There are no projects without risks. Increasing project complexity leads to an increase in the number and scale of associated risks. When we think about project management, we think less about risk assessment, which is an intermediate activity, and more about how to develop a response plan to achieve risk reduction. Project risk management has its own specific features, which will be discussed in this article.

Concept of project risk

By risk in project activities we mean a probable event, as a result of which the subject who made the decision loses the opportunity to achieve the planned results of the project or its individual parameters that have a time, quantitative and cost assessment. Risk is characterized by certain sources or causes and has consequences, i.e. influences the results of the project. The key words in the definition are:

• probability;
• event;
• subject;
• solution;
• losses.

Project risks are always associated with uncertainty. And in this regard, we should be concerned with two points: the degree of uncertainty and its causes. Uncertainty is proposed to be understood as the state of objective conditions in which the project is accepted for execution, which does not allow one to foresee the consequences of decisions due to the inaccuracy and incompleteness of the available information. The degree of uncertainty is significant because we can only manage those risks for which we have at least some meaningful information.

If there is no information, then these types of risks are called unknown, and a special reserve has to be laid down for them without implementing management procedures. The example of the risk of a sudden change in tax legislation is quite suitable for this situation. For threats for which at least minimal information is available, a response plan can already be developed, and risk minimization becomes possible. The following shows a small diagram of the boundaries of risk management from the perspective of its certainty.

Scheme of risk management boundaries from a position of certainty

The next point for understanding the specifics of project risk is the dynamism of the risk map, which changes as the project task is implemented. Pay attention to the diagram below. At the beginning of a project, the likelihood of threats is high, but the potential losses are low. But by the end of all work on the project, the amount of losses increases significantly, and the likelihood of threats decreases. Taking this feature into account, two conclusions follow.

1. It is advisable to carry out risk analysis several times during the project implementation. In this case, the risk map is transformed.
2. Risk minimization occurs most optimally at the concept development stage or at the time of development of project documentation. This option is much cheaper than at the stage of direct implementation.

Model of the dynamics of risk probability and loss magnitude

Let's look at a small example. If at the very beginning of a project a threat to the quality of its product is identified due to an expensive material that does not meet specifications, then the costs associated with the correction will be negligible. Changes to the project plan due to material changes will result in a slight delay in schedule. If possible negative consequences are revealed at the stage of order execution, the damage may be significant, and it will not be possible to reduce losses.

Elements of the concept of project risk management

Modern project risk management methodology assumes an active approach to working with the sources and consequences of identified threats and dangers, in contrast to the recent past, when the response was passive. Risk management should be understood as a set of interrelated processes based on the identification, analysis of risks, and the development of measures to reduce the level of negative consequences arising from the occurrence of risk events. The PMBOK identifies six risk management processes. A visual diagram of the sequence of these processes is presented below.

Scheme of project risk management processes according to PMBOK

The main procedures for this type of management are:

• identification;
• grade;
• response planning;
• monitoring and control.

Identification involves identifying risks based on identified factors of their occurrence and documenting their parameters. Qualitative and quantitative analysis of the causes of occurrence and the likelihood of negative consequences form the assessment procedure. Planning a response to identified factors involves developing measures to reduce the adverse impact on the results and parameters of the project. Project activities are characterized by dynamism, unique events and associated risks. Therefore, their monitoring and control occupy a special place in the management system and are carried out throughout the life cycle of the project task. Risk management ensures the following.

1. Project participants’ perception of uncertainties and threats in the environment of its implementation, their sources and probable negative events due to the manifestation of risks.
2. Finding and expanding opportunities for an effective and efficient solution to the design problem, taking into account the identified uncertainty.
3. Development of ways to reduce project risks.
4. Finalization of project plans taking into account identified risks and a set of measures to reduce them.

Project risks are subject to control by the project manager. All participants in the project task are involved in this work to varying degrees. Programming and mathematical apparatus, methods of expert assessments, interviewing, discussion, brainstorming, etc. are used. Before management begins, an information context is formed, including the identification of external and internal conditions in which tasks will be solved. External conditions include political, economic, legal, social, technological, environmental, competitive and other aspects. Possible internal conditions consist of:

• characteristics and goals of the project itself;
• characteristics, structure and goals of the company;
• corporate standards and regulations;
• information about resource support for the project.

Risk management planning

The first process among the general procedures for working with project threats is risk management planning. It allows you to clarify the selected methods, tools and level of management organization in relation to a specific project. The PMI Institute assigns an important role to this process for the purposes of communications with all interested parties. Below is the planning process diagram found in the PMBOK Guide.

Risk management planning data flow diagram. Source: PMBOK Guide (Fifth Edition)

The risk management plan is a document that includes a certain composition of sections. Let's look at an example of the detailed content of such a plan.

1. General provisions.
2. Main characteristics of the company.
3. Statutory characteristics of the project.
4. Goals and objectives of risk management.
5. Methodological section. The methodology includes methods, analysis and evaluation tools, and sources of information that are recommended to be used to manage project risks. Methods and tools are described by stages of project implementation.
6. Organizational section. It includes the distribution of roles of project team members, establishing responsibility for the implementation of the procedures provided for in the plan, and the composition of relationships with other components of project management.
7. Budget section. Rules for the formation and enforcement of the risk management budget are included.
8. Regulatory section, including timing, frequency, duration of risk management operations, forms and composition of control documents.
9. Section of metrology (evaluation and recalculation). Evaluation principles, rules for recalculating parameters and reference scales are determined in advance and serve as auxiliary tools for qualitative and quantitative analysis.
10. Risk thresholds. Taking into account the importance and novelty of the project implementation, acceptable values ​​of risk parameters are established at the level of the project and individual threats.
11. The reporting section is devoted to issues of frequency, forms, procedure for filling out, submitting and reviewing reports on this project management block.
12. Section for monitoring and documentation of risk management for the project.
13. Templates section for risk management.

Identification of project risks

The next process of the control unit under consideration is risk identification. During its implementation, project risks are identified and documented. The result should be a list of risks, ranked by their degree of danger. The identification of factors should involve not only team members, but also all project participants. The PMBOK Guide describes this process as follows.

Extract from Section 11 of the PMBOK Guide.

Identification is made based on the results of a study of all identified factors. It should not be forgotten that not all factors are identified and subject to control. During the development and refinement of project plans, new possible sources of threats and hazards often arise. The trend is that as a project progresses toward completion, the number of likely risk events increases. Good identification depends on having a detailed risk classification at hand. One of the useful classification features is their level of controllability.

