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1 – 10 of over 10000Mohammad Khalilzadeh, Shiba Masoumi and Isa Masoumi
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…
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.
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Ohoud AlMunthiri, Shaker Bani-Melhem, Faridahwati Mohd-Shamsudin and Muhammad Mustafa Raziq
Although the innovative behaviour of public employees is critical for the creation of public value and meeting of public interests, the authors are uncertain about the role of the…
Abstract
Purpose
Although the innovative behaviour of public employees is critical for the creation of public value and meeting of public interests, the authors are uncertain about the role of the human resource (HR) system in affecting individual behaviour as past studies tended to discuss innovation at the organisational level of analysis. Based on corporate human resource management (HRM) literature, the authors draw from the ability-motivation-opportunity (AMO) model to examine the influence of innovation-based HR practices on work-related risk propensity and innovative behaviour and the moderating role of perceived error tolerance of public sector organisations.
Design/methodology/approach
Dyadic data were collected from supervisors and their subordinates in various public sector organisations in the UAE. The authors collected valid responses from 100 managers and 200 employees.
Findings
This study's findings demonstrate that the HR system in the public sector shapes employees' behaviour at the individual level of analysis, consistent with the corporate HRM literature. The authors reveal that innovation-based HR practices significantly promote employees' innovative work behaviour because they trigger their inclination and disposition to take risks. Furthermore, the authors provide evidence that such risk-taking propensity at work is heightened under the conditions of a high level of error tolerance by the organisational management.
Practical implications
This study's findings point out the importance of implementing innovation-based HR practices, such as recruitment, reward and training, to drive public sector employees' innovative work behaviour as they could galvanise their risk-taking propensity and, subsequently, innovative behaviour. Public sector managers also need to develop an innovation culture tolerant toward employees' mistakes to further foster employees' work innovativeness. Policy wise, this study's findings could be integrated into the national innovation strategy to drive the national growth in the UAE.
Originality/value
This study sheds light on the drivers behind innovative behaviour among public employees, which is a less researched area, especially in a non-Western context.
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Thomas Keil, Pasi Kuusela and Nils Stieglitz
How do organizations respond to negative feedback regarding their innovation activities? In this chapter, the authors reconcile contradictory predictions stemming from behavioral…
Abstract
How do organizations respond to negative feedback regarding their innovation activities? In this chapter, the authors reconcile contradictory predictions stemming from behavioral learning and from the escalation of commitment (EoC) perspectives regarding persistence under negative performance feedback. The authors core argument suggests that the seemingly contradictory psychological processes indicated by these two perspectives occur simultaneously in decision makers but that the design of organizational roles and reward systems affects their prevalence in decision-making tasks. Specifically, the authors argue that for decision makers responsible for an individual project, responses given to negative performance feedback regarding a project are dominated by self-justification and loss-avoidance mechanisms predicted by the EoC literature, while for decision makers responsible for a portfolio of projects, responses to negative performance regarding a project are dominated by an under-sampling of poorly performing alternatives that behavioral learning theory predicts. In addition to assigning decision-making authority to different organizational roles, organizational designers shape the strength of these mechanisms through the design of reward systems and specifically by setting more or less ambiguous goals, aspiration levels, time horizons of incentives provided, and levels of failure tolerance.
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Kent Eriksson, Cecilia Hermansson and Sara Jonsson
This paper investigates the viability of the relationship-oriented business model. Specifically, it examines the effects of bank customers' satisfaction, loyalty, and trust in…
Abstract
Purpose
This paper investigates the viability of the relationship-oriented business model. Specifically, it examines the effects of bank customers' satisfaction, loyalty, and trust in bank advisors on two client-level performance measures; client-level non-interest revenue, and client-level revenue on net interest spread. It further investigates how effects are moderated by differences in clients' risk tolerance and financial literacy.
Design/methodology/approach
The findings are based on analyses of a data set that combines survey data (collected from 13,525 bank clients in 2013) with bank record data from each respondent. The cross sectional data is analyzed using OLS-regression and structural equation modeling.
