Risk in Strategic Management

2021 ◽  
Author(s):  
George M. Puia ◽  
Mark D. Potts
Keyword(s):  
Risk Management ◽  
Strategic Management ◽  
Dynamic Capabilities ◽  
Essential Element ◽  
Operational Risk ◽  
Two Dimensions ◽  
Multidimensional Model ◽  
Strategic Risk ◽  
Risk Environments ◽  
Risk Dimensions

Although risk is an essential element of the business landscape and one of the more widely researched topics in business, there is noticeably less scholarship on strategic risk. Business risk literature tends to only delineate characteristics of risk that are operational rather than strategic in nature. The current operational risk paradigm focuses primarily on only two dimensions of risk: the probability of its occurrence and the severity of its outcomes. In contrast, literature in the natural and social sciences exhibits greater dimensionality in the risk lexicon, including temporal risk dimensions absent from academic business discussions. Additionally, descriptions of operational risk included minimal linkage to strategic outcomes that could constrain or enable resources, markets, or competition. When working with a multidimensional model of risk, one can adjustment the process of environmental scanning and risk assessment in ways that were potentially more measurable. Given the temporal dimensions of risk, risk management cannot always function proactively. In risk environments with short risk horizons, rapid risk acceleration, or limited risk reaction time, firms must utilize dynamic capabilities. The literature proposes multiple approaches to managing risk that are often focused on single challenges or solutions. By combining a strategic management focus with a multidimensional model of strategic risk, one can match risk management protocols to specific strategic challenges. Lastly, one of more powerful dimensions of risky events is their ability to differentially affect competitors, changing the basis of competition. Risk need not solely be viewed as defending against potential losses; many risky occurrences may represent new strategic opportunities.

scholarly journals THEORETICAL BASES FOR BANK STRATEGIC RISK MANAGEMENT UNDER THE IMPACT OF MACRO- AND MICROENVIRONMENT

2014 ◽  
Vol 3 (3) ◽  
pp. 325-330
Author(s):  
Veronika Prosalova ◽  
Elena Smolyaninova ◽  
Olesya Smolyaninova
Keyword(s):  
Risk Management ◽  
Strategic Management ◽  
Financial Management ◽  
Financial Risk ◽  
Banking System ◽  
Legal Framework ◽  
Educational Process ◽  
Strategic Risk ◽  
The Impact ◽  
Performance Research

Purpose of research. The purpose of this research is to examine the theoretical bases for banking strategic risks management through examining the impact of micro- and macroenvironment on the credit performance. . Research method. The authors of this research used such methods as: research and analysis of legal framework, study of In this study, the authors have used such methods of scientific research as the study and analysis of the regulatory framework , the study of monographic publications and articles, analysis. Results. The authors propose to specify the notion of strategic management. Thus the principles of strategic management were developed and specific characteristics of commercial banks financial management have been defined. Besides that the notion of financial risk of the credit organization was specified and new approach to commercial banks’ risk management, based on their origin was developed. Implementation of the results. The results can be used for the publications on different aspects of this topic and in the educational process of the education institutions. Theoretical aspects connected to the difficulty of evaluating banking risks and described in the paper, can be of interest in the process of developing practical measures on preventing or minimizing extent of exposure of the banking system to the risks in general. The main concepts of this research can become a base for further scientific and practical research in the field of rationalizing the banking risks management system.

scholarly journals Strategic management in the process of construction of systems of economic protection of the results of activities of agro-business entities

2019 ◽  
pp. 80-85
Author(s):  
Oksana Makovoz
Keyword(s):  
Risk Management ◽  
Strategic Management ◽  
Economic Security ◽  
Strategic Risk ◽  
Logical Method ◽  
Theoretical Generalization ◽  
Strategic Goals ◽  
Business Entities ◽  
Conceptual Foundations

Purpose. The aim of the article is generalization of the conceptual foundations of strategic management to ensure the economic security of the enterprise in the process of building systems of economic protection of the results of activities of agro-business subjects as an effective mechanism for counteracting external and internal threats. Methodology of research. Scientific methods are used in the writing of the articles, in particular: theoretical generalization – to understand key theories of strategic management; synthesis and analysis – to detail the systems of economic protection of the results of the activity of the subjects of agribusiness as an object of research by its breakdown into parts; abstract and logical method – during the study of the structure of the components of the system of economic protection of the results of the enterprises. Findings. The toolkit of economic protection of agribusiness entities, which can be further transformed and supplemented according to the research of the peculiarities of functioning of their activity in the current market conditions, is investigated. It is substantiated that economic protection of the results of the enterprise activity should include a system of diagnostics and risk management, which will further ensure within the enterprise itself to make prompt decisions on strategic risk management both internal and external environment. The scheme of risk management in the system of economic protection of investment activities of agribusiness entities is proposed. The systems of economic protection of the results of activity of enterprises are improved. Originality. The main criteria of efficiency of economic protection of interests and results of activity of subjects of agro-business in the long term are substantiated: profitability of own capital and economic equilibrium, which characterizes rationality and prudence of management of economic resources and creates a basis for achievement of strategic goals of the enterprise in the long term. Practical value. The introduction of the proposed research results into the activities of agribusiness entities for the use of conceptual principles of strategic planning will contribute to the establishment of a system of economic protection of the results of business activity and dynamic development. Key words: strategic management; risk; threat; protection; result; economic security; management system; enterprise.

