Vulnerability and the Corporate Immune System: An Integrated and Systemic Approach to Risk Management

Preface
Acknowledgments
The Backstory
Contents
About the Author
List of Figures
List of Tables
Part I Risk Management and Vulnerability
1 From Risk to Vulnerability
	From the Risk Dimension to the Dimension of Vulnerability
	From Economic Vulnerability to Corporate Vulnerability
	The Four Types of Vulnerability
	The Growing Vulnerability of Companies in Contemporary Economic Systems
	Objective and Subjective Management
	The Impact of Vulnerability on Corporate Decision-Making and Strategic Processes
	References
2 The Ant and the Grasshopper—A Business Story
	The Story
	Not All Days Are Sunny
	Enjoy the Sunshine With Me!
	These Pretty Days Are Not So Many, Grasshopper. Soon, the Cold Will Come. We Must Be Ready
	“Come, Friend,” It Called. “There Is Room Here, and There Is Food. I’ve Saved Enough for Many Seasons. Come in and Eat”
	The Teachings of the Fable
	References
3 Everything Is Economics
	It Depends—On the Correct Answer to Economic and Business-Economic Questions
	Opportunity Cost
	Marginal Benefit and Cost
	Cost–Benefit Analysis
	Differential Analysis
	Break-Even Analysis
	Rationality Versus Irrationality
	References
4 Assessing the Vulnerability of a Business: The State of Its Health
	Vulnerability and the Immune System
	Assessing the State of Health of the Company
	The Asset Composition
	How to Read the Balance Sheet to Assess the State of Health of the Company
	The Asset Correlation
	The State of Health of Two Companies: GAMMA and DELTA
	Is It Possible to Reduce the Vulnerability of Company DELTA, and If So, How?
	The Economic Performance
	References
Part II Corporate Immune System
5 The Immune System
	Going Concern Principle
	The Immune System: The Level of Capitalization
	The Immune System: Provisions for Risks and Charges
	Strengthening of the Immune System
	Immune System and Corporate Profitability
	The Meaning of Price
	The Life Cycle of a Company: Accounting Period
	References
6 The Immune System and Corporate Vulnerability
	The Role of the Immune System in Risk Management
	Corporate Vulnerability and Crisis
	The Case of Blockbuster
	Monitoring of the Corporate Immune System
	Why Are Health and Immune System Monitoring Performed with Only Two Indicators?
	The Corporate Vulnerability of Italian Companies: A Practical Case
	Summary Considerations
	References
7 Operational Risk and Immune System
	To Be Profitable
	The Production Capacity
	Technical Efficiency and Economic Efficiency
	The “Kreislauf”
	The Risk of Being Inefficient
	The Double Cost of Technical Inefficiency
	The Economic Impact of Technical Inefficiency on the Immune System
	The Warehouse Is a Tool to Mitigate the Risk of Technical Inefficiency
	Overbooking as a Tool to Mitigate the Negative Economic Impact of Technical Inefficiency
	References
Part III Integration, Classification and Risk Management Activities
8 The Internal Control Risk Management System (ICRMS)
	Risk Perception
	Risk, Uncertainty, and Ambiguity
	From Expected Utility to New Models with Descriptive Approaches
	Risk Aversion
	Loss Aversion
	The Willingness to Risk
	The Internal Control and Risk Management System—ICRMS
	References
9 The Classification of Risks and the Activities that Make up Risk Management
	The Classification of Corporate Risks
	Business and Financial Risks
	Expansion of Production Capacity
	Different Approaches to Risk Management
	The Activities that Makeup Risk Management
	Risk Estimation
	The Collection of Interviews with Managers, Experts, Consultants, Professionals, and Stakeholders
	Identification of Risks and Risk Drivers
	Value at Risk (VaR)
	Summary Considerations
	References
Part IV Practical Experiences
10 Case Studies: Pirelli–NatWest–Eni–Ocado–Ryanair
	Pirelli
		Brief Description of the Company
		The Risk Management Structure
		Risks Identification
		Discussion and Analysis
		Questions
	NatWest
		Brief Description of the Company
		Risk Management Structure
		Risk Identification
		Discussion and Analysis
		Questions
	ENI Group
		Brief Description of the Company
		Risk Management Structure
		Risk Identification
		Discussion and Analysis
		Questions
	Ocado
		Brief Description of the Company
		Risk Management Structure
		Risk Identification
		Discussion and Analysis
		Questions
	Ryanair Group plc
		Brief Description of the Company
		Risk Management Structure
		Risk Identification
		Discussion and Analysis
		Questions
	References
Part V Conclusion
11 “Rational Globalization” and the Search for an Alternative Way Out
	Reference
Index