Risk management in corporate planning

The risk distribution matrix (RDM) is to be applied in resource allocation and is a means of placing environmental risk in perspective. All forms of business operations should be included so that a company has a comprehensive picture of its commitments in safe, moderate, and high-risk countries. Corporate self-analysis is involved in the first three steps. The fourth step seeks to correct the risk profile through multiple strategies. Many years are likely to be required before a company achieves its desired profit/risk composition.

The advantage of the system is its individualization. Within the general framework given on the preceding pages, companies can make decisions based on factors unique to their industry, current position, preferred position and flexibility within the constraints identified. Ultimately, RDM provides a thorough evaluation system custom tailored to each company, insuring more profitable overseas transactions.