Threats to the economic security of an enterprise: risks, sources and factors

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Economic security in today's business world is becoming an increasingly important and multi-purpose component of administrative management. The concept of "security threat" has become volatile: the list of threats constantly includes new items and the old ones cease to be relevant. The fact is that the threats and risks of the security sphere reflect changes in the external environment of the enterprise, which lead to a negative change in the very subject of security. The internal structure and conduct of business are also subject to constant change.

Definitions

"A threat to the economic security of an enterprise is a group of factors in the external and internal environment of an enterprise aimed at creating obstacles and making it difficult to work."

Another definition related to people:

"A threat to the economic security of an enterprise is the actions of individuals or legal entities that violateactivities of the enterprise that can lead it to stop work or other losses."

These dry formulations imply a wide variety of situations: unfair competition, non-fulfillment of contractual obligations by partners, economic crisis, theft within the company, managerial incompetence, etc.

Classification

There are many classifications of threats to the economic security of an enterprise, it all depends on the criteria. The most common version is the classification of threats by their area of occurrence:

• Threats to the whole enterprise: incompetent management, financial bankruptcy, deterioration of reputation.
• Information Threats: Confidential Data Leaks.
• Threats to assets of a material type: damage, loss, complete destruction.
• Threats to intangible assets loss or revocation (licenses, certificates, etc.).

External threats

The threats of this group are extremely difficult to predict and analyze. They are distinguished by their uncertainty, and this is where all the difficulties associated with them lie. External threats can be divided into the following types:

• major and minor;
• objective and subjective;
• controlled and uncontrolled;
• existing in reality and potential;
• random and regular (deterministic).

Environmental factors are a serious threat, they can undermine the work of the enterprise completely and irrevocably. In order to practicereally priority threats and not to waste resources on small and insignificant factors, you need to be able to track and correctly analyze the external environment. This is easy to write on paper, but very difficult to put into practice.

It is almost impossible to identify all environmental hazards with a calculation of probable damage. Therefore, start with those external threats that can be controlled with the help of marketing policy.

List of external threats and destabilizing factors that are possible in principle for any company:

• raider takeovers with intrigues of competitors;
• "greenmails" (raiding "light" in order to receive payments, not to seize property);
• political changes;
• corruption;
• economic crisis and currency collapse;
• Activity of criminal groups;
• theft of assets or intellectual property;
• industrial espionage;
• sale of confidential information to competitors by former employees of the firm;
• violations of officials and law enforcement agencies;
• various kinds of force majeure from natural disasters to terrorist attacks.

Russian additive

The list can be continued, but it is already impressive and very "unpleasant", so let's stop and limit ourselves to a purely Russian "additive" of external threats:

• low level of capitalization of the economic system as a whole;
• high level of monopolization of the main markets in the country's economy;
• expressedimport dependency;
• mainly raw material export format;
• too strict customs restrictions;
• low labor productivity (this threat is both an external and internal problem for companies).

Part of external threats to economic security can be controlled by an enterprise: competently, for example, choose suppliers, come up with new tools for building customer loy alty, determine market segments for planned new products, etc.

But no company will be able to control, for example, government initiatives in tax policy or the so-called restrictive business practices, which need to be told separately.

Restrictive business practice is a fairly new concept. It is associated with monopolistic pressure on partners and consumers with the ultimate goal of limiting competition and seizing a dominant position in the market. A favorite tool of this practice is the tacit barriers that undermine existing business arrangements.

Internal threats

If we group internal threats to the economic security of an enterprise, they will look like this in terms of priorities: personnel, equipment, finance, information.

Internal threats are no less dangerous than external ones. The main and inexhaustible source of internal threats are employees. “Not out of malice, but solely out of ignorance” - this famous phrase can bring security officers tototal desperation, which happens in reality more often than we would like.

For each company, the list of current threats is individual, especially for internal sources. The list of "common" typical sources is as follows:

• sabotage or inaction of employees that interfere with the execution of scheduled tasks;
• information leakage (unintentional or theft);
• undermining the company's business image (more often this is an unintentional threat);
• incompetence of staff and, above all, of management;
• conflicts of different nature and between different parties: from internal between colleagues to conflicts with government officials or partners;
• failure to comply with safety and he alth regulations;
• untrained and low-skilled personnel;
• lack of clear procedures and workflows.

For the attention of the chief executive

Now attention! Of the eight items above, all eight are controllable. This means that internal threats to the economic security of the enterprise are in the area of competence of the first manager. For each item, systemic preventive actions can be taken to minimize at least internal threats. Thus, external and internal threats to the economic security of an enterprise differ in the most fundamental way in terms of controllability and predictability. Everything that can be done to minimize threats must be done. For the most part, this refers to factorsinternal nature.

What is not a threat to economic security

Not every negative event results in a threat to the company. For example, management decisions to reengineer or improve operational efficiency carry certain risks and may result in losses if they fail or if market changes occur. But such actions relate to the fulfillment of tasks and goals, this is the essence of entrepreneurial activity. And it always bears risks and involves a certain share of losses in doing so.

Do not apply to threats to the economic security of the enterprise losses in the marketing decision, for example, a total price reduction to promote a new product. Because it's entrepreneurship again.

It is enough to remember that the main threats to the economic security of an enterprise have three characteristic features:

• conscious selfish character;
• usually there is a purpose - causing damage;
• contradictory actions.

External sources (factors) of threats

There are threats, but there are sources of threats to the economic security of the enterprise. Sometimes they are called factors, which in our context is one and the same. Threats and threat factors are different things, they should be distinguished. Factors are environmental conditions that affect safety in general or its parameters in particular. These are not threats yet, but only their source. Why do they need to know? Then, to track changes in these sources. To analyze and predict them in terms ofeconomic security.

Sources (factors) are also divided into external and internal. External threat sources include:

Market factors

Surges in supply and demand, prices for raw materials and products, dynamics of market capacity, financial condition of counterparties, etc.

Macro factors

The level of economic legislation in the country, monetary policy, foreign economic relations, investment climate, etc.

Other

Demographic picture in the country, crime rate and crime situation, climate, natural phenomena, etc.

Internal sources (factors) of threats

Internal factors that can affect economic security are the most "densely populated" set that any leader of any company should pay close attention to.

Here is their list:

• Financial: firm profitability, return on investment, dividend policy, asset structure, asset liquidity, etc.
• Personnel: the quality of the development strategy, the level of remuneration, social policy, motivation and incentives, etc.
• Production: quality management system, structure of fixed assets, level of operational efficiency, etc.
• Technological: innovation policy, research and analytical components of process technologies.
• Marketing: product line optimality, targeting of consumption groups,customer relationship system, customer loy alty policy, etc.

Financial threats: more than a theft

Financial threats to the economic security of an enterprise deserve special attention and a special explanation. They can be both internal and external. Internal ones are malicious actions of a conscious nature on the part of employees or an organization. Also, poor-quality work of employees of the financial departments of an enterprise or partner organizations can become internal financial threats. This may be, for example, the lack of effective control over the structure of capital investment. Or an incorrectly established ratio of the shares of financial capital according to the risks and incomes of its components.

If we talk about external financial threats, then most often these are force majeure circumstances that belong to an uncontrollable type of threats.

Risk analysis and assessment

Analysis of threats to the economic security of an enterprise should be the main component of all activities of economic security services: this is the only way to build an effective security system that takes into account rapidly changing threat conditions.

This is a systematic collection of data on markets, competitors and other factors with subsequent analysis and forecasting. It is necessary to analyze and evaluate all of the above sources of threats - both external and internal.

The high level of economic security will depend on the status of the followingbusiness components:

• High level of technological base, its competitiveness.
• An effective organization management system.
• Effective HR policy, including strict recruitment criteria.
• Information security.
• Clear legal regulation of all issues related to the activities of the company.

Neglecting the risks and threats to the economic security of an enterprise is like death. On the other hand, the main rules and precepts of economic security are quite consistent with the methods of improving the overall operational efficiency of the company. There are no special additional measures, everything is within the framework of a smart and adequate strategy. And that's great news.