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Identification and prioritization of factors influencing organization risk tolerance level

Mohammad Khalilzadeh (Department of Industrial Engineering, Science and Research Branch, Islamic Azad University, Tehran, The Islamic Republic of Iran)
Shiba Masoumi (Department of Industrial Engineering, Islamic Azad University, Tehran, The Islamic Republic of Iran)
Isa Masoumi (Young Researchers and Elites Club, Science and Research Branch, Islamic Azad University, Tehran, The Islamic Republic of Iran)

Journal of Advances in Management Research

ISSN: 0972-7981

Article publication date: 5 April 2019

Issue publication date: 8 October 2019

438

Abstract

Purpose

Identifying and prioritizing the risks are considered as critical issues in risk management; otherwise, non-considering the risks will lead to the problems such as delays in project implementation, increased costs, loss of reputation, loss of clients, reduced revenue and liquidity and even bankruptcy. The paper aims to discuss these issues.

Design/methodology/approach

In this paper, the factors influencing the organization risk tolerance level were identified. Then, the factors increasing and decreasing the risk tolerance level were determined by a decision-making model. Finally, a comprehensive model was considered for risk measuring and preparing a risk failure structure chart, in order to determine the factors influencing it as well as the measurement criteria and then they were ranked using the taxonomy method. In this study, the size of the statistical population was 130 (six small and medium manufacturer and service provider companies). Based on Cochran’s sample size formula, 97 questionnaires containing 30 questions were randomly distributed among the population. Validity and reliability of the questionnaire were confirmed. The data were analyzed by SPSS 22.

Findings

Given the hypotheses of this study, the first hypothesis was rejected and the other hypotheses were accepted. The final ranking was done using the taxonomy method; the personality of the project manager was ranked at first; income, credit and capital were ranked second and the number of personnel was ranked third. Moreover, the TOPSIS method was used for ranking to compare the results.

Originality/value

In this research, the identification and ranking of these factors have taken place in several small- and medium-sized organizations; in addition, the rankings are conducted using the taxonomy decision-making method.

Keywords

Citation

Khalilzadeh, M., Masoumi, S. and Masoumi, I. (2019), "Identification and prioritization of factors influencing organization risk tolerance level", Journal of Advances in Management Research, Vol. 16 No. 4, pp. 417-435. https://doi.org/10.1108/JAMR-07-2018-0061

Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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