Exploring risk culture controls: to what extent can the development of organizational risk culture be controlled and how?
Journal of Accounting & Organizational Change
ISSN: 1832-5912
Article publication date: 13 December 2021
Issue publication date: 4 October 2022
Abstract
Purpose
This study aims to explore the controllability of risk culture, identify and categorize risk culture controls used in firms and explore how industry and ownership structure affect the use of different risk culture controls.
Design/methodology/approach
This explorative study is based on 32 semi-structured interviews with 37 participants who are heads of risk management or top managers in German firms from different industries with different ownership structures.
Findings
Interviewees perceive risk culture to be largely controllable. The authors identify a wide spectrum of risk culture controls, ranging from leadership and motivational controls to risk competence controls; in each category, the authors find value-, symbol- and clan-based controls. Leadership controls were most extensively discussed by the interviewees. The use of risk culture controls varied based on industry and ownership structure.
Research limitations/implications
Due to the explorative character of the approach, the authors cannot claim representativeness for the results. The study is limited to one point in time and to a German sample. The findings imply that companies should select risk culture controls according to their own context and that implementation requires support by the top and middle management.
Originality/value
The authors respond to the call for more organizational studies on risk management that consider cultural paradigms (Arena et al., 2010; Mikes, 2011; Power, 2009). The study systematically identifies risk culture controls used in corporate practice and categorizes them. It provides tentative evidence of the relevance of context-specific factors for the use of risk culture controls.
Keywords
Acknowledgements
The authors would like to thank the guest editor, Martin Hiebl, and the anonymous reviewers for their helpful and valuable suggestions for improving the paper. We would also like to thank the participants at the 8th Annual Conference on Risk Governance at the University of Siegen 2020, the participants at the brown bag session at the Department of Accounting, Copenhagen Business School 2019 and all the people who were willing to share their insights with us during the interviews of our study.
Citation
Grieser, F. and Pedell, B. (2022), "Exploring risk culture controls: to what extent can the development of organizational risk culture be controlled and how?", Journal of Accounting & Organizational Change, Vol. 18 No. 5, pp. 752-788. https://doi.org/10.1108/JAOC-11-2020-0189
Publisher
:Emerald Publishing Limited
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