Risk Management in Investment Banking and Software

Risk Management in Investment Banking and SoftwargonIntroductionWith the current scene in the business human race it is in truth ch altoge on that pointnging to explore the jeopardys complicated in the business scrimping. The topic of Risk Management interests with the varied challenges as it has become the foundation for many organisations to efficaciously manage their investments or bem manipulations.The guesss involved in any type of organisations are constantly increasing with the rise in competition across the globe. The recent character reference crunch was also an alarming sign to manage the adventure efficiently. Development of technology also has had great impact on the performance of any scientific projects. Thus the topic of risk focusing is gaining lot of scope across various sectors in diversified businesses in todays world. So being the display case, Indian economy is no exception to the above mentioned threats for the organisations to successfully achieve their goals and objectives.Conceptual UnderpinningsMy interrogation is meand on whether the Risk Management is use as a calamus for checking quality, accessing security take aim, as a measuring unit as controlling tool. To check whether theories on Risk Management, really help in understanding and analysing the risks involved in todays business scenario. Also to check the practical and technical difficulties in introducing risk heed as a control tool in all possible arrays of business and development. While risk counselling offers accountable benefits it also involves costs, the cost of implementation of Risk Measures into the organisation structure, the process and also to make it a part of the organisational planning process in order to achieve objectives at minimal risk levels. Hence it is necessary and vital to pass a world-wide Risk Management Strategy for every organisation. In order to accomplish each and every organisation needs to switch a dedicated group dependi ng on the nature of their business, organisational structure, and also possible risks to be involved.2.1) Literature ReviewThe Indian Economy has been impacted with the downturn of the recession. As the effect of recession there is tremendous amount of change in the outlook of the business world. Today Management of Risk is a critical issue for organisations to minimise the level of risk they would be witnessing while involving in the business practices. Risk is al ways associated with uncertainty, even in our everyday activities. But we over comes these risk with our knowledge and experience by taking effectives measures to protect ourselves from these find of risks. Similarly, organisations have to consider the risks and uncertainty more strategically as they leave be involving in huge business associations which efficacy have an impact on large number of organisations and individuals. At most importance should be given to in order to avoid the disturbances from these risks or set up of these risks. Determination of these risks is critical and essential to implement Risk Management in any organisation. Smith (1995) states that risk management is an essential part of any project or business and constitutes to be an indispensable part of organisational planning.2.2) Risk Management as an effective tool for organisations successDuring the early 70s risk management had very little scope and its effects on projects and business were ignored because they were not recognised as serious threats for organisations (Merna and Al-Thani, 2008). Organisations were ignorant about the risk involved in any business process or project and hence risk management had less scope to be apply. Later on with the development of witness risk management, in early 80s risk management was acknowledged as a specific topic in the project management literature (Artto, 1997 cited by Merna and Al-Thani, 2008). The awareness towards risks gave room for risk management to emerge as an eff ective tool for organisations success.Since then Risk management continues to evolve in many ways in many fields. It has emerged as a crucial aspect for business today. It has been developing steadily and haveing great importance in the business world. Today the use of risk management theorys by the corporate managers have increased to a great extent and most of the organisations will have some kind of risk control measures and risk management policies this clearly shows that risk management is undoubtedly beneficial to the organisations. (Tufano, 1998) Successful organisations All over the world would have well incorporate risk management programme, they also recognise and identify the risks and admit that risks occur and it must be addressed. (Hiles 2007)2.3) Risk and UncertaintyRisk is always associated with uncertainty. As identify by Bussey (1978), any decision which has a variety of outcomes is said to be subjected to risk and when probabilities can be linked to the outcome . In other words risk is the possibility of something undesirable happening. Many people think risk in terms of three main components bad happening, the chances of it happening and the consequences if it does happen. (Merna and Al-Thani, 2008). According to Merrett and Sykes (1983) uncertainties come into calculate when the there are more than one options for any course of action. However some authors feel that risk and uncertainty can be employ interchangeably.Risks and uncertainties are common for all organisations irrespective of the organisations structure and their area of expertise however, these risks are product or service