Findings
Overall, the findings are that the relationship banking model generates non-interest revenue, but not revenue on net interest spread. In more detail, findings show that trust has a positive direct effect on client-level non-interest revenue. Furthermore, trust mediates the entire effect of satisfaction and loyalty on client-level non-interest revenue. Customer satisfaction and loyalty do not lead to enhanced client-level non-interest revenue if there is little trust in bank advisors. Findings further show that the relevance of trust for non-interest revenue is higher for clients with high risk tolerance and high financial literacy. Satisfaction, loyalty, and trust have no effect, however, on client-level revenue on net interest spread.
Originality/value
While previous literature mainly has used subjective intentions (e.g., repurchase behavior) as operationalization of performance, this paper combines subjective survey data and objective performance data, allowing the investigation of how the customer relationship model affects actual performance. Furthermore, the paper investigates the relational banking model's effect on non-interest and net interest spread revenue, and we show that the relational banking model generates only non-interest revenue, and not net interest spread revenue. The fine-grained client-level data also allows the investigation on how the effect of trust on client-level performance differs among client groups with different cognitive characteristics (i.e., risk tolerance and financial literacy).
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Alasdair Marshall, Udechukwu Ojiako and Maxwell Chipulu
Risk appetite is widely accepted as a guiding metaphor for strategic risk management, yet metaphors for complex practice are hard to critique. This paper aims to apply an…
Abstract
Purpose
Risk appetite is widely accepted as a guiding metaphor for strategic risk management, yet metaphors for complex practice are hard to critique. This paper aims to apply an analytical framework comprising three categories of flaw – futility, perversity and jeopardy – to critically explore the risk appetite metaphor. Taking stock of management literature emphasising the need for metaphor to give ideation to complex management challenges and activities and recognising the need for high-level metaphor within strategic risk management in particular, the authors propose a means to scrutinise the risk appetite metaphor and thereby illustrate its use for further management metaphors.
Design/methodology/approach
The authors apply a structured analytical perspective designed to scrutinise conceivably any purportedly progressive social measure. The three flaw categories are used to warn that organisational risk appetite specifications can be: futile vis-a-vis their goals, productive of perverse outcomes with respect to these goals and so misleading about the true potential for risk management as to jeopardise superior alternative use of risk management resource. These flaw categories are used to structure a critical review of the risk appetite metaphor, which moves towards identifying its most fundamental flaws.
Findings
Two closely interrelated antecedents to flaws discussed within the three flaw categories are proposed: first, false confidence in organisational risk assessment and, second, organisational blindness towards contributions of behavioural risk-taking to true organisational risk exposure. A theory of high (over-optimistic, excessive or inappropriate) risk-taking organisations explores flaws within the three flaw categories with reference to these antecedents under organisational-cultural circumstances where the risk appetite metaphor is most needed and yet most problematic.
Originality/value
The paper is highly original in its representation of risk management as an organisational practice reliant on metaphor and in proposing a structured means to challenge it as a dominant guiding metaphor where it has gained widespread uncritical acceptance. The discussion is also innovative in its representation of high risk-taking organisations as likely to harbour strong managerial motives, aptitudes and capacities for covert and illicit forms of risk-taking which, being subversive and sometimes reactionary towards risk appetite specifications, may cause particularly serious futility, perversity and jeopardy problems. To conclude, the theory and its implications are summarised for practitioner and educational use.
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Liana Holanda Nepomuceno Nobre, John E. Grable, Wesley Vieira da Silva and Fábio Chaves Nobre
The purpose of this paper is to establish a conceptual model for managerial risk taking that considers objective measures related to an organization’s characteristics and…
Abstract
Purpose
The purpose of this paper is to establish a conceptual model for managerial risk taking that considers objective measures related to an organization’s characteristics and subjective factors related to a decision maker’s profile.
Design/methodology/approach
A multilevel process-centered managerial decision-making framework was developed based on previously published risk taking models. The framework accounts for the conflict between agents and principals, as well as the macro- and micro-level environments in which risky decisions are made.
Findings
The integrative model presented in this paper provides a theoretically robust tool that can be used to further explore the interrelationships among known risk concepts that influence decision making in corporate settings.
Research limitations/implications
The present research is a conceptual model for managerial risk-taking. Further research is needed to test the linkages and propositions within the model, developing measures of the constructs and empirically testing the relationships among the dimensions of risk.
Practical implications
The proposed model can help firms define what manager profile is most suitable in terms of a match to the company’s investment strategy.
