risks is essential to the success of any business whether profit making or non-profit making. This study examines, by way of a case study, the extent to which a specific business unit, within an organisation has integrated its risk identification process into the objective setting process. It then explores the benefits that can be derived from integrating the risk identification process into the objective setting process. In support of the aims of the study the corresponding objectives are to determine the extent to which the unit of study has integrated the risk identification process into the objective setting process, to demonstrate the benefits of integrating the two process as well as recommendations on future research and guidelines on integrating risk identification into objective setting. The study concludes that the integration of the risk identification process into the objective setting process starts by setting business objectives and then followed by identifying those events that can negatively impact the achievement of objectives. The integration of the two processes can happen in practice and that there are benefits to the organisation that can be derived from the integration of the risk identification process into the objective setting process as observed by the study. For future research it is recommended that similar studies involving multiple case studies should be conducted to test the applicability of the integration model to a broader population. Other business units within ABSA, just like the Home Loans Division should use the risk identification integration model to identify business risks they are exposed to, that is, if they are not already doing so, taking into consideration their individual circumstances and business planning processes.