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Article
Publication date: 4 May 2012

Todd H. Kuethe and Mitch Morehart

The purpose of this paper is to measure the profit impacts of adopting input and output risk management tools at the farm level.

Abstract

Purpose

The purpose of this paper is to measure the profit impacts of adopting input and output risk management tools at the farm level.

Design/methodology/approach

The analysis examines three years of farm‐level data from the Agricultural Resource Management Survey (ARMS) that include detailed questions on the adoption of risk management tools. Propensity score matching is used to control for the endogeneity of adoption decisions, and the profit impacts are estimated based on the matched dataset.

Findings

The adoption of input price risk management tools improves farm‐level profits by 13‐17 percent.

Originality/value

This is the first paper which examines the profit impacts of risk management tools while controlling for the endogeneity of adoption.

Details

Agricultural Finance Review, vol. 72 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

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Article
Publication date: 14 May 2021

Lan Thi Mai Nguyen and Phi Hoang Dinh

The authors investigate whether firms can ensure their financial stability during the coronavirus disease 2019 (COVID-19) pandemic by having ex-ante risk management.

Abstract

Purpose

The authors investigate whether firms can ensure their financial stability during the coronavirus disease 2019 (COVID-19) pandemic by having ex-ante risk management.

Design/methodology/approach

The authors study 279 Vietnamese listed firms by investigating their disclosure of risk awareness and risk management tool(s) in the 2019 annual reports. The authors then examine whether prior risk awareness and adoption of risk management tool(s) can enhance the firms' financial ratios during the COVID-19 pandemic.

Findings

The authors find that firms that disclose their risk management tool(s) in the 2019 annual reports have better asset utilization and higher liquidity during the COVID-19 pandemic than the others. However, firms that simply express their risk awareness exert no stronger financial stability. In addition, the authors document that debt management is the most popular and most effective tool to ensure firms' financial stability during the crisis.

Originality/value

The study highlights the need for ex-ante risk management for future pandemics. The authors also suggest that stakeholders can rely on the degree of risk management tool utilization to evaluate the financial stability of firms.

Details

China Finance Review International, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-1398

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Article
Publication date: 19 October 2018

Brian K. Coffey and Ted C. Schroeder

The purpose of this paper is to identify the relationships between grain farm and farmer profiles and their respective choices to use forward pricing techniques and…

Abstract

Purpose

The purpose of this paper is to identify the relationships between grain farm and farmer profiles and their respective choices to use forward pricing techniques and revenue protection crop insurance to manage risk.

Design/methodology/approach

An e-mail survey of Midwestern grain farmers elicited farmer demographic information, farm profile, risk attitudes and farmer use of forward pricing and revenue protection insurance. Responses regarding use of risk management tools were compiled as choices to use possible bundles of tools to account for simultaneous nature of the decision. Choices to use bundles of tools were used as the independent variable categories in a multinomial logit regression. Regressors were relevant data collected from the survey.

Findings

Farm size, using a market advisory service, and being a technology adopter are the most important factors in predicting risk management tool use by grain farmers. Farmers tend to use forward pricing and revenue protection insurance in combination. Large farms are more likely to use forward pricing tools.

Practical implications

Results provide researchers, extension professionals and risk management specialists with a current understanding of how farm and farmer characteristics relate to use of risk management tools. The authors also elaborate on findings to provide guidance for future risk management research.

Originality/value

The survey covered 9 Midwestern states and 648 grain farmers. The survey results update understanding of grain farmers’ risk management practices. The empirical approach treats risk management decisions to use available tools as simultaneous, which recent literature suggests is more appropriate than earlier approaches.

Details

Agricultural Finance Review, vol. 79 no. 2
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 29 April 2014

Kerry Tudor, Aslihan Spaulding, Kayla D. Roy and Randy Winter

The purpose of this paper is to investigate the relationships among choice of risk management tools, perceived effectiveness of risk management tools, self-reported risk

Abstract

Purpose

The purpose of this paper is to investigate the relationships among choice of risk management tools, perceived effectiveness of risk management tools, self-reported risk attitude, and farm and farmer characteristics.

Design/methodology/approach

A mail survey was used to collect information about utilization of risk management tools, perceived effectiveness of risk management tools, and factors that could influence choice of risk management tools by Illinois farmers. Cluster analysis, one-way ANOVA, χ2 tests of independence, and multinomial logistic regression were utilized to detect possible relationships among choice of risk management tools, perceived effectiveness of risk management tools, self-reported risk attitude, and farm and farmer characteristics.

Findings

Multinomial logistic regression analysis revealed that age and gross farm income (GFI) were the strongest predictors of the risk management tool utilization group to which an individual would be assigned. The number of risk management tools utilized decreased with age but increased with GFI. Neither self-reported risk attitude nor education was a significant independent variable in the multinomial logistic regression model, but both were strongly impacted by age. Younger farmers with higher GFI were the most likely users of hedging.

Research limitations/implications

The results of this study provide support for the idea that farmers who are better able to generate revenue are better able to manage risk, but the direction of causality was not investigated.