Originality/value
This paper is theoretically valuable in describing the relationships among several elements of risk: risk need, risk capacity, risk profile, risk perception, and risk tolerance. Future directions for empirical research are also presented.
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Lutfihak Alpkan, Cagri Bulut, Gurhan Gunday, Gunduz Ulusoy and Kemal Kilic
The main purpose of this paper is to investigate the direct and interactive effects of organizational support and human capital on the innovative performance of companies…
Abstract
Purpose
The main purpose of this paper is to investigate the direct and interactive effects of organizational support and human capital on the innovative performance of companies. Individual effects of the organizational support dimensions, namely: management support for generating and developing new business ideas, allocation of free time, convenient organizational structures concerning, in particular, decentralization level or decision‐making autonomy, appropriate use of incentives and rewards, and tolerance for trial‐and‐errors or failures in cases of creative undertakings or risky project implementations, are also to be investigated.
Design/methodology/approach
The study develops and tests a theoretical research model where the organizational support dimensions are the independent variables, innovative performance is the dependent variable, and the human capital has a moderating role in this relationship, via a questionnaire study covering 184 manufacturing firms in Turkey.
Findings
Among the individual direct effects of the dimensions of organizational support, management support for idea development and tolerance for risk taking are found to exert positive effects on innovative performance. Availability of a performance based reward system and free time have no impact on innovativeness, while work discretion has a negative one. As for the role of human capital (HC), it is found to be an important driver of innovative performance especially when the OS is limited. However, when the levels of both HC and OS are high, innovative performance does not increase any further.
Originality/value
Two distinct research streams, namely organizational support literature and human capital literature, have already focused on their individual impacts on the innovative performance. However, a combination of these separate streams was not tried before. The paper discusses and investigates what will happen when both positive drivers interact with each other. Moreover, it also investigates how organizational support and human capital are complementary.
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Ronald William Eastburn and Alex Sharland
This paper aims to determine why so many banks do not recognize in a timely manner the inherent risks and imbalances with their risk/reward decision trade-offs, to elevate the risk…
Abstract
Purpose
This paper aims to determine why so many banks do not recognize in a timely manner the inherent risks and imbalances with their risk/reward decision trade-offs, to elevate the risk conversation by embracing a more strategic and adaptive behavioral perspective and to show how an effective risk management organizational mindset is a definite solution for mitigating risk.
Design/methodology/approach
A direct-mail questionnaire survey was designed with the unit of analysis US community bank (under US$1.5bn in assets) and its risk performance. We used quantitative methods using previously tested scales for main constructs and FDIC bank data for performance measures. To gauge the models capacity for determining discriminatory value, results were also measured against relative peer financial performance.
Findings
The findings established that an effective risk management process that assimilates risk tolerance, risk propensity and risk practices into a managerial mindset offers a sound solution for mitigating risk. By envisioning risk as a “conceptual model of thinking” and interpreting it as a “predictable business process”, and by offering specific “decision enablers” that complement the corporate mindset, it creates a safety net against unsafe risk practices. As a result, it allows for an appreciation that current financial performance is a direct measure of management’s risk decision capabilities.
Research limitations/implications
The sample size (n = 151), although adequate for our purpose was relatively small, was restricted to US community banks (less than US$1.5bn in assets) and single-informants (CEOs), thereby providing a somewhat narrow focus. Also, the survey was conducted during a slow economic period, and results may be different during a growth period. We see ripe opportunity for further research, especially related to money-center and regional banks and the next level of management as well as the behavioral influences that frame the risk/reward opportunity. Research on other industries, small businesses, etc., would be valuable because risk permeates all decisioning.
Practical implications
From a practitioner perspective, providing guidance on risk oversight allows for improved financial performance. The findings should be of interest to financial industry leaders, policy makers and regulators as understanding how an active orientation of risk tolerance, risk propensity and risk practices are coordinated across the organization is vital. Also, managers need to understand how characteristics of risk management manifest itself within their organization in terms of productivity and financial performance.
Originality/value
This paper is the first comprehensive empirical study that incorporates a conceptual approach that uses outcome history, behavioral influences and operational dimensions to identify risk management capabilities in community banks designed to increase risk/reward awareness.
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