Developing and Implementing a Stochastic Decision‐Support Model Within an Organizational Context: Part II—The Organization

Abstract

Enterprise risk management has been defined as the strategy that aligns the firm's business with the risk factors of its environment in the pursuit of strategic objectives. Mathematical models will always be part of enterprise risk management. By means of a case study, we discuss why it is necessary to align a model with the organization in order to achieve the desired results. The structure of a model's input must fit with the structure of data collection in the firm, and the output must be consistent with the decision structure. Otherwise, data collection will not be properly taken care of and the results of a model will not find their way to where decisions are made.

Citation

HØYLAND, K., RANBERG, E. and WALLACE, S.W. (2004), "Developing and Implementing a Stochastic Decision‐Support Model Within an Organizational Context: Part II—The Organization", Journal of Risk Finance, Vol. 5 No. 2, pp. 58-63. https://doi.org/10.1108/eb022987