scholarly journals PERFORMANCE MEASUREMENT IN FIRMS WITH DECENTRALIZED RISK MANAGEMENT AND A RISK-AVERSE BOARD

2021 ◽  
Vol 21 (1) ◽  
pp. 5-30
Author(s):  
Marta Michaelis
Keyword(s):  
Risk Management ◽  
Performance Measurement ◽  
Risk Averse

Combined Custom Hedging: Optimal Design, Noninsurable Exposure, and Operational Risk Management

2021 ◽  
Author(s):  
Paolo Guiotto ◽  
Andrea Roncoroni
Keyword(s):  
Risk Management ◽  
Optimal Design ◽  
Operations Management ◽  
Operational Risk ◽  
Financial Derivatives ◽  
Theoretical Ground ◽  
Risk Averse ◽  
Value Assessment ◽  
Operational Risk Management ◽  
Payoff Functions

Optimal Design of Combined Contingent Claims: Theory and Applications. In “Combined Custom Hedging: Optimal Design, Noninsurable Exposure, and Operational Risk Management”, Paolo Guiotto and Andrea Roncoroni develop a normative framework for the optimal design, value assessment, and operations management integration of financial derivatives. Most business and operating revenues entail a mix of financially insurable and noninsurable risk. A risk-averse firm may face them by positioning in a pair of financial derivatives with optimal bespoke payoff functions; one claim is written on the insurable term, and the other claim is written on any observable index exhibiting correlation to the noninsurable term. On a theoretical ground, the authors 1) state the problem in a general setup and prove existence and uniqueness of the optimal pair of combined claims, 2) show that the optimal payoff functions satisfy a Fredholm integral equation, and 3) assess the incremental benefit the firm obtains by switching from the optimal single-claim custom hedge to the optimal combined custom hedge they propose. On an experimental ground, they show that 1) the optimal combined custom hedge would be empirically relevant for a highly risk-averse firm facing a market shock shown during the first period of the COVID-19 pandemic in 2020, 2) integration with the optimal procurement in a generalized newsvendor model leads to a significant improvement in both risk and return, and: 3) this gain can be traded off for a substantial enhancement in operational flexibility.

Evaluating the Effectiveness of Information Security Governance Practices in Developing Nations

2013 ◽  
Vol 4 (1) ◽  
pp. 27-43 ◽  
Author(s):  
Winfred Yaokumah
Keyword(s):  
Risk Management ◽  
Resource Management ◽  
Information Security ◽  
Performance Measurement ◽  
Management Practices ◽  
Strategic Alignment ◽  
Sampling Technique ◽  
Security Governance ◽  
Governance Effectiveness ◽  
Information Security Governance

The purpose of this empirical study is to evaluate the extent to which information security governance domain practices: strategic alignment, value delivery, resource management, risk management, and performance measurement relate to information security governance effectiveness. Random sampling technique was employed and data were collected via web survey from Ghanaian organizations. Employing three multiple regression models, the results showed there were statistically significant positive linear relationship between information security governance domain practices and information security governance effectiveness. Overall, the model produced R2 = .505, indicating that 50.5% of the variance in information security governance effectiveness was explained by information security governance domain practices. The results highlighted resource management, performance measurement and risk management practices as the predictors of organizational information security governance effectiveness while strategic alignment contributed only marginally to the models. Therefore, to attain higher information security governance effectiveness, organizations should focus on strategic alignment between the business and information security attributes.

Performance Measurement and Risk Management Framework of the Enterprise’s Integrated in Logistic Chains in the Context of the Information Society

2015 ◽  
Vol 795 ◽  
pp. 47-52
Author(s):  
Mircea Constantin Duică ◽  
Anişoara Duică ◽  
Iwona Grabara
Keyword(s):  
Risk Management ◽  
Supply Chain ◽  
Performance Measurement ◽  
Supply Chains ◽  
Balanced Scorecard ◽  
Production Systems ◽  
Measurement Techniques ◽  
Product Management ◽  
Frequent Change ◽  
Measurement Framework