specific. The nature of risk and the extent of damage or success and the result may change over duration but risk itself cannot change. (Gordan 1992) In other words the effect of such(prenominal) risks and uncertainties differ from manufacture to industry and from organisation to organisation. Even with in a corporate organisation we may observe vario us sources of risks in different levels of the organisation. Some of such place sources are political, financial and legal risks at the corporate level, Economic and market risk at strategic business level and risks at project level may be precise to that particular project like Technical risks of a project. (Merna and smith 1996, cited by Merna and Al-Thani, 2008)Different organisations employ different approaches for identification of these risks and uncertainties. In order to identify these risks different methods of risk management are implemented to minimise these risks.After analysing the threat to the organisations from such risks they identify Organisations are extensively implementing the concept of Risk Management into their organisational culture. Though this process is time consuming it is onetime investment. It also involves considerable amount of capital investment.Investment banking is an industry which is known to have the maximum risks involved. Banking by itself is risk oriented business. The nature of investment banking business is volatile and they have to implement a comprehensive risk management scheme as it deals in the instruments which are highly volatile in the market. These risks have to be effectively managed for the smooth running of the organisation.So is the case with the Information or parcel industry. Software industry is no exception to risks though the nature of the business is not volatile they also involve lot of risks. These risks also have to be managed and addressed efficiently, to make sure it does not hamper the organisational growth. There will be a lot of system related risks and risk of manipulation, duplicate and theft of the software, copyright and patents risks, technological risks and few others.The risks involved in these two industries are important, and have to managed to minimise their risks and maximise the opportunities for the organisations growth. My search is to know whether the risks involved in the above two industries are indifferent or similar. And also to identify whether risk management is being implemented in these industries as an effective tool. If it has been implemented what is the role of risk management in these industries.Aims and ObjectivesThe research intends to concentrate on these two industries i.e. Investment banking and software industry to find if the amount of risks involved in these two industries.The research would also look on the risk control measures taken by these industries, their perspective of looking on to the risks their risk assessment and management methods and techniques.The researcher will be tar queering two specific companies from twain the industries and identify their risk management tools in their business. Whether it has helped them outstrip these risks and to what extent they were successful in their attempts.What would be the scope for improvement for risk management in these industries? And mastermind research on these organ isations to analyse if risk management has to be made mandatory for such organisations.The companies that would consider in the research are Australia and New Zealand Banking Group Limited (ANZ) which is one of the top players in investment banking sector, and Sonata Software Limited for software industry.3.1) search TopicsImplementation of risk management as a control toolIs Risk management Organisation or industry specific?Comparative synopsis of Risk and risk management in these sectors,Impact of risk and its management on business3.2) Scope of StudyThis research will be fact-finding in nature which will be carried out on two companies Australian and New Zealand Banking Group Limited ANZ and Sonata software Ltd in a case depicted object format, the information collected will be specific to these two companies and of sample size. A minimum of four managers in risk management will be contacted and they will be a part of this research.This research would be restricted to moreov er two industries (Investment banking and Software industries) as the objective of the research is to study the risk involved in these two industries.Research StrategyResearch can be defined as a process undertaken to find out things collect data and interpret it systematically thereby increasing their knowledge. The research has to be based on logical findings and logical relationships and not just assumptions, and the methods used to collect such date should be meaningful (Saunders et al 2009). In layman terms research means searching for desired information from a reliable source and analyse that information to go down on a conclusion for a research question. For this research techniques like qualitative data collection, desk study and interviews would be conducted.4.1) Qualitative ResearchThe research would be based on qualitative method of collecting data, qualitative research is an approach to study a mixer observable fact and it is realistic interpretive and grounded in t he lived experiences of people their individual opinions and feelings. (Marshall and Rossman 2006) the data collected with this approach is non numeric data and is expressed through words. The data collected through qualitative research cannot be used directly, it has to be analysed in the beginning using it in the