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Article
Publication date: 18 April 2023

Andrew Maskrey, Garima Jain and Allan Lavell

This paper explores the building blocks of risk governance systems that are equipped to manage systemic risk in the 21st century. Whilst approaches to risk governance have been…

Abstract

Purpose

This paper explores the building blocks of risk governance systems that are equipped to manage systemic risk in the 21st century. Whilst approaches to risk governance have been evolving for more than a decade, recent disasters have shown that conventional risk management solutions need to be complemented with a multidimensional risk approach to govern complex risks and prevent major, often simultaneous, crises with cascading and knock-on effects on multiple, interrelated systems at scale. The paper explores which risk governance innovations will be essential to provide the enabling environment for sustainable development that is resilient to interrelated shocks and risks.

Design/methodology/approach

This interdisciplinary literature review-based thought piece highlights how systemic risk is socially constructed and identifies guiding principles for systemic risk governance that could be actionable by and provide entry points for local and national governments, civil society and the private sector. particularly in low- and middle-income countries (LMIC), in a way that is relevant to the achievement of the 2030 Agenda for Sustainable Development. This considers preparedness, response and resilience, but more importantly prospective and corrective risk control and reduction strategies and mechanisms. Only when systemic risk is framed in a way that is relevant to the political agendas of countries will it be possible to begin a dialogue for its governance.

Findings

The paper identifies opportunities at the global, national and local levels, which together draw up a viable framework for systemic risk governance that (1) embraces the governance of sustainability and resilience through a strengthened holistic governance framework for social, economic, territorial and environmental development; (2) improves managing conventional risk to ultimately manage systemic risks; (3) fosters the understanding of vulnerability and exposure to gain insight into systemic risk; (4) places a greater focus on prospective risk management; (5) manages systemic risk in local infrastructure systems, supply chains and ecosystems; (6) shifts the focus from protecting privatized gains to managing socialized risk.

Originality/value

The choices and actions that societies take on the path of their development are contributing intentionally or unintentionally to the construction of systemic risks, which result in knock-on effects among interconnected social, environmental, political and economic systems. These risks are manifesting in major crises with cascading effects and a real potential to undermine the achievement of the SDGs, as COVID-19 is a stark reminder of. This paper offers the contours of a new risk governance paradigm that is able to navigate the new normal in a post-COVID world and is equipped to manage systemic risk.

Details

Disaster Prevention and Management: An International Journal, vol. 32 no. 1
Type: Research Article
ISSN: 0965-3562

Keywords

Article
Publication date: 13 August 2021

Yang Zhao, Jin-Ping Lee and Min-Teh Yu

Catastrophe (CAT) events associated with natural catastrophes and man-made disasters cause profound impacts on the insurance industry. This research thus reviews the impact of CAT…

Abstract

Purpose

Catastrophe (CAT) events associated with natural catastrophes and man-made disasters cause profound impacts on the insurance industry. This research thus reviews the impact of CAT risk on the insurance industry and how traditional reinsurance and securitized risk-transfer instruments are used for managing CAT risk.

Design/methodology/approach

This research reviews the impact of CAT risk on the insurance industry and how traditional reinsurance and securitized risk-transfer instruments are used for managing CAT risk. Apart from many negative influences, CAT events can increase the net revenue of the insurance industry around CAT events and improve insurance demand over the post-CAT periods. The underwriting cycle of reinsurance causes inefficiencies in transferring CAT risks. Securitized risk-transfer instruments resolve some inefficiencies of the reinsurance market, but are subject to moral hazard, basis risk, credit risk, regulatory uncertainty, etc. The authors introduce some popular securitized solutions and use Merton's structural framework to demonstrate how to value these CAT-linked securities. The hybrid solutions by combining reinsurance with securitized CAT instruments are expected to offer promising applications for CAT risk management.

Findings

The authors introduce some popular securitized solutions and use Merton's structural framework to demonstrate how to value these CAT-linked securities. The hybrid solutions by combining reinsurance with securitized CAT instruments are expected to offer promising applications for CAT risk management.

Originality/value

This research reviews a broad array of impacts of CAT risks on the (re)insurance industry. CAT events challenge (re)insurance capacity and influence insurers' supply decisions and reconstruction costs in the aftermath of catastrophes. While losses from natural catastrophes are the primary threat to property–casualty insurers, the mortality risk posed by influenza pandemics is a leading CAT risk for life insurers. At the same time, natural catastrophes and man-made disasters cause distinct impacts on (re)insures. Man-made disasters can increase the correlation between insurance stocks and the overall market, and natural catastrophes reduce the above correlation. It should be noted that huge CAT losses can also improve (re)insurance demand during the postevent period and thus bring long-term effects to the (re)insurance industry.

Details

China Finance Review International, vol. 11 no. 4
Type: Research Article
ISSN: 2044-1398

Keywords

Abstract

Details

The Corporate, Real Estate, Household, Government and Non-Bank Financial Sectors Under Financial Stability
Type: Book
ISBN: 978-1-78756-837-2

Article
Publication date: 1 June 1996

Irvin T. Nelson and Richard L. Ratliff

Describes control triggers as signals which initiate the right activity to occur at the right time in a process, and discusses them as a previously unrecognized category of…

1012

Abstract

Describes control triggers as signals which initiate the right activity to occur at the right time in a process, and discusses them as a previously unrecognized category of internal control methods. Argues that, unlike traditional control mechanisms, control triggers are not dependent on the beaurocracies which world‐class companies are now dismantling. Asserts that while control triggers are important to the control and application of all organizational processes, they are particularly critical to the application of world‐class management practices, affecting the reliability, efficiency and effectiveness of an organization’s operations.

Details

Managerial Auditing Journal, vol. 11 no. 4
Type: Research Article
ISSN: 0268-6902

Keywords

Book part
Publication date: 21 August 2019

Stephan Dieckmann

I build an equilibrium model trying to reconcile investor preferences with several features of the cat bond market. The driving force behind the model is a habit process, in that…

Abstract

I build an equilibrium model trying to reconcile investor preferences with several features of the cat bond market. The driving force behind the model is a habit process, in that catastrophes are rare economic shocks that could bring investors closer to their subsistence level. The calibration requires shocks with an impact between −1% and −3% to explain a reasonable level of cat bond spreads. Such investor preferences are not only able to generate realistic cat bond returns and price comovement among different perils, but may also able to explain why cat bonds offer higher rewards compared to equally rated corporate bonds.

Details

Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-78973-285-6

Keywords

Article
Publication date: 27 March 2024

Haroon Iqbal Maseeh, Charles Jebarajakirthy, Achchuthan Sivapalan, Mitchell Ross and Mehak Rehman

Smartphone apps collect users' personal information, which triggers privacy concerns for app users. Consequently, app users restrict apps from accessing their personal…

Abstract

Purpose

Smartphone apps collect users' personal information, which triggers privacy concerns for app users. Consequently, app users restrict apps from accessing their personal information. This may impact the effectiveness of in-app advertising. However, research has not yet demonstrated what factors impact app users' decisