RISKS IN THE SHIPBUILDING AND SHIP REPAIR INDUSTRY IN LATVIA
RISKS IN THE SHIPBUILDING AND SHIP REPAIR INDUSTRY IN LATVIA

Summary/Abstract: It is impossible to run business without facing any risk. Improper attitude by the senior management of a company to risks may lead to serious consequences: financial losses, decline in stock prices, and loss of business reputation or even bankruptcy. The task of the research is to assess the situation of risks in the industry of shipbuilding and ship repair in Latvia. The novelty of the research is determined by the fact that for the first time the main risks have been identified and analysed in the industry of shipbuilding and ship repair in Latvia. The object of the research is the most important risks in the shipbuilding industry in Latvia. The goal of the research is to identify, analyse and rank the main risks in the shipbuilding industry in Latvia by the probability of undesirable results and the extent of possible damage. Methods of the research are the analysis of statistical data, systems analysis of shipbuilding industry and its environment. Within the framework of the research, it was found out that most risks in the shipbuilding and ship repair industry in Latvia could be attributed to very small, small and medium risks. There are virtually no risks of a magnitude of 0.6 to 1.0. By the extent of possible losses, risks occupy the entire range of values starting from negligible to catastrophic damage. The final decision on the adoption and optimisation of risks at the companies of the industry should be the prerogative of the senior management of a particular company. Senior management of companies of the industry should devote particular attention to the operation of marketing departments, as their responsibilities include commercial and financial risks. Commercial risks are very small in magnitude, but can have a very large extent of possible damage. Financial risks are large enough in magnitude – to 0.6 and have a great extent of possible damage. It is necessary to devote constant attention to political risks, especially at the international scale, as well as to monitor changes in the tax legislation of Latvia.

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