The purpose of this paper is to investigate the relations between perceived business uncertainty (PBU), use of external risk management (RM) consultants, formalisation of RM, magnitude of RM methods and perceived organisational outcomes.
This paper is based on a questionnaire survey of members of the Chartered Institute of Management Accountants in the UK. Using AMOS 17.0, the paper tests the strength of the direct and indirect effects among the variables and explores the fit of the overall path model.
The results indicate significant and positive associations exist between the extent of PBU and the level of RM formalisation, as well as between the level of RM formalisation and the magnitude of RM methods adopted. The use of external RM consultants is also found to have a significant and positive impact on the magnitude of RM methods adopted. Finally, both the extent of RM formalisation and the magnitude of RM methods adopted are seen to be significantly associated with overall improvement in organisational outcomes.
The study uses perceptual measures of the level of business uncertainty, usage of RM and organisational outcomes. Further, the respondents are members of a management accounting professional body and the views of other managers, such as risk managers, who are also important to the governance process are not incorporated.
This study provides empirical evidence on the impact of RM design and usage on improvements in organisational outcomes. It contributes to the RM literature where empirical research is needed in order to be comparable with the traditional management control system literature.
Subramaniam, N., Collier, P., Phang, M. and Burke, G. (2011), "The effects of perceived business uncertainty, external consultants and risk management on organisational outcomes", Journal of Accounting & Organizational Change, Vol. 7 No. 2, pp. 132-157. https://doi.org/10.1108/18325911111139671Download as .RIS
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