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The new capital accord, otherwise known as Basel II, from the Basel Committee on Banking Supervision, addresses the issue of financial risk. Within the latest version of the new accord and numerous consultation papers, the committee has reinforced its emphasis on risk management, encouraging banks to improve their risk assessment capabilities. Basel II attempts to accomplish this by closely aligning capital with modern risk management best practices, and by ensuring that the emphasis on risk makes its way onto supervisory practices and market discipline. Thus, regulatory pressure is, and will remain over the near future, a key driver of risk management systems development across market, credit and operational risk.

As the end of the 2006 deadline to implement regulatory changes being proposed by the Basel Committee on Banking Supervision looms closer, banks are battling to make their credit risk management systems compliant. But the majority are looking beyond the demands of the regulator. Some are realizing that Basel II provides them with an opportunity to improve their overall risk management strategy, improve business decision‐making, and increase shareholder value.

The purpose of this paper is to provide an insight into the differences in the risk management practices of Islamic financial institutions (IFI) and conventional financial institutions (CFI) in Pakistan.

The study makes use of primary data collection method using a questionnaire survey.

Literature review discovered that the types of risks faced by both types of financial institutions can be classified under six categories. The research concludes that credit risk, equity investment risk, market risk, liquidity risk, rate of return risk and operational risk management practices in IFI are not different from the practices in CFI. Whereas the overall risk management practices of IFI and CFI are alike in Pakistan.

Further research with a larger sample size is recommended.

The paper opens our eyes to the fact that much is unknown about the risk management practices in Pakistani financial system, creating a need for empirical studies for further discoveries to formulate better frameworks and to prevent an impending financial crisis that might be unravelling at the time this paper is being read.

This is the first empirical study of its kind that addresses the unmarked topic of RMP in IFI and CFI in Pakistan. The research was conducted because few studies have been executed to understand differences in the risk management practices in Pakistan, exclusively among Islamic financial institutions. This study is expected to expand the existing literature by providing novel empirical evidence.

The purpose of this paper is to arrive at a general definition of an HPO and a (practical) way to measure an HPO. Managers are looking for techniques to strengthen their organizations in a way that they cannot only cope with threats but could also quickly take advantage of opportunities, and thus, grow and thrive. The academic and especially the practitioner fields reacted on this “thirst for high performance knowledge” with a plethora of books and articles on the topic of high performance organizations (HPOs). These publications each came with their own description and measurement of HPOs, which created a lot of confusion among practitioners.

In this study the following reserach question is answered: how can an HPO be defined and its performance measured? So that with the answer, this paper can take away the aforementioned confusion. This paper does this by conducting an extensive systematic review of the literature on HPO, after which this paper synthesizes the findings into a proposal on how to define and measure the HPO.

This paper was able to obtain from the literature a list of definitions and measurements for an HPO. The common denominator in these definitions and measurements turned out to be respondents given their opinion on the effects of the organizational practices they apply on organizational performance vis-à-vis that of competitors. This paper concluded therefore that an HPO should be defined and measured relative to competitors and should be based on the perception of managers and employees of the organization: An HPO is an organization that achieves results that are better than those of its peer group over a longer period of time.

With the answer on the research question, this paper fills the current gap in the definition and measurement literature on HPOs, and thus, has moved the research into HPOs forward, as researchers can use these research results in their future studies on high performance and HPOs.

Although there is a plethora of literature on high performance and HPOs no univocal definition and measurement of the HPO can be found. This study provides for the first time an academically well-founded definition and measurement method.