Enterprise risk analysis in an engineering company with a focus on custom manufacturing

Jaroslav Kollmann (), Jaroslav Kollmann (), Jarmila Straková (), Antonín Korauš (), Mykola Palinchak () and Filip Černák ()
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Jaroslav Kollmann: University of Žilina, Slovakia
Jaroslav Kollmann: Institute of Technology and Business in České Budějovice, Czech Republic
Jarmila Straková: Institute of Technology and Business in České Budějovice, Czech Republic
Antonín Korauš: Academy of the Police Force in Bratislava, Slovakia
Mykola Palinchak: Uzhhorod National University, Ukraine
Filip Černák: University of Prešov, Slovakia

Entrepreneurship and Sustainability Issues, 2023, vol. 10, issue 3, 362-382

Abstract: The study details the outcomes of a scientific experiment analyzing enterprise risks in business processes. Examining and getting rid of enterprise risks is one of the most important management tools when it comes to reaching corporate goals. The new proposed strategy is based on the idea of process risk as a part of putting business processes or operations into action to get results that add value. The actual solution algorithm consists of the quantification of the difference between the level of risk and the enterprise's cost, the development of added value, and the operating profit. The experiment focused on a medium-sized engineering company that specializes in piece production. The principal outcomes of the technique are the realization that a smaller proportion of value added connected with the process results in a reduced degree of risk that is proportional to the cost ratio of the various production process activities. The hypothesis that manufacturing automation reduces risk has not been confirmed. It is advised that businesses document and review the time and cost components of each process on a regular basis. The outputs obtained from the solution demonstrate the suitability of the proposed process, with the outputs' validity demonstrated by repeating the analytical activities and comparing them to the actual occurrence of process risks identified by the model enterprise's managers during the execution of a real contract. The newly proposed method is expected to be appropriate for mass production.

Keywords: production process; business objectives; business process; process risks; risk prediction; risk analysis; added value (search for similar items in EconPapers)
JEL-codes: G32 M11 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:10:y:2023:i:3:p:362-382

DOI: 10.9770/jesi.2023.10.3(24)

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