In a global economic environment, companies most likely to succeed should be, at the same time, big and strong as well as small and flexible. The purpose of this paper is to examine the thesis and the concept of strategic risk analysis of processes regarding the size of corporations and individual companies, both at the level of corporations, where they are mainly based on ownership and legal relationships, and also at the level of companies, where they are based on interests and legal relationships.
The paper examines the strategic orientation of organizations and importance of risk management. The research methodology is based on the analysis of qualitative data collected through surveys. Furthermore, a theoretical framework is introduced based on a study conducted in the transition economy of Slovenia.
Within this framework, there is a constant trade‐off between market (flexibility) and hierarchy (control). It is important to set an optimal structure of internal and external sourcing to lower the risk exposure of organizations. The paper finds that companies in Slovenia, a transition economy within the European Union, often enter contractual relationships without sufficient strategic long‐term assessments and are thus faced with high risks.
The rational control of complex organizations is enhanced demand for cognitive capabilities of employees and process capabilities of computers. The variety of organizations and contingencies is immense; it is therefore possible to determine only some dimensions and generic solutions. Two possible approaches to simplification are dealt with in the paper. Many statements in this contribution should be treated as hypotheses, to be explored in detail, confirmed or rejected.
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