THE FUTURE OF EUROPE IN A WORLD OF UNCERTAINTIES

1. Russian Industrial Enterprises under the Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007Roman M. KachalovCentral Economics and Mathematics InstituteRAS THE FUTURE OF EUROPE IN A WORLD OF UNCERTAINTIES 39th CMTEA - Romania, Iaşi, September 25-27th, 2008

2. 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.

3. 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.

4. 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.

5. 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

6. 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».

7. Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007Distributionrespondents in according to their risk level

8. Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007Managers attitude to risk management

9. 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.

10. 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.

11. Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007Methods of risk management

12. 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.

13. 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.

14. Russian Industrial Enterprises under Conditions of Uncertainty and Risk: Empirical Investigation in 2005-2007 F I N Thanks for your attention!