Measurement and Control of Strategic Risk-Taking Capacity

Nowadays internal control is treated the same as risk management and forms an important part of strategic decision making, but putting strategic internal control into practice is difficult. This is mainly because the way to measure risk and the point where to control it are hard to determine. This report suggests to more realistically look at the sum-effect of all risks, from the perspective of finance. A simple model is presented based on system dynamics, giving a complete view of the total financial risk-taking capacity of an enterprise. In combination with a unified organization to coordinate the whole internal control system, this will greatly assist company in achieving its business´ strategic vision.