research. An effective qualitative research must be interactive and interpretive. It should use various methods to get the information and should be related to the context.4.2) Case studyCase study is a descriptive research which refers to meeting place of thorough information of a corporate it refers to collecting all the detailed information of a particular firm and focus on the characteristics and factors of that corporate jumper lead to its success or failure. The research intends to look at a case study of one corporate in both Investment Banking sector and software industry. The research concentrates on Australia and New Zealand Banking Group Limited (ANZ) and Son ata Software Limited and analyse the various risk involved in both the companies and how they are effectively managed.4.3) SamplingTop managers, senior risk managers and people involved in the risk management process of the above mentioned companies will be targeted for this research and interviews would be conducted as a part of sampling technique to get the desired data. In the process of research a minimum of two persons responsible and on the job(p) in risk management process of both the companies would be done. The interviews would be conducted based on the persons availability and accessibility.Data collection5.1) Primary Data mingled semi-structured interviews would be conducted to collect primary data, the interviews would be recorded. These interviews would be conducted with risk managers and employees responsible for the assessment and management of risk. Permissions and authorisations will be taken from the people interviewed and from the management before conducting the interviews. The interviews will be done personally or through internet also telephonic interviews if necessary. The questions asked in the interview will be clear and self-generated to get clear answers to questions.5.2) Secondary DataThe data which is already available and published which can be used as useful information to our research is called as secondary data these are the data which is already researched by other researchers and is easily accessible. Risk involved in business and risk management has a vast literature and evolution of risk and its management is was there from many decades and hence a lot of information is readily available in various sources, this information will also be taken in to consideration in this research and there is no need to start the research on risk management from the scratch. The secondary data will be collected from various books, journals on risk management other online data base like EBSCO, JSTOR and other trusted sources, also the compa ny websites would be used to get company specific information. This information would be extensively used in discussing the literature on the topic chosen.5.3) Data AnalysisThe data collected from the interviews will be transcribed and assessed, analysed and interpreted in order to use it in the research, pie charts and graphs would be used if necessary to understand the risks involved and the methods and techniques used to manage the risks. The data collected through secondary data sources would be thoroughly examined and only relevant and reliable date will be included in the research. Data analysis would be done in an effective way to draw proper information and to arrive at a effective conclusion.5.4) Reliability and ValidityReliability and validity is one of the important aspect of any research study, the data obtained must be valid and reliable. In this research there are a certain issues relating to reliability and validity like the information obtained may not be in detail a s the risk management procedures of an organisation is very confidential and may not be disclosed to everyone, to overcome this the researcher may promise the organisation that the information obtained will not be disclosed to any one and will only be used to this research only. The data collected through interviews will be subjective.The reliability and validity of data will also be influenced by factors like time and place, and the conclusions drawn from the research would be the interpretations made by the researcher.5.5) AccessTo start any research one important factor to be remembered by the researcher is getting access to the information infallible. As there is already a lot of literature on risk in business and risk management there will not be much hindrance in getting the secondary data however the researcher has to get access to obtain the primary data. The research concentrates on two organisations and the researcher has gained access in Sonata software limited and Austr alia and New Zealand Banking Group Limited (ANZ) to do case study on their organisation and to interview people responsible for identifying and managing the risks. However there is a risk involved in this as they may deny providing the required information as it may be confidential and to overcome this risk, as a back up the researcher can also try and get access to do a case study on Deutsche Bank as well.Possible chaptersIntroductionReview of the Literature Risk involved in todays business world And the steps and techniques used to manage those risksIntroduction to companies chosen for the case study and their risks and managementComparison of risk involved in both the companiesAssessment of the researchConclusionGantt chartTARGET DATETASKS TO BE ACHEIVEDMarchSubmission of ProposalAprilCollecting Data and conduct researchJuneConduct Interviews and Collect Data + Write up of Literature ReviewJulyAnalysis of Data + Submission of First DraftAugustSubmission of Dissertation