Application of Bayesian Network Model for Enterprise Risk Management of Expressway Management Corporation Paradee Namwongse 1 , and Yachai Limpiyakorn 2 1 Technopreneurship and Innovation Management Program, Chulalongkorn University, Thailand 2 Department of Computer Engineering, Chulalongkorn University, Bangkok 10330, Thailand Abstract. The enterprise risk management can enhance enterprise value or performance level. During operation, Expressway Authority of Thailand has faced a large number of key risk factors that affect the enterprise performance, such as strategic risks, financial risks, and operation risks. The Bayesian network model is constructed for expressway enterprise risk management and applied to the enterprise risk assessment in this paper. The preliminary evaluation of the model was performed through examples. Keywords: enterprise risk management, expressway enterprise value or performance, Bayesian Networks 1. Introduction Expressway or toll way is one of important infrastructures of countries, including Thailand. The Royal Thai government has realized that expressway networks play an important role in the national economic development, especially in enhancing the logistics systems. However, the investment in expressway projects requires lump sum capital, and it is usually subsidized by the government. In general, the expressway management corporation is responsible for project planning, managing the construction, operating, and maintaining. While the investment amount is huge, the return on investment will be gained after the operation phase. Nevertheless, there are a large number of uncertainty factors or risks that could influence the performance of an expressway enterprise during the operation phase. In order to well manage the expressway operation and increase the enterprise value, it is essential to efficiently discover and manage the enterprise risks via the enterprise risk management (ERM) approach. ERM is the process by which organizations assess, control, exploit, finance and monitor risks from all sources for the purpose of increasing short-term and long-term values for stakeholders [1]. ERM is the proactive approach that involves predicting and managing business risks before the occurrences rather than responding and reacting to the threats after the fact, when the damage has already been imposed [2]. Therefore, an enterprise risk management system associated with a capable enterprise risk assessment model need be established. Due to the problems about the relationship of the risk factors and the subjectivity of risk management, this paper proposes an approach to applying Bayesian Network model for enterprise risk management of expressway management corporations. Bayesian probability theory is a branch of mathematical probability that allows one to model uncertainty and to predict their outcomes of interest by combining common-sense knowledge and observed evidence. After establishing all the variables in a model, one must deliberately associate the variables that cause changes in the system to those variables on which they influence [3]. In general, a Bayesian network describes the joint probability distribution for a set of variables. The network or graph visualization represents the cause-and-effect relations among variables, pointed out by arcs. The degree of relationship is interpreted in terms of conditional probabilities according to Bayes theorem. Bayesian + Corresponding author. Tel.: 662-218-6968; fax: 662-218-6955 E-mail address: Yachai.L@chula.ac.th 260 2011 International Conference on Innovation, Management and Service IPEDR vol.14(2011) © (2011) IACSIT Press, Singapore 260