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Operational Risk Essay

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According to Ministry of International Trade and Industry (MITI), Malaysia is among the top 30 largest trading nations in the world, having regional Free Trade Agreement (FTA) as Association of Southeast Asia Nations (ASEAN) member with China, India, Japan, South Korea, Australia and New Zealand, and bilateral FTA with Australia, Chile, India, Japan, Pakistan and New Zealand. Therefore, Malaysian firms have to compete with others on the global level playing field. Malaysia’s economy growth fueling international investments drive to establish in this emerging economy. MNCs establish operations in Malaysia so as not to fall behind competition. Effective financial risk in a multinational corporation (MNC) is critical for the growth in the globalization …show more content…

Marshall (2001) elaborated further that strategic business planning and well-organized budgeting process and consistent follow-up with any operating variances to budget can limit unexpected losses. Risk management is quite a broad concept. Risk management aims to provide an efficient system in order to improve performance, meeting different market conditions and government regulations. Therefore, it is crucial to maintain risk management when keeping a record in the organizations. Risk management and internal control are parts of corporate governance. Though in the past, very few organizations find ERM implementation easy – it requires a rare combination of organizational consensus, strong executive management and an appreciation for various program sensitivities (Negus, …show more content…

The aim of the study is to gain a deeper understanding of how a MNC can utilize risk management and internal control for surviving and performance development. The paper is intended to study the role and importance of an internal control system in good risk management practice. The focus of this study is risk management and internal control of an electronics components manufacturing MNC in a case study. The paper also specifies the geographic area, Malaysia. The study employs internal control as the instrument to manage firm’s risk. The study focuses on how the internal control and risk management strategy be applied in a

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