Classification of risks by level of controllability

Classification of project risks based on the sign of controllability is useful in determining which uncontrollable factors reserves should be made for. Unfortunately, controllability of risks often does not guarantee success in managing them, so other methods of division are also important. It is worth noting that there is no universal classification. This is due to the fact that all projects are unique and are accompanied by a lot of specific risks. In addition, it is often difficult to draw boundaries between similar types of risks.

Typical classification features are:

• sources;
• consequences;
• ways to reduce threats.

The first sign is actively used precisely at the identification stage. The last two are useful when analyzing risk factors. Let us consider the types of project risks in connection with the uniqueness of their factors.

1. Specific threats from the perspective of a local project. For example, risks tied to a specific technology being introduced.
2. Specific threats from the perspective of the type of project implementation. Factors for construction, innovation, IT projects, etc. are specific.
3. General risks for any projects. You can give an example of mismatch of plans or low level of budget elaboration.

For identification, the correct formulation of the risk is important; the source, consequences and the risk itself must not be confused. The wording should be two-part and include an indication of the source from which the risk arises and the threatening event itself. For example, “the risk of funding failure due to discrepancies in the project budget.” As noted, types of project risks are often divided according to their main sources. The following is an example of the most common version of this classification.

Classification of project risks by sources

Analysis and assessment of project risks

Risk analysis and assessment are carried out with the aim of transforming information obtained during identification into information that allows making responsible decisions. During the qualitative analysis process, a series of expert assessments are made of possible adverse consequences due to the identified factors. In the process of quantitative analysis, the values ​​of quantitative indicators of the probability of the occurrence of threatening events are determined and clarified. Quantitative analysis is much more labor-intensive, but also more accurate. It requires quality input data, the use of advanced mathematical models and higher competence from personnel.

There are situations when qualitative analytical research is sufficient. At the end of the analytical work, the project manager intends to receive:

• list of risks grouped by priority;
• a list of positions requiring additional analysis;
• assessing the riskiness of the project as a whole.

There are expert assessments of the likelihood of adverse events occurring and the level of impact on the project. The main output of the qualitative analysis process is a list of ranked risks with completed assessments or a completed risk map. Both probabilities and influences are broken down into categorical groups within a given range of values. As a result of the assessments, various special matrices are constructed, in the cells of which the results of the product of the probability value and the impact level are placed. The results obtained are divided into segments, which serve as the basis for ranking threats. An example of such a probability/impact matrix can be found in the PMBOK Guide and is presented below.

Example of a probability and impact matrix.

Risk is generally understood as the likelihood (threat) of an enterprise losing part of its resources, losing income, or incurring additional expenses as a result of production and financial activities. The purpose of risk analysis is to provide the necessary information to make a decision about the feasibility of investing in a project and to provide measures to protect against possible financial losses.

Financial risks of an innovation project can be caused by the following factors:

§ technological risk associated with the difficulties of developing industrial technology for the production of a product;

§ possible increase in costs and time required to establish production technology;

§ the possible appearance on the market of new enterprises producing products with similar characteristics and using a similar technical design;

§ possible reduction in product prices;

§ possible increase in prices for basic materials and components.

Each factor is analyzed in relation to the project, the likelihood of its occurrence is substantiated and how it can be mitigated. When analyzing these factors, we can proceed from the following considerations.

An innovative project contains a scientific component, which a priori implies the presence of a certain technological risk. To determine how large or small it is, one can proceed from whether the project participants have significant experience in this field and whether they have technological experience in the manufacture of similar products. In the case of positive characteristics, the corresponding conclusion is drawn: the level of this risk is low. Other factors can be analyzed in a similar way. For example, an increase in costs and funds for establishing technology is quite acceptable. However, it is necessary to take into account the preliminary work carried out by the project initiators to implement the scientific ideas of the project, which was shown by an analysis of the project’s sensitivity to fluctuations in the value of investment costs.

As for the possible emergence of new enterprises on the market that produce products with similar characteristics, to assess this factor one should proceed from information about scientific developments in this direction, including those of competitors. In addition, it can be kept in mind that the initiators of the project, being leaders in this technology, will have an advantage over competitors in further improving the product during the R&D activities provided for in a small innovative enterprise.

When analyzing the factors of reducing the price of a product and increasing prices for basic materials and components, you can rely on the results of a sensitivity analysis of their impact on the net present value of the project. The margin for a possible price reduction in the future may neutralize the danger of future competition. Sensitivity analysis can show whether an enterprise has a margin for possible cost growth, and if this margin is significant, then in the worst case, the enterprise’s activities may become less profitable and the payback period of the project may increase slightly, but the project may remain financially feasible.

9. Conclusions on the financial plan of the project

The commercial effectiveness of the project can be assessed in the following areas:

§ assessment of its financial efficiency and implementation;

§ assessment of resistance to possible changes in implementation conditions;

§ assessment of the financial risks of the project.

In the first direction a conclusion is made about the financial feasibility of the project based on the analysis of these flows and its assessment based on indicators of commercial efficiency, highlighting the main, in the opinion of the project initiators, indicators, for example, the payback period and net present value of the project.

In the second direction Based on an analysis of the project’s sensitivity to environmental factors, it is noted which factors the project is most sensitive to and what “margin of safety” the project has for the influence of these factors on the commercial result of its activities in order to recognize the project as sustainable during its implementation.

In the third direction Based on the results of the risk analysis, a conclusion is drawn about their significance and possible impact on the project’s performance indicators.

The general conclusion is formulated on the basis of a generalization of the above assessments of the financial efficiency, feasibility, sustainability and financial risks of the project.

10. Applications

The Appendix to the business plan may contain copies of documents confirming the reality of the drawn up business plan. They can be: copies of patents for intellectual property, copies of already concluded contracts for the supply of products, letters from potential clients, price lists of supplier companies and competing companies, comparisons of the characteristics of a new product with those available on the market. Quarterly cash flow plans for the next two to three years, quarterly forecasts of production volumes, revenue from product sales, a quarterly schedule for the purchase of equipment, a quarterly forecast of labor costs and other indicators that decipher the summary (annual) indicators in the documents can also be provided business plan.

Questions and short answers to them to reinforce the material

1. What are the sources of financing for an innovation project?

1.1. Sources focused primarily on financing innovative projects declared by individuals with the formation of a small innovative enterprise:

§ Fund for Assistance to the Development of Small Enterprises in the Scientific and Technical Sphere;

§ venture capital funds;

§ “business angels”.

Sources of financing for small innovative enterprises:

§ large companies interested in this project;

§ investment companies;

§ bank loan;

§ mortgage loans;

§ leasing financing.

1.2. Departmental investment funds (ministries, agencies), funds from federal, constituent entities of the Federation, municipal budgets, financing mainly innovative projects at the request of legal entities, including small innovative enterprises:

§ Russian Foundation for Technological Development of the Ministry of Education and Science of the Russian Federation;

§ investment funds of ministries, agencies;

§ funds from the Federal Agency for Science and Technology (Rosnauka), allocated to finance federal target programs “Research and development in priority areas of development of the scientific and technical complex of Russia for 2007-2012”, “National technological base for 2007-2011”;

§ funds from the budgets of the constituent entities of the Federation and municipalities.

2. What are the conditions for financing innovative projects by the Fund for Assistance to the Development of Small Innovative Enterprises in the Scientific and Technical Sphere?

Finances innovative projects at the stage of formation of a small innovative enterprise or at the beginning of its formation. Every year it announces the START program to finance newly formed small innovative enterprises. The Fund fully finances them only in the first year; in the second and third years, it only co-finances projects together with an extra-budgetary investor or together with a small innovative enterprise.

3. What are the conditions for financing innovative projects by domestic and foreign investment companies?

The presence of an innovative project with high growth potential, commercial efficiency, level of management qualifications with business transparency and the possibility of exiting it.

4. What are the conditions for obtaining a long-term (more than 1 year) bank loan to finance an innovation project?

Sustainable functioning of a small innovative enterprise without recessions, ensuring loan repayment and interest rates. The borrower's own investment in the project must exceed 30% of the project cost. The loan must be secured by a payment guarantee from legal entities or collateral of property and loan insurance.

5. What is a mortgage loan?

Loan secured by real estate. In case of refusal to repay or incomplete repayment of the debt, the pledgee has a priority right to satisfaction of his claim from the value of the pledged property.

6. What is the essence of leasing financing of a project?

The leasing company, at the request and direction of the management of a small innovative enterprise, purchases equipment from the manufacturer for a loan provided by the bank, which it leases to the small innovative enterprise for temporary use for a fee.

7. What are the conditions for generating funds and financing innovative projects by the Russian Fund for Technological Development?

The fund is extra-budgetary and is formed through voluntary contributions from enterprises. The Fund finances innovative projects on a repayable basis with a repayment period of no more than 36 months, if the applicants have the necessary material, human, and other resources to complete the project.

8. What innovative projects are financed by the Federal Agency for Science and Innovation (Rosnauka)?

It finances innovative projects through competitions announced annually for targeted Federal programs: “Research and development in priority areas of development of the scientific and technological complex of Russia for 2007-2012” and “National technological base for 2007-2011”.

9. What innovative projects can be financed from the budgets of the constituent entities of the Federation and municipalities?

If innovative projects are aimed at solving regional and local problems. Financing is usually carried out on the principle of equity participation.

10. What groups are the methods for assessing the commercial effectiveness of an innovative project divided into and what is their essence?

They are divided into two groups: simple (static) and discounted. Simple ones are based on initial data without taking into account the inequality of money at different points in time. These include the simple payback period as the ratio of the initial investment to net profit per year and the simple rate of return as the inverse indicator. Discounted methods are based on bringing funds (income and expenses) to one (initial) point in time using a discount factor (discount rate). The coefficient of bringing funds to the initial point in time is equal to , where r is the discount rate, T is the number of years of reduction. The discounted indicators are based on the “net cash flow” indicator as the difference between the inflow and outflow of funds. Inflows include investments of own capital, borrowed funds, revenue from sales of products, etc. Outflows include capital investments, production costs, taxes, etc.

11. What is the essence of the discount factor (discount rate)?

In calculating the commercial effectiveness of an innovative project, it is necessary to bring cash flows to one point in time, which means bringing the funds of the future period to the amount of funds of the current period. Firstly, due to the need to bring the investor's future income to today's point in time using a discount rate, which may be equal to the deposit interest rate on deposits in a reliable bank. Secondly, the discount rate may take into account inflation expectations and the amount of adjustment for the risk of not receiving the income envisaged by the project. Typically, the estimated period of commercial effectiveness of an innovative project is 3-5 years, equal to the duration of its lifespan. If the cash flow calculations take the base prices of the initial period, and appropriate measures are taken to reduce and prevent risks in the project, then the discount rate is taken equal to the minimum (or as agreed with the investor) expected investment performance, for example 15%.

12. What indicators of commercial efficiency of an innovative project are used, calculated using the method of discounting cash receipts and payments, and their role?

These include:

§ net present value or net present value of the project (NPV) as the sum of net discounted flows reduced to the initial level. Characterizes the economic result of the project;

§ profitability index (PI) as the ratio of the sum of net discounted flows excluding capital investments reduced to the initial level to the initial investments. It characterizes the safety margin of the project in relation to the rate of return on capital taken into account in the discount factor;

§ the discounted payback period of the project is the period of time during which the negative value of the net present value of the project, calculated on an accrual basis, becomes equal to zero. Subsequently, the project begins to generate net income;

§ internal rate of return (IRR) is the value of the discount rate at which the amount of discounted receipts will be equal to the amount of discounted payments. The internal rate of return is equal to the discount rate at which the net present value of the project becomes zero. It is compared with the rate of return (discount rate) accepted for the investor. If it is higher, then it characterizes the “margin of safety of the project” in relation to the accepted discount rate.

13. What is the break-even point of a project?

This is the sales volume that ensures the break-even of the innovative project. The break-even margin is calculated as the ratio of the constant part of current costs (wages of administrative personnel, etc.) to the sum of the constant part of current costs and profit.

14. Purpose of a business plan for an innovative project.

A business plan is a fundamental document for an investor’s decision to finance a project. It reflects the content of the new business, its financial side and overall assessment. It develops and clarifies the indicators and main provisions of the innovation project. This is a program aimed at implementing a business idea - making a profit.

15. What is the purpose of the Business Plan Financial Plan and what are its main documents?

The financial plan should give the initiators of a small innovative enterprise and investors a complete picture of where and when the enterprise should receive money, what it will be spent on and what the profit could be. Its main documents are:

§ Planned profit and loss statement;

§ Cash flow plan (plan of cash receipts and payments);

§ Planned balance.

16. What is the main content of the Planned Income Statement and its purpose?

It contains indicators of the financial position of the enterprise over time during the billing period:

§ revenue from product sales;

§ direct (variable) costs (depending on product output);

§ fixed (overhead) costs;

§ cost;

§ balance sheet profit;

§ income tax;

§ net profit.

The planned profit and loss statement shows how efficiently a small innovative enterprise will operate during the billing period. It can serve as a basis for making decisions about the possibility of making different payments or changing the price of a product.

17. What is the main content of the Cash Flow Plan and its purpose?

It shows the cash flow from core activities: revenue, net profit, depreciation; from investment activities: investments of own and borrowed capital, loan payments, investment costs, etc., cash balance.

The cash flow plan should provide information about when, how much and from what funds will be received and when, to whom and how much needs to be paid.

18. What is the main content of the Planned Balance Sheet and its purpose?

It reflects all assets and liabilities of the enterprise during the accounting period. For the “assets” position the following data is provided:

§ about current assets - cash on hand and in a bank account, accounts receivable, work in progress, finished goods inventories, etc.;

§ about long-term assets - fixed assets, depreciation, etc.

The following data is provided for the position “liabilities”:

§ about current liabilities - accounts payable for materials and components, short-term loans, etc.;

§ about long-term liabilities - equity investments, long-term loans, retained earnings, etc.

The last position is the balance (between assets and liabilities).

The planned balance sheet, reflecting the ratio of various items of assets and liabilities, makes it possible to assess the reliability of the enterprise and its development trends.

19. What is a project sensitivity analysis?

Sensitivity analysis is to quantify the impact on the project’s commercial performance indicators, primarily on the project’s net present value (NVP), of external environmental factors: inflation, possible price reductions, sales volumes, increases in fixed and direct (variable) costs , discount rates, investment volume. As a result of the analysis, the “project safety margin” is established: a possible change in the values ​​of factors up to the level until NPV passes through zero, i.e., how sustainable the innovative project is.

20. What factors determine the financial risks of the project and how can they be prevented in the project?

The financial risks of an innovative project may be influenced by technological risk, a possible increase in costs and time in setting up production, the emergence of competitors, changes in the price of the product and prices for materials and components. The likelihood of the influence of these factors and their significance are assessed based on an analysis of the technological development of a new product, the experience of the project initiators, the degree of novelty of the project, planned future R&D, as well as the results of an analysis of the sensitivity of project parameters, for example, net present value to changes in the price of a new product and prices on materials and components, characterizing the margin of possible change, how significant it is and whether, therefore, these factors can significantly affect the financial risks of the project.

Literature

1. The mechanism of involving the results of scientific activity in economic circulation: Sat. tr. Seventh symposium “Russian technologies for industry”. St. Petersburg, 2004.

2. Kudinov I.A. Financial strategy of high-tech companies // High technologies, fundamental and applied research, education: Sat. tr. T. 1. St. Petersburg: SPbSPU Publishing House, 2005.

3. Management of technological innovation: Textbook. allowance / Ed. prof. S.V. Valdaytsev and prof. N.N. Molchanov. St. Petersburg: St. Petersburg State University Publishing House, 2003.

4. Fundamentals of innovative management. Theory and practice: Textbook. allowance / Ed. Doctor of Economics, prof. P.N. Zavlina, Doctor of Economics, Prof. A.K. Kazantseva, Doctor of Economics, Prof. L.E. Mindeli. M.: Economics, 2000.

6. Vechkanov G.S., Vechkanova G.R. Modern economic encyclopedia. St. Petersburg: Lan, 2002.

7. Gribalev I.P., Ignatieva I.G. Business plan. Practical guide to compilation. St. Petersburg, 1994.

8. Motovilov O.V. Sources of capital to finance innovation. St. Petersburg: St. Petersburg State University Publishing House, 1997.

9. Management of innovative projects: Textbook. allowance / R.A. Mikhailov, T.V. Modits, N.N. Molchanov, P.S. Sharakhin St. Petersburg, 2001.

Leasing– (from the English leasing lease) - long-term lease (for a period from 6 months to several years) of machinery, equipment, vehicles, industrial facilities, providing for the possibility of their subsequent purchase by the lessee. Leasing is carried out on the basis of a long-term agreement between a leasing company (lessor), which purchases equipment at its own expense and leases it out for several years, and a lessee company (lessee), which gradually pays rent for the use of the leased property. After the expiration of the contract, the tenant either returns the property to the leasing company, or extends the term of the contract (concludes a new contract), or buys the property at its residual value. International leasing is an agreement concluded between a lessee and a lessor located in different countries.

This article will talk about the risks of the project, examples will be given, as they say, “from real life”. To manage the work process, the same goals are always set: to save time and money invested. To minimize project risks, examples of which are very numerous, risk management is created, armed with a special methodology. And this is in addition to the fact that the project sponsor will see the effectiveness of such work. Any dangerous event has a probability of occurring, but it is not a fact that its impact on work will necessarily be negative. From time to time, positive risks of the project are noted. Example: suddenly a real expert appears on the project, who will smash all the work done to smithereens, but in the end will significantly speed up the appearance of results and add quality to them.

How to predict the probability?

Risk is a probabilistic event that can happen either guaranteed or suddenly. It is not at all difficult to foresee the guaranteed risks of a project. Example: licensed software almost always goes up in price at the end of the year. It’s difficult to even call this a risk - it’s rather a given that needs to be taken into account when planning resources.

But there are also truly dangerous examples of investment project risks that are almost impossible to foresee. For example, a decrease in the solvency of the population and loss of demand for the products of the project, then prices will have to be regulated or other rather painful measures will have to be taken.

Any projects related to investments cannot but relate to the future, and therefore there is never any confidence in the predicted results. It can be affected by both inflation and the collapsed economic crisis, as well as any force majeure event: natural disaster, fire, etc. It makes no sense to expect such an event, but you still need to be prepared. Moreover, smaller troubles are still bound to happen as the investment project is implemented.

Examples of risks: a large number of competing manufacturers have appeared on the market. What should I do? Only supply benefits will save the project. Or something happened that was not expected (external changes of any nature can have an impact - from inflationary, political, social, commercial to the sudden emergence of new technologies): there are clearly not enough funds to continue the implementation of the project. Here we will probably have to slightly pause the development of the project and postpone the launch for the required period. In short, there is always a certain risk.

Project risk assessment

The example of predetermination given above, when the cost of software is planned to increase, is very typical. There are techniques that allow you to evaluate and anticipate many and not so simple situations. Here is an example of a project risk assessment with the choice of a specific position. Any investment project implies, first of all, the vision of the investor, and not the intermediaries and the entrepreneur implementing the project.

The first step is to consider the macroeconomic situation - both in the host country and in the world as a whole, if the risks of the project are being assessed. An example of the announcement of sanctions is before everyone's eyes. If the situation is examined carefully, one can accurately predict how well or poorly the economy will develop.

Next, the situation in the industry where the project is expected to be implemented is analyzed while managing risks. An example of this can be the successfully operating enterprises in our difficult conditions of the global crisis and numerous sanctions, where the necessary marketing research was carried out in a timely manner, a detailed analysis of the activities of competitors was made, prices were predicted, their own and foreign technologies were analyzed, and all measures were taken to successfully overcome difficulties in the event of a sudden the emergence of new products from competitors.

The next step is to study the investment project itself, considering it from a production point of view. All possible implementation scenarios are considered and the optimal one is selected, where it is possible to manage project risks. Examples of such work are known to every entrepreneur and project manager, since these are the basics of entrepreneurial activity. However, that's not all. It is impossible to do without a detailed study of commercial and production activities: stocks of materials and raw materials, production technology, as well as sales, production costs and much more.

Specificity and uncertainty

As soon as a project has variability in decisions, as well as in outcomes, it automatically becomes uncertain and risky. Specific examples of project risk analysis need not be given, since each new case is unique, circumstances and conditions develop differently everywhere. Most often, the creators of the project believe that it is not necessary to calculate risks for many years in advance - the future management of the enterprise will worry about this. This is not entirely fair, which means it is wrong.

To complete the analysis of the risks of an investment project, using the example of a specific enterprise, we can only show that in addition to identifying the risks, the measures necessary to minimize them are outlined. Naturally, every enterprise has risks and events that are not similar to those that neighbors puzzle over. However, the concepts are somewhat different from each other. The first is some inaccuracy of information or its incompleteness during the project. Examples usually concern implementation conditions. And risk is the emergence of conditions during implementation that necessarily lead to one or another negative consequences either for the entire project or for its individual participants.

This means that uncertainty is an objective characteristic that affects absolutely any participant equally. It can also be a financial risk for the project. Example: The future price of raw materials is uncertain. This, of course, will affect many project participants to varying degrees: the price, for example, of fuel will force one of them to abandon the project altogether, while the other will still take the risk. Thus, this risk is much more subjective, although the usual uncertainty caused it.

Impact of risk on the project

The risk is necessarily associated with subsequent negative consequences. Examples of risks of a social project (and many others): losses, delays in project implementation, and the like. There is another interpretation: this is the possibility of absolutely any deviations - positive or negative - in indicators from the designed values.

Risk, according to this interpretation, is the possibility of danger, an event that either will happen or not. If this happens, there will be options for consequences: a positive result (for example, profit or any other benefit), a negative result (losses, damage, damages, etc.), a zero result (when the project turned out to be without loss or without profit).

When conducting a financial or organizational threat analysis, identifying project risks is of great importance. An example of the most successful resistance to negative conditions of any kind can only be set by a team where all participants are engaged in documentation, identifying the characteristics of the risks that pose a threat. Moreover, this process continues constantly, at all stages of the project. First of all, an analysis of the documentation is done - project plans, data on previous contracts, etc.). This is where the first and main inputs appear in the analysis.

Almost all project documentation can serve as a source of information regarding risks - from product descriptions and assumption goals to historical data. The method of collecting information that is most effective is used. This could be the Delphi method, brainstorming, various surveys, and the like.

An analysis of checklists is also carried out, which contains a list of risks for such projects. On the Internet, for example, you can find a huge number of them. Next, a register of project risks is formed. The inventory examples contain not only a list of detailed risks, but also a list of possible response strategies if risks are identified. And finally, a final analysis is carried out - quantitative and qualitative.

Risk breakdown structure

To identify risks, categorize them and perform analysis, a hierarchical structure such as a risk tree is used. Examples of risk-managed projects show qualitative analysis, where a full process of identification and systematization is ensured down to the smallest levels of detail and traced connections with other elements of the project. Similar to the work breakdown structure: organizational project management, project cost breakdown, project resources, and so on. Only the elements on the tree are sorted by significance and character.

Modern management of various projects involves the use of standard templates for breaking down project risks. The technology for creating such a risk tree is very similar to the technology for breaking down work. Hierarchical elements are sometimes replaced by a simple list of expected project risks, more often by a not too complex hierarchical structure of two or three levels.

However, the lower level always represents quantifiable risks or a description of the project risks. Examples may show one or more events together, but always with visible consequences. The work tree and the risk tree are developed based on a variety of decomposition bases. These are importance, priorities, significance, the need for deeper analysis, the nature of the consequences, response actions, and so on.

Elements of a Project Management Plan

One of these elements is the project risk register. Examples in business practice can be found everywhere. First of all, it is a document that contains the results of qualitative and quantitative risk analysis, as well as a response plan for their consequences if they occur.

The risk register examines in detail all the proposed hazards, to which their detailed description is attached, indicating the category, cause, level of probability, positive or negative impact on the final goals. Of course, every perceived risk comes with a perceived response. The current state is also indicated there. This is one of the main elements of a project management plan.

Separately, their assessment by the project participants. When large capital investments are made, the level of uncertainty is very high, and probabilistic and statistical methods are clearly insufficient. Moreover, there is still little initial information about the origins of the project and it is very difficult to foresee unique situations.

Risk Matrix

It is at such moments that game theory comes to the rescue; a separate movement of applied mathematics of the early twentieth century is a methodology where the payment matrix is ​​applicable using the ideas and methods of game theory, as well as design. The examples show the same use of elements of applied mathematics.

With their help, optimal solutions are modeled if any uncertainty arises. For example, you can take turns considering the target actions of one side or another, studying precisely its interests, while all sides are in conflict if their goals are at different poles.

This is a very interesting and even fascinating theory, which is constantly used in solving practical problems, a unique method of finding solutions that come from conflicting interests and rational actions.

The first way to classify risks

Risks must be distributed and classified from the very beginning of the process of preparing contract documents and building a business plan. What does it mean to “classify risks”? This is the usual distribution of them according to certain characteristics and criteria into different groups so that the set goals are achieved. For example, it is advisable to share risks, predicting the possible outcome of the impact of each of them on the course of the investment process.

Risks can be pure when the result is zero or negative. This includes disasters such as earthquakes, tsunamis and similar natural factors, fire, flood and other natural shocks, emissions of harmful gas and other environmental disasters, regime change in the country, default and many other political reasons affecting the economy as a whole and business of any level, various transport accidents. Some commercial risks are also classified as pure, for example, theft, sabotage, causing property damage, equipment breakdowns and other production problems, payment delays, delays in the delivery of goods in trade risks.

Another group is speculative risks, they are characterized by the possibility of obtaining both positive and negative results. Financial risks are most clearly represented here, since they are an important part of commercial ones. There is a second criterion necessary for classification. This is the reason the risk arose in the first place. Depending on these reasons, the following types appear: commercial risks, transport, political, environmental and natural.

The second way to classify risks

Another method divides the risks of an investment project into internal and external. The latter are associated with the not entirely stable situation in the economy, as well as the instability of economic legislation, insufficiently favorable investment conditions and the inability to freely use profits. External risks associated with the external economy are created by a situation where trade restrictions may be introduced, borders may be closed, and the like.

There is also a high level of external risks given the uncertainty of the political picture and the possibility of its sharp deterioration. Any change in climate conditions fraught with natural disasters does not depend in any way on the will of the investor. And of course, a huge risk arises when market conditions fluctuate - exchange rates, prices, GDP, and so on.

Internal risks of an investment project can include various factors on a smaller scale, but also with very, very painful consequences. An earthquake does not happen as often as the mistakes of the project participants themselves. For example, if the design documentation is not complete enough or, worse, is not accurate.

There are always technical and technological risks in production - equipment failure, accidents, defects, and the like. If the project team acts the way Pike, Cancer and Swan did in Krylov’s fable, that is, if the initial selection of participants was made incorrectly; If the team has not defined goals, interests are not focused on the main thing, and the behavior of project participants harms the common cause, there is a risk that the set goals will not be achieved.

The risk will turn into a huge disaster if priorities change during the implementation of the project, if support from management is lost. If the business reputation of the team as a whole or of its individual members leaves much to be desired, if there is no accuracy and completeness of financial information, internal risks increase. If product prices or demand, as well as competitors' capabilities, are misjudged, risks are bound to have negative consequences.

Third method of classification

Finally, risks can be classified according to their predictability. There are risks that are outwardly unpredictable and outwardly predictable. The first include unexpected government actions to regulate production, production and design standards, actions in the field of environmental protection, land use, taxation and pricing. And this list can go on for a long time. Of course, natural disasters affect the degree of risk. But more often - crimes: refusal to do work, threats, intimidation, violence, etc.

Unexpectedly, various environmental and social reasons for the emergence of risks occur, threatening negative consequences. Bankruptcies of contractors also occur, due to which the necessary infrastructure for the implementation of the project is not created on time. There are also major mistakes when determining project priorities.

Externally predictable risks also make up a fairly extensive list. An example of the most common possible project risks is market risk, when opportunities deteriorate: when obtaining raw materials, when their cost increases, when consumer requirements change, when competitors strengthen and loss of their own position in the market. Here, too, the list could take a long time.

Operational risks are also quite predictable. Deviations from the main goals often occur and security is compromised. It also happens that certain elements of a project cannot be maintained in working order. The social and environmental consequences of emerging risks are always negative. The danger of deviations of the inflation rate from the values ​​for which the calculation was made is predictable. Quite often nowadays there are changes in taxation that are negative for business.

Conclusions

However, when implementing a project, no uncertainty of conditions is given. Therefore, constant monitoring of the conditions in which the project is being carried out is necessary, it is necessary to adjust data, work schedules, and also carefully monitor the conditions of relationships between project participants. An example of assessing the risks of an investment project is the following situation.

It would be strange to imagine a fire in the company’s office or to plan a sudden refusal to subsidize a sponsor, although in terms of the impact on the business, the consequences of such a risk look scary. The probability is low, the risk is at the “yellow” level. But if the software does not arrive on time, the project will suffer greatly. This happens much more often. The risk level is clearly "red". But the main thing is that this risk can be completely avoided if the project participants work normally. Probability of risk - calculation of the possibility of its implementation from 0 to 100%.

When a project is implemented, one task replaces another, and along with them, the types of risks change. Therefore, analysis should always be present, and the risk map should be transformed as necessary. This is of particular importance at the initial stage of project implementation: the earlier risks are identified, the more opportunities there are to prepare for them. All this reduces losses.

According to the goals of project management, the following typical project risks are distinguished, which are based on the practice of project activities:

· project participants;

· exceeding the estimated cost of the project;

· untimely completion of construction and delay in completion of work;

· low quality of work and facility;

· structural and technological;

· production;

· managerial;

· sales;

· financial;

· country;

· administrative;

· legal;

· force majeure.

The risk of project participants is the risk of conscious or forced failure by participants to fulfill their obligations within the boundaries of the project activity. Such failure by at least one project participant can lead to a “chain reaction” effect, making it impossible for all other project participants to fulfill their obligations. The risks of project participants can be determined by their lack of professionalism, insufficient risk insurance, precarious financial condition, changes in the management of the company (organization), etc. Many other risks of project activities are derived from the risks of project participants. For example, the risk of exceeding the estimated cost of a project may be predetermined by the construction company’s dishonesty, and the risks of delays in completion of work and their poor quality are most often associated with insufficient experience of the selected contractor. The main responsibility for the risk of project participants lies with project managers, who are obliged to:

· ensure a thorough selection of project participants (it is more appropriate on a competitive basis, taking into account the recommendations of independent individuals and organizations, after studying auditor-certified financial reports for several years, statutory documents, information about the managers of project participants);

· provide for penalties in agreements and contracts with project participants for violation of their obligations;

· stipulate the right to promptly replace a project participant in the event of an important violation of his obligations regarding the project or identification of signs of the possibility of such a violation;

· ensure constant monitoring of the financial condition, legal status and other aspects of the activities of project participants;

· warn project participants about their mandatory insurance against risks significant to the project;

· if possible, obtain from the project participants guarantees for the participant’s obligations from a higher-level structure (for example, the parent company, if the participant is a subsidiary).

Risk of exceeding the estimated cost of the project may result from design errors, the contractor's failure to ensure efficient use of resources, or changes in project conditions (for example, price increases or tax increases).

Risk of untimely completion of construction may cause design errors, violation of obligations by the contractor, changes in external conditions (for example, a requirement to close the project for environmental reasons; additional administrative orders from authorities). Delays in the completion of work introduce additional costs: the accrual of additional interest on the loan, the rise in price of work and materials through inflationary price increases. Finally, delays in completion of work can be catastrophic for the project through the termination of contractual relationships with suppliers of raw materials for the future project and with buyers of the future project product.

Risk of poor quality of work and the object may be caused by a violation of the obligations of the contractor or supplier of materials and equipment, errors in design, etc. The consequences of the poor quality of the object may be additional investment costs for the project (to correct defects, in particular the replacement of individual components and units of equipment), additional costs for the production of a project product or even the buyer’s refusal to purchase the product.

Structural and technological risks. Structural is the risk of technical impracticability of a project even at the investment (construction) phase due to errors by the developers of design (technical) documentation, insufficiency or inaccuracy of the initial information necessary for the development of this documentation, and untested construction technologies. The technological risk is considered to be the risk of deviation in the operation mode of an object from the specified technical and economic parameters (increased operating costs, a high percentage of defects, a high accident rate, non-compliance with environmental standards, etc.) as a result of the use of technologies that have not been tested on an industrial scale.

Production risk associated with the possibility of interruptions in the production process. It can be detected in a disruption in the rhythm of production or even in its cessation, failure of an object to reach its designed capacity, an increased level of additional production costs, etc. A type of production risk is technological. Production risk may arise for economic reasons (due to supply interruptions, low quality of raw materials, etc.). An increased level of production costs may be predetermined by errors in cost calculations at the stage of justifying investments in a project, inaccurately defined quality requirements and volumes of necessary raw materials and other resources. Production risks also include geological (the risk of incorrect determination of the volume of mineral reserves, the percentage of useful substances in the soil, the presence of harmful impurities in it, the conditions of occurrence) and environmental (the risk of violation of environmental standards, increased costs for environmental protection, closure of the facility due to environmental character).

Management risk is also considered production, since it is predetermined by the insufficient level of qualifications and experience of management personnel, errors and low level of management at all phases and stages of project activities - pre-investment, investment, production and project closure (especially if an “end-to-end” group of managers has been created to manage the project ).

Sales risk is predetermined by a decrease in sales volumes of the project product (goods, services) and a decrease in its price. This risk is also called the risk of changes in market conditions, marketing or price. Sales risk is especially high for projects related to the release of new products, the prices of which are difficult to predict at the project development stage (industrial consumer goods, science-intensive products, pharmaceutical products). There is a predicted sales risk for exchange-traded goods (raw materials and semi-finished products). The lowest sales risks are for projects whose customer is the state.

The main types of financial risk regarding project activities are credit, currency, interest rate changes and refinancing.

Credit risk- this is the risk of non-repayment or incomplete repayment to the creditor bank of payment obligations by the borrower (project company) under the loan agreement (principal amount, interest, commission payments). This is the main risk of the bank that takes part in lending to the project.

Currency risk arises if the loan currency does not coincide with that received from the sale of the project product. This risk is especially aggravated if the specified product is sold on the local market and on demand from the authorities for the national currency, which tends to depreciate and devalue.

Interest rate risk arises if credit resources with an unstable (changeable) rate are used (in particular, medium and long-term roll-over loans, short-term securities with an unstable rate). If such resources are attracted, there is a danger of increasing the cost of capital used in the project and reducing the profitability of the project.

Refinancing risk arises through the issuance by the main bank - the organizer of financing - of an obligation to provide the borrower with a syndicated loan for a certain amount and difficulties that arise during the next syndication of the loan. This risk is entirely up to the main bank.

State risk is external. It lies in the fact that the socio-political processes taking place in the country and its policies can create difficulties for project activities or make them impossible. State risk factors are the actions of central and local authorities, wars, strikes, social unrest, revolutions, terrorist attacks, inflation, decreased demand for the project product in the domestic market, a general decline in the country's economy, which are entirely or largely outside the sphere of influence of the main participants project. These risks are conventionally divided into political and economic.

Political risks are associated with government actions aimed at limiting or terminating project activities involving foreign investors and creditors. The most radical of these actions is nationalization and expropriation of property. Prohibitions or restrictions on the export of profits abroad, deprivation of foreign capital of previously granted benefits, revocation of concessions and licenses, etc. can also create political risks.

Economic risks are associated with changes in tax, currency, customs or other economic conditions for the implementation of a project that are not officially associated with restrictions on the activities of foreign capital.

Administrative risks are also external. They are associated with obtaining a variety of licenses, permits and agreements from government regulatory and supervisory agencies. These documents are needed at all stages of project activities. For individual projects there can be hundreds of them. And in addition, for an international project, documents are issued by government departments of several countries. In many countries, obtaining licenses (permits, agreements) is often associated with corruption. And this is typical not only for countries that are developing, but also for industrialized ones. Possible refusal to obtain one or another license (permit, agreement), delay in obtaining it, changes in regulatory standards during the implementation of the project (which entails re-issuance of issued licenses or obtaining new ones).

Legal risks to a certain extent related to countries, administrative and managerial. This is revealed, first of all, in the lender’s uncertainty regarding the possibility of implementing the security guarantees behind the loan. The reasons for the uncertainty lie in unclear national legislation and “gaps” in international law, insufficient equal quality of agreements, contracts, letters of guarantee and other legal documents, imperfections of the arbitration and judicial system (unequal access of parties to courts and their corruption, non-recognition of foreign court decisions, low efficiency of execution of court decisions, etc.). Legal risks include any risks that complicate the implementation of the project due to imperfect legislation and international law, frequent changes in laws, low quality of legal documents and shortcomings of arbitration and judicial mechanisms. Project participants do not have the opportunity to control individual legal risks due to the instability and unpredictability of changes in the legislative framework, so they are essentially close to country and political ones. Sometimes certain legal risks can be eliminated in one way or another by involving qualified legal consultants in the implementation of the project, who, if necessary, can assist in resolving disputes between participants in project activities, as well as between project participants and the country’s authorities.

The risk of force majeure (force majeure, natural disasters) is external to project activities. It is associated with such natural phenomena as earthquakes, fires, floods, hurricanes, tsunamis, etc. Certain social and political natural phenomena, such as strikes, uprisings, revolutions, also fall under the category of force majeure. Thus, some of the country risks are risks of force majeure.

Certain types of risks of project activities seem to “overlap” each other (country, political, force majeure). Some of the risks have a pronounced “subordination” - production risks are divided into management, environmental, supply, etc. Sometimes risks may lose relevance due to the implementation of a project in a specific country or a government order for project products. In each specific case, taking into account the industry specifics of the project, its scale, the chosen technology, the country of implementation and other specific features of the project, certain groups of risks apply.

Risk management involves identifying, analyzing and taking action to reduce or eliminate losses faced by organizations or individuals. The practice of risk management uses many tools and techniques, including insurance, to manage a wide range of risks.

Risk of underfunding of the project- the risk of failure by investment project participants to fulfill their obligations to finance the project, including obligations to invest their own funds in the investment project.

Minimization: the financing scheme should be structured in such a way that loan funds are invested last.

Risk of non-fulfillment of obligations by suppliers and contractors: can be expressed in excess of the cost of work, delays in the completion of work, delivery of equipment, failure to achieve the quality parameters necessary to achieve the stated goals of the project (the so-called derivative risks). Risk is also present in the production phase (supplier risk).

Methodology for minimizing risk: careful selection of suppliers and contractors (on a competitive basis). It is also necessary to provide in contracts for penalties, guarantees for the return of advance payments and guarantees for the proper execution of contracts or payment of principal amounts under contracts after the fulfillment of supplier obligations, use various forms of insurance, and avoid intermediaries.

Risk of increasing the cost of the investment project: may be due to both the risk of non-fulfillment of obligations by suppliers and contractors, and errors in design, in assessing the need for working capital, as well as rising prices, taxes, duties and other contract terms, and environmental instability.

Minimization: inclusion of unforeseen costs in the project budget, formation of reserves to finance the growth of working capital needs.

Risk of increasing deadlines: may be due to both the risk of non-fulfillment of obligations by suppliers and contractors, as well as errors in the design (implementation) of work, accidents, changes in the external environment, administrative risks, and risks of force majeure.

Minimization: correct preparation of contractual documentation (sanctions for violating deadlines).

Risk of failure to achieve the specified project parameters: defects in construction and installation work in the supplied equipment, its completeness, discrepancies and inconsistencies that do not allow organizing a normal technological process, reaching design capacity, ensuring proper product quality, etc.

Minimization: in addition to the above-mentioned measures to reduce the risks of suppliers and contractors, if necessary, additional risk control can be carried out by organizing special examinations at various stages of the work (this point is discussed in advance).

Construction risk- the risk of technical impracticability of the project at the investment phase, an extreme expression of the above-mentioned risk of failure to achieve the specified project parameters. The technical impracticability of the project is a consequence of gross errors in the development and design of the project, incorrect choice of project products, basic technologies, and extremely poor placement of the industrial site.

A sign of the presence of risk is the absolute novelty of the project’s products, technology, etc. One should refuse to implement projects that have high design risks.

Production risks- risks of disruption of the normal production process and (or) increase in costs due to technical reasons (technical risk), supply interruptions (supplier risk, transport risk), deficiencies in the extracted raw materials, conditions or production volumes (geological risk), environmental problems (environmental risk ), shortcomings of management (administrative risk), etc. The risk of an increase in current costs may also be due to errors in cost estimates made at the project justification stage, technological errors, possible changes in prices for raw materials and components, etc. There is a risk of an increase in prices for raw materials and components associated with rising exchange rates (for export deliveries).

Minimization: the use of untested technologies should be avoided, reliable suppliers should be selected, where possible and there are significant risks, work out key contracts for the production phase of the project, insure risks, provide for investment costs aimed at reducing harmful emissions, reducing the risk of accidents, be based only on proven mineral reserves, use conservative forecasts of current costs in calculations. The risk is reduced if the initiator of the investment project has extensive experience in production activities and the project does not involve the production of new products for him.

Management risks- possible errors in the management of the enterprise, which will result in failures in the construction of facilities, the acquisition and commissioning of equipment, and in the production and marketing of project products.

There are few effective ways to minimize this risk: this is either careful control over the formation of the project team, or, if this is not possible, refusal to finance a project that has high management risks.

Marketing risk- failure to achieve specified volumes of product sales, specified sales prices, delay in entering the market, low payment discipline.

Minimization: concluding contracts for the sale of products, refusing to finance the project until conducting competent marketing market research, developing a strategy and marketing plan. The initiator of an investment project must soberly evaluate the arguments in favor of the fact that the project’s products will be sold on the terms included in the calculations.

Financial risks- financial problems associated with servicing the debt on the loan provided and other debts during the implementation of the project. Managing this risk includes the possibility of changing the currency of the loan, refinancing the loan from other banks, and changing the sources of funding for the project.

Administrative risks- the risk of non-receipt (non-renewal) of delays in obtaining licenses, approvals, permits and other state regulatory and supervisory authorities, the risk of changes in supervisory and regulatory standards during the implementation of the project, requiring re-issuance of licenses.

Minimization: it is necessary to check the availability of all permitting and approval documentation before starting project financing.

Regional (country) risks- risks associated with the implementation of the project and (or) any project activities in a certain region, country, where events may occur, government decisions may be made that are not controlled by the project participants and negatively affect the project.

Minimization: support from the authorities (participation in financing, guarantees, provision of benefits, comfort letters), refusal to implement projects in regions of increased instability.

Legal risks- risks associated with the imperfection of legislation, the judicial system, the lack of judicial practice on certain issues, the imperfection of the system for executing judicial acts, the possibility of changes in legislation in the course of debt servicing, and shortcomings of legal documents.

Risks of force majeure. Minimization: insurance.

Businesses have several options to manage risk, including:

• avoiding;
• assuming;
• reducing;
• enduring risks.

Avoiding risks or preventing loss involves taking action through methods such as employee training. Or, for example, a pharmaceutical company may decide not to introduce a drug to the market due to the potential threat of possible side effects.

Assume risks simply means accepting the possibility that a loss may occur and being willing to pay the consequences. Risk mitigation or loss reduction involves taking steps to reduce the likelihood or severity of a loss, such as by installing sprinklers.

Transfer of risk refers to the practice of transferring responsibility for a loss to another party in a contract. Also, means of minimizing risks include a penalty (Article 330 of the Civil Code of the Russian Federation), a pledge (Article 334 of the Civil Code of the Russian Federation), a guarantee (Article 361 of the Civil Code of the Russian Federation), leasing (Article 665 of the Civil Code of the Russian Federation), an independent guarantee (Article 368 of the Civil Code of the Russian Federation ) and deposit (Article 380 of the Civil Code of the Russian Federation). Another example is insurance, which allows a company to pay a small monthly premium in exchange for protection against automobile accidents, theft or destruction of property, or a variety of other risks. The ultimate risk management tool (risk retention itself) is sometimes called “self-insurance.”

Thus, effective risk management programs include:

1. cooperation within and outside the organization, overall “team” work to avoid risks;
2. taking into account all the risks to which modern corporations are sensitive and which may affect stakeholders and the company’s activities;
3. insuring the company against the risks of decreased production during crisis situations in the state;
4. ensuring an appropriate development strategy for the company depending on the competitive environment, resources and markets available in different countries, entry modes and other factors;
5. development of the scope of security, detective, and consulting services for business risk management.