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RISK MANAGEMENT

RISK MANAGEMENT. DECISION MAKING. Submitted by Darrell Boatright Modified by Georgia Agriculture Education Curriculum Office June 2007. DECISION -MAKING. THE KEY TO SUCCESSFUL BUSINESS OPPORTUNITIES. CHARACTERISTICS OF TOP MANAGERS. They are strategic thinkers

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RISK MANAGEMENT

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  1. RISK MANAGEMENT DECISION MAKING Submitted by Darrell Boatright Modified by Georgia Agriculture Education Curriculum Office June 2007

  2. DECISION -MAKING THE KEY TO SUCCESSFUL BUSINESS OPPORTUNITIES

  3. CHARACTERISTICS OF TOP MANAGERS • They are strategic thinkers • They can accurately assess the strengths and weaknesses of people • They operate in a continuous improvement mode • They look at the big picture

  4. The Most Successful Managers • Adapt to the changing needs of their markets • Are open to exploring new ideas • Operate more as resource managers than producers • Realize the importance of networking and developing alliances across the value chain

  5. They are calculated risk takers and excellent risk managers • They spend time on “what if” scenarios and developing contingency plans • They are likely to seek input and expertise from outside the business • They see change and challenges as opportunities and don’t tend to view themselves as “victims”

  6. They see themselves as “Head Coach” rather than “Boss” • Their approach to management is balanced between key performance areas • They spend time on monitoring and analyzing performance • Their decisions are based more on reason and judgment and less on emotion

  7. They are more creative and innovative in their approach to business • They work hard at communication

  8. TOP TEN REASONS WHY FARMERS DON’T MANAGE RISK • 10. There’s no free cap or jacket • 9. I’m waiting for my neighbor to try it • 8. The media created El Nino • 7. Crop failures cause poor marketing • 6. It’s more fun to keep my lender guessing about my ability to repay • 5. I probably deserve a total crop loss

  9. 4. Sleeping too soundly would make my spouse wonder........ • 3. The IRS would take the profits anyway • 2. My children would just fight over the estate • 1. Life would be dull without daily doses of fear

  10. Resistance to change Too many decisions, not enough time Old fears die hard The check is in the mail Ideas that prevent farmers from analyzing risks, developing a business plan, and honing marketing skills

  11. DECISION MAKING FOR THE FARM • DECISIONS ARE USUALLY MADE BASED UPON THE GOALS OF THE OPERATION • (GENERALLY PROFIT)

  12. FACTORS IN MAKING A DECISION • IMPORTANCE • FREQUENCY • IMMINENCE • REVOCABILITY • AVAILABLE ALTERNATIVES

  13. STEPS IN DECISION MAKING • DEFINE THE PROBLEM • GATHER INFORMATION • EVALUATE SOLUTIONS • MAKE DECISIONS • TAKE ACTION • EVALUATE DECISIONS

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