scholarly journals Dynamics of the evolution of the strategic management concept: From the planning school to the neostrategic approach

2021 ◽  
Vol 17 (2) ◽  
pp. 7-28
Author(s):  
Tomasz Kafel ◽  
◽  
Bernard Ziębicki ◽  
Keyword(s):  
Strategic Management ◽  
Dynamic Capabilities ◽  
Technology Development ◽  
Two Dimensions ◽  
Theory And Practice ◽  
Research Results ◽  
Main Research ◽  
Management Concepts ◽  
Management Concept ◽  
Selection Of

Purpose: Strategic management has been developing in business theory and practice for over 50 years. Presently, it constitutes the main area of research interest in management science. The contemporary conditions of business operations create new challenges for strategic management, such as the use of dynamic capabilities in strategy building, relational strategies, networking of organizations, technology development and automation of processes, and global strategies. These challenges are often referred to as neostrategic management. The purpose of this publication is to present the findings of research concerning new strategic management concepts and challenges. Methodology: The main research method of this article was a narrative literature review. On the basis of the research, the development of the concepts as well as contemporary trends and challenges of strategic management were characterized. There is also a synthesis of the problems and research results presented in the articles in this special issue of JEMI. Findings: Various schools and approaches to strategy formulation have been created. They indicate different factors that allow for success in strategic management such as: setting long-term goals, selection of programs and their execution plans (planning school); connection of the enterprise with the environment (evolutionary school); focusing attention on competitive advantage and achieved performance (position-based school); focus on one’s own resources and competences (resource school); use of opportunities and creating innovation (simple rules school); selection of the best option and orientation in business management (real options school); or eclectic perspectives, integrating the listed approaches. The strategic management concept has two dimensions. The first dimension is related to the emergence of subsequent, new strategic management concepts, which often hark back to the previous schools and approaches. The second dimension of development applies to operationalization and adjustment of the previous concepts to the changing conditions. Implications for theory and practice: The paper characterizes the research results presented in the articles included in this JEMI issue. They deal with various problems and challenges in the field of strategic management, such as the relationship between market dynamics, market orientation and performance of enterprises; the innovativeness of companies as a contemporary strategic orientation of companies; the strategy implementation and the management of the organization change; problems of strategic management of the development of the city. Originality and value: The problems presented in the study relate to challenges and new concepts in strategic management. They enrich the existing knowledge on the development of strategic management, and also create inspiration for further research in this area.

scholarly journals Effect of Risk Management Practices On Corporate Investment of Financial Institutions in Rwanda: A Case Study of Selected Commercial Banks

2019 ◽  
Vol 4 (4) ◽  
Author(s):  
Emmanuel Byamungu ◽  
Irechukwu Eugenia Nkechi ◽  
Henry Jefferson Ogoi
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Management Practices ◽  
Operational Risk ◽  
Corporate Investment ◽  
Market Risk ◽  
Operational Risk Management ◽  
Strategic Risk ◽  
Strategic Risk Management

Risk management practices are currently a subject of interest and a novel impression beneath research and application by diverse organizations. Nevertheless, there seems much to be debated on this subject in terms of a general strategic risk management practices statement. There is uncertainty like, when there should be a declaration for each principal risk category the organization experiences or should exist a general risk management practices for the organization. A risk management practice is about achieving corporate goals. For many financial institutions (FIs), dual goals exist such as the social and economic perspectives. This study sought to analyze the effect of strategic risk management practices on corporate investment of selected financial institutions in Rwanda. The study aimed at establishing the effect of operational risk management practices, market risk management practices, compliance risk management practices and governance risk management practices on corporate investment in selected commercial banks in Rwanda. The study adopted descriptive research design. The study targeted 95 managers from finance, internal audit, risk compliance and operations departments. The sample size was 77 respondents. The research was conducted using primary and secondary data, which includes survey forms (questionnaires), interviews as well as reports of the targeted institutions. Information for the research were gathered utilizing organized surveys forms that were distributed to the targeted respondents. Narrative information obtained from interviews and open-ended questions in the questionnaire were analyzed using qualitative approaches. Validity and reliability of the instruments were tested using the Cronbach Alpha test retest methods. With the aid of Statistical Package for Social Science version 21.0, both descriptive statistics such as the means, modes, standard deviation, variances and inferential statistics were analyzed. The research revealed that management of operational risk has a constructive effect financial outcomes performance of financial institutions in Rwanda. The study found that there is a correlation between both operational risk management and market risk management and performance of the financial institutions. The research findings revealed that operational risk management (r=0.096, p<0.01), market risk management (r=0.506, p<0.01) and compliance risk (r=0.612, p<0.01) on corporate investments.

scholarly journals Perception of selected strategic management factors of SME in V4 countries

2021 ◽  
Vol 16 (2) ◽  
pp. 437-452
Author(s):  
Jaroslav Belás ◽  
Milan Damborský ◽  
Zdenko Metzker ◽  
Petr Šuleř
Keyword(s):  
Risk Management ◽  
Czech Republic ◽  
Strategic Management ◽  
Empirical Research ◽  
Slovak Republic ◽  
Corporate Management ◽  
Online Questionnaire ◽  
Strategic Risk ◽  
Top Managers ◽  
Management Factors

The objective of the paper was to present current theoretical findings in the area of strategic management of small and medium-sized enterprises (SMEs) in the Visegrad Four (V4) countries. Within the stated objective, the weight of individual strategic management factors was quantified and trends in the Czech Republic were compared with other V4 countries. Empirical research was conducted between October 2019 and March 2020 in V4 countries by means of an online questionnaire. The overall number of accepted questionnaires was as follows: Czech Republic (CR): 454, Slovak Republic (SR): 368, Poland (PL): 364, and Hungary (HU): 399. Questionnaires were completed by company owners and top managers. The empirical research provided several interesting findings. On the one hand, SMEs confirmed that strategic management is an important part of corporate management; on the other hand, strategic management is not implemented in the everyday life of SMEs and is not implemented through action plans and programmes. The level of agreement with the statement that quality strategic management improves the competitiveness of enterprises and their stability in domestic and foreign markets was not very high. Not surprisingly, SMEs have significant weaknesses in monitoring and personal risk management. The research results point to the need for increasing the level of strategic risk management in the segment of SMEs, which is an important factor in improving their competitiveness in a globalizing economic environment.

scholarly journals A Review of Risk Management Planning and Reporting in South Africa’s Public Institutions

2017 ◽  
Vol 15 (2) ◽  
Author(s):  
Tankiso Moloi
Keyword(s):  
Risk Management ◽  
Operational Risk ◽  
Public Institutions ◽  
Active Management ◽  
Management Planning ◽  
Management Software ◽  
Reporting Practices ◽  
Strategic Risk ◽  
Risk Management Planning

This exploratory work attempts to review the risk management planning and reporting practices applied in South Africa’s public institutions by defining variables that were deemed indicators of risk management planning and reporting practices, namely: the timing of the institutions’ strategic and combined assurance planning, documentation and active management of risks appearing in strategic risk registers and operational risk registers and the availability of risk management software (including its nature and usefulness).The results point to the fact that there is confusion regarding the timing of both strategic and combined assurance planning sessions. Some institutions conduct these in the preceding year, whereas others appear to be conducting these during the year of implementation. Results further suggest that the practice of implementing combined assurance has not yet been embedded in the majority of public institutions, pointing to uncoordinated assurance activities that could lead to ‘assurance fatigue’. Results further point to the fact that there are still public institutions that are unable to prepare the strategic and operational risk registers. This raises the question of how these risks are managed if they have not been measured and documented.

Using risk connectivity and contagion to add value – how analytics are revolutionising the approach to risk

2018 ◽  
Vol 58 (2) ◽  
pp. 621
Author(s):  
Caron Sugars
Keyword(s):  
Artificial Intelligence ◽  
Decision Making ◽  
Risk Management ◽  
Competitive Advantage ◽  
Network Theory ◽  
Operational Risk ◽  
Risk Profile ◽  
Risk Profiles ◽  
Strategic Risk ◽  
Asking Questions

Companies are seeking more agility in how risk is managed. Businesses need a real-time view of risks underpinning decision making and, in an increasingly connected world, they want to plan for what is on the horizon to create competitive advantage. Management and boards are also asking questions about how strategic risks focus on, compare against and map to the well-grounded operational risk profile. Applying network theory, analytics and artificial intelligence creates an opportunity for risk management to drive strategy, reduce costs and add rigour to decision making. The significant competitive advantage gained through thinking about risk differently and incorporating greater focus on emerging risks can establish the resilience needed in a rapidly changing world. This paper considers how resilience, profitability and ultimately competitiveness can be enhanced through the application of technology, analytics and network theory to understand the interconnectivity, contagion as well as aggregation of risks and mapping of operational risk profiles to strategic risk profiles.

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