Title: Process-event method for operational risk assessment at enterprise

Authors: Ekaterina Karaseva

Addresses: Institute of Entrepreneurship Technologies and Law, SUAI, Saint-Petersburg, 194363, Russia

Abstract: This paper proposes a process-event method for quantitative assessment of operational risk in dynamics and calculation of the required economic capital volume. The method is a further development of the traditional process approach to enterprise risk management. The main idea is to describe the process as a chain of random events instead of a graphical description of the process as notations. The ontology of the method includes basic definitions, mathematical foundation and method for calculation the current and integrated operational risk values, the economic capital volume with the upper and lower limits of the reservation. The integrated value of the enterprise's operational risk can be used as a rating indicating reliability of the enterprise. A timeline diagram (process-event diagram) of the event flow is introduced, its features in comparison with PERT and Gantt charts are described.

Keywords: process; event; logic; probability; operational risk; enterprise; management; event flow; event chain; PERT; Gantt chart; assessment; analysis; Karaseva's diagram.

DOI: 10.1504/IJRAM.2022.128708

International Journal of Risk Assessment and Management, 2022 Vol.25 No.1/2, pp.67 - 83

Received: 23 Jul 2020
Accepted: 27 Jan 2021
Published online: 02 Feb 2023 *