The intensified competition, the frequent change of the clients’ preferences and the globalization of the capital, product, service and information flows have turned the efficient product management into an essential factor for increasing competitiveness in production systems integrated in supply chains. In this context, industrial excellence can be obtained only by an efficient process piloting, using some performance measurement systems that permit a good substantiation of the decisions based on correct and reliable information, taking into account the risks specific to supply chains. The paper includes a review of the literature in the field of performance measurement for supply chains to understand the current practice and contributes to the development of the supply chain performance measurement framework using risk management, the case study method, a statistic quantitative data analysis and modern performance measurement techniques such as: balanced scorecard and supply chain operation reference.

scholarly journals Risk Balancing in an Integrated Farm Risk Management Plan

2001 ◽  
Vol 33 (3) ◽  
pp. 413-429 ◽  
Author(s):  
Cesar L. Escalante ◽  
Peter J. Barry
Keyword(s):  
Risk Management ◽  
Financial Risk ◽  
Management Plan ◽  
Optimization Techniques ◽  
Risk Averse ◽  
Simulation Framework ◽  
Integrated Risk ◽  
Management Plans ◽  
Risk Reducing ◽  
Integrated Risk Management

AbstractUsing optimization techniques in a Simulation framework, this study demonstrates the synergy between risk balancing and alternative strategies in effectively reducing risk under changing farm conditions. Highly risk-averse farmers tend to prefer integrated risk-management plans, based on the diversification principle, that yield offsetting combinations of the risk-reducing benefits of most strategies and the profit-generating capacities of the others. The greater appeal of a more diversified plan usually downplays the risk balancing strategy as the farm utilizes credit reserves to implement other production and marketing plans considered essential to Overall risk reduction. The farm, however, still realizes overall, though more regulated, reduction in its financial risk position.

scholarly journals Futures Markets and Firm Decisions Under Price, Production, and Financial Uncertainty

1986 ◽  
Vol 18 (2) ◽  
pp. 39-50 ◽  
Author(s):  
Vickie J. Alexander ◽  
Wesley N. Musser ◽  
George Mason
Keyword(s):  
Risk Management ◽  
Theoretical Model ◽  
Futures Markets ◽  
Theory Of The Firm ◽  
Marketing Strategies ◽  
Financial Risks ◽  
Risk Averse ◽  
Optimal Amount ◽  
Financial Uncertainty ◽  
Fixed Quantity

AbstractIncorporation of futures markets into the theory of the firm under uncertainty has received considerable attention in risk management. A theoretical model of optimal firm decisions in cash and futures markets considering price, production, and financial risks is presented. Production and marketing strategies for corn and soybeans in Georgia and Illinois are analyzed to determine the optimal amount of futures contracting which may be a hedge or a speculative position. A partial hedge is optimal for most situations for risk averse producers when the amount hedged is variable. With fixed quantity transactions, speculative and cash positions, but not hedging, tend to be E-V efficient.

scholarly journals Analysis of the Risk Management Properties of Grazing Contracts Versus Futures and Option Contracts

1996 ◽  
Vol 28 (2) ◽  
pp. 247-262 ◽  
Author(s):  
R. Wes Harrison ◽  
Barry W. Bobst ◽  
Fred J. Benson ◽  
Lee Meyer
Keyword(s):  
Risk Management ◽  
Stochastic Dominance ◽  
Risk Averse ◽  
Integrated Production ◽  
Feeder Cattle ◽  
Option Contracts ◽  
Put Option ◽  
Price Risks

AbstractA stochastic budget simulator and generalized stochastic dominance are used to compare the risk management properties of grazing contracts to futures and option contracts. The results show that the risks of backgrounding feeder cattle are reduced significantly for pasture owners in a grazing contract. However, the risks of the cattle owner in a grazing contract are not significantly reduced. The results also show that generally risk averse pasture owners prefer grazing contracts to integrated production when traditional hedging is used to manage price risks. In addition, grazing contracts compare favorably with put option contracts for some pasture owners.

Sign in / Sign up

Export Citation Format

Share Document