Practical implications

Risk management service providers could benefit from this study as a benchmark for understanding their current and potential farmer clients’ risk management strategies.

Originality/value

This study used cluster analysis and multinomial logistic regression to address the complexity of decisions regarding multiple risk management tools. The number of tools utilized by individuals was investigated.

Details

Agricultural Finance Review, vol. 74 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

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Article
Publication date: 30 March 2012

Claude Besner and Brian Hobbs

The purpose of this paper is to investigate the interplay between risk management and uncertainty and the contextual variability of risk management practice. More…

Abstract

Purpose

The purpose of this paper is to investigate the interplay between risk management and uncertainty and the contextual variability of risk management practice. More precisely, the research empirically measures the relation between the extent of use of risk management and the level of project uncertainty.

Design/methodology/approach

The research defines risk management from an empirical perspective., i.e. from an empirically‐identified set of tools that is actually used to perform risk management. This toolset is derived from the results of an ongoing major worldwide survey on what experienced practitioners actually do to manage their projects. This paper directly relates uncertainty to the degree of project definition. It uses a sample of 1,296 responses for which the interplay between risk management and uncertainty could be measured.

Findings

The results are very coherent. They verify and empirically validate many of the propositions drawn from a review of the literature. But results challenge some of the propositions found in the conventional project management literature and some commonly held views. The research shows that the use of risk management practices and tools is negatively related to the degree of project uncertainty. This somewhat counter‐intuitive result is consistent with a general tendency for all project management tools and techniques to be used more intensively in better defined contexts.

Practical implications

The empirical investigation of actual risk practices and their contextual variability can help better understand risk management practice and manage risks better. The research also clarifies the concepts of uncertainty, risk and risk management.

Originality/value

The results confirm some well‐known assumptions about practices, but at the same time produced unexpected results that can stimulate the development of new practices adapted to highly uncertain contexts. The project management field needs to develop new responses for specific contexts for which it was not primarily developed. The results of this research point in the direction of such a need for ill‐defined projects and highly uncertain contexts.

Details

International Journal of Managing Projects in Business, vol. 5 no. 2
Type: Research Article
ISSN: 1753-8378

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Article
Publication date: 7 June 2011

Fauziah Hanim Tafri, Rashidah Abdul Rahman and Normah Omar

The paper aims to gain an insight into the risk management tools practised in Islamic and commercial banks in Malaysia, and selected Islamic banks outside Malaysia. The…

Abstract

Purpose

The paper aims to gain an insight into the risk management tools practised in Islamic and commercial banks in Malaysia, and selected Islamic banks outside Malaysia. The study also examines the level of adequacy of risk management tools and systems of these banks.

Design/methodology/approach

The study employs primary data collected using a questionnaire survey.

Findings

There are significant differences in the level of extensiveness of the usage of market value at risk (VaR), usage of stress testing results, the usage of credit risk mitigation methods and also the level of extensiveness of the usage of operational risk management tools between Islamic and conventional banks. The findings further show that risk management tools and systems for Islamic banking are inadequate, particularly in the critical areas of “IT professionals with relevant expertise in process integration and risk analytics”, “IT systems to cater for each Islamic instrument” and also the “capacity of human capital in the highly technical areas of risk measurement.” This implies that more innovations and product developments are needed for Islamic banking in managing risks.

Originality/value

Since there are relatively few studies conducted in this area, specifically among Islamic banks in Malaysia, this study will broaden the scope of the literature by providing novel empirical evidence.

Details

Qualitative Research in Financial Markets, vol. 3 no. 2
Type: Research Article
ISSN: 1755-4179

Keywords

Content available
Article
Publication date: 29 June 2020

Andreas Norrman and Andreas Wieland

This invited article explores current developments in supply chain risk management (SCRM) practices by revisiting the classical case of Ericsson (Norrman and Jansson…

Abstract

Purpose

This invited article explores current developments in supply chain risk management (SCRM) practices by revisiting the classical case of Ericsson (Norrman and Jansson, 2004) after 15 years, and updating its case description and analysis of its organizational structure, processes and tools for SCRM.

Design/methodology/approach

An exploratory case study is conducted with a longitudinal focus, aiming to understand both proactive and reactive SCRM practices using a holistic perspective of a real-life example.

Findings

The study demonstrates how Ericsson's SCRM practices have developed, indicating that improved functional capabilities are increasingly combined across silos and leveraged by formalized learning processes. Important enablers are IT capabilities, a fine-grained and cross-functional organization, and a focus on monitoring and compliance. Major developments in SCRM are often triggered by incidents, but also by requirements from external stakeholders and new corporate leaders actively focusing on SCRM and related activities.

Research limitations/implications

Relevant areas for future research are proposed, thereby increasing the knowledge of how companies can develop SCRM practices and capabilities further.

Practical implications

Being one of few in-depth holistic case studies of SCRM, decision-makers can learn about many practices and tools. Of special interest is the detailed description of how Ericsson reactively responded to the Fukushima incident (2011), and how it proactively engaged in monitoring and assessment activities. It is also exemplified how SCRM practices could continuously be developed to make them “stick” to the organization, even in stable times.

Originality/value

This is one of the first case studies to delve deeper into the development of SCRM practices through taking a longitudinal approach.

Details

International Journal of Physical Distribution & Logistics Management, vol. 50 no. 6
Type: Research Article
ISSN: 0960-0035

Keywords

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Article
Publication date: 12 October 2015

Stephanie Kewley, Anthony Beech, Leigh Harkins and Helen Bonsall

– The purpose of this paper is to examine the extent to which risk is addressed in the risk management planning process of those convicted of sexual offending.

Abstract

Purpose

The purpose of this paper is to examine the extent to which risk is addressed in the risk management planning process of those convicted of sexual offending.

Design/methodology/approach

Data were collected from a risk assessment and management system called the Offender Assessment System (OASys), used by the National Offender Management Service, in England and Wales. The records of 216 clients were accessed and each risk management plan analysed. The study aimed to understand if first, general and sexual risk factors identified by assessors were recorded and detailed in subsequent plans; second, if specialist sexual offending risk assessment tools were used to inform risk management strategies; and third, if both a balance of control and support mechanisms were in place to tackle identified risk and needs of clients.

Findings

Inconsistencies were found in relation to practitioners transposing risks identified, into the subsequent risk management plans. Strategies were therefore deemed, inadequate as there was a significant omission of the use of specialist sexual risk assessment tools to inform and ensure risk assessment to be robust. In addition risk management plans were often overbearing in nature, as assessors tended to utilise control strategies to assist the reintegration process, in contrast to a combination of both control and support.

Research limitations/implications

This sample was taken from only one probation trust in England and Wales. The findings might therefore be unique to this organisation rather than be representative of national practice. This study should therefore, be replicated in a number of other probation areas. In addition, it is important to note that this study only reviewed one electronic tool used by practitioners. Therefore, while it might appear for example that the RM2000 tool was not routinely completed; this cannot be assumed as practitioners might have adopted local custom and practice, recording RM2000 scores elsewhere.

Practical implications

These findings highlight the need for some understanding as to why there is a lack of consistency throughout the risk management planning process. Practitioners should receive ongoing risk management training, development and supportive supervision. In particular, practitioners require supervision that supports and develops their skills when applying RM2000 classifications to their clients’ risk management plans. Likewise initiatives which develop practitioner’s awareness and application of strengths based approaches such as the Good Lives Model should be encouraged. These will help practitioners develop plans that address both the risks while supporting their development of the strengths a client presents.

Originality/value

To the authors’ knowledge, this is the first study of its kind, which examines the risk management plans of those convicted of sexual offending, completed by practitioners in England and Wales using the OASys tool.

Details

Journal of Aggression, Conflict and Peace Research, vol. 7 no. 4
Type: Research Article
ISSN: 1759-6599

Keywords

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Article
Publication date: 1 April 2005

Dale Neef

To explain how progressive companies are using a combination of knowledge and risk management (KRM) systems and techniques in order to help them to prevent, or respond…

Abstract

Purpose

To explain how progressive companies are using a combination of knowledge and risk management (KRM) systems and techniques in order to help them to prevent, or respond most effectively to, ethical or reputation‐damaging incidents.

Design/methodology/approach

The paper explains KRM, develops a corporate integrity framework, and then explores how the KRM process component of the framework is related to the use of knowledge management (KM)‐related procedures, techniques, and tools in use in many corporations.

Findings

In many forward‐looking corporations KM procedures, techniques and tools are being used to perform risk management. KRM, the integration of knowledge and risk management, is alive and well and, given the global importance of risk management, may provide KM with a much‐needed and revitalizing boost.

Originality/value

The value of the KRM perspective is its development of a new and comprehensive application of KM to the vital global corporate need of risk management.

Details

The Learning Organization, vol. 12 no. 2
Type: Research Article
ISSN: 0969-6474

Keywords

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Article
Publication date: 8 April 2014

Rim Ben Selma Mokni, Abdelghani Echchabi, Dhekra Azouzi and Houssem Rachdi

– The main purpose of this study is to investigate in detail the way each risk is being measured and managed by Islamic banks in the MENA region.

Abstract

Purpose

The main purpose of this study is to investigate in detail the way each risk is being measured and managed by Islamic banks in the MENA region.

Design/methodology/approach

This research attempts to examine the perceptions of Islamic bankers about the importance of transparency and public disclosure in the understanding of the bank's risk profile. It covers 23 Islamic banks located in the MENA region using self-administered questionnaire.

Findings

The results show that there are differences in the level of risk perception across funding modes. Also Islamic banks use extensively the traditional tools in mitigating risk.

Practical implications

The paper discusses and analyses the current practices employed in the risk management of Islamic banks. It identifies the tools and methods used in managing credit risk, market risk, liquidity risk and operational risk by Islamic banks.

Originality/value

This study aims to extend the existing literature in two ways. First, this paper contributes to the dearth of studies on examination of tools practiced in the risk management by Islamic banks located in the MENA region. Next, this work integrates the methods used in the management of liquidity risk that have not been studied earlier.

Details

Journal of Islamic Accounting and Business Research, vol. 5 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

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