The COSO Framework for Internal Control
February 12, 2025
Risk and control self-assessment (RCSA) is an internal procedure used to identify, assess, and mitigate operational risks within a company.1 In this article, we will discuss the purpose and benefits of this process, before exploring the key stages involved in conducting a thorough RCSA. What is the Purpose of an RCSA? Regular engagement in RCSAs […]
Communication plays a crucial role in not only overcoming challenges in leadership but also strengthening the bond among employees. Bosses need to communicate with their subordinates and guide them whenever required. It is essential for the team managers to remain in constant touch with their team members. What are the common problems faced by team […]
The bureaucratic theory of public administration owes its existence to Max Weber and his magnum opus Economy and Society published in 1922. It was Weber who popularized the term and in his book gave a glimpse of the extensive research he had carried out by studying ancient and modern states to understand the working of […]
The question that is uppermost on business leaders’ mind is how to foster an inclusive environment as the current environment in the business world is about not tolerating harassment and discrimination. For instance, in recent years, there has been some high profile cases involving senior management figures in the US and in India in matters […]
Communication plays an important role in negotiation. What is negotiation ? Negotiation is nothing but a discussion among individuals to reach to an alternative which would satisfy all. How is an effective discussion possible ? Only through communication. An effective communication is directly proportional to an effective negotiation. The better the communication is the better […]
The volatility present in the market is always mentioned in a negative manner. However, if one looks carefully at the function performed by market volatility, this negative connotation seems unnecessary. This is because, in the absence of volatility, making profits would also be impossible. It is this volatility, which enables the fluctuation of prices that leads to profits for traders. However, not all firms are able to benefit from volatility. The firm must have some kind of competitive advantage in order to benefit from this volatility. The different types of competitive advantages, as well as the actions taken by firms in order to take risks in a prudent manner, have been mentioned in this article.
Firms developed different kinds of trading strategies in order to ensure that they have a competitive advantage over their peers. Some of these strategies have been mentioned below:
Over the years, it has been observed that some organizations are inherently better at risk-taking as compared to their peers. Hence, their success cannot be completely attributed to the skill of their people. This is because the people have changed over the years, but the organizational culture has not. Some building blocks of organizational cultures which enable better risk-taking have been mentioned below:
Risk management also requires a high level of quantitative skill. However, if the person only has the technical skill and lacks mental toughness, they are likely to get overwhelmed during the decision-making process. Hence, they might end up making the wrong decision.
To sum it up, it can be said that there is an upside to market volatility. There are some firms that have been able to capitalize on it consistently. This is because of their competitive advantage. The organizational culture also plays a huge role in the success or failure of the organization, when it comes to dealing with volatility.
Your email address will not be published. Required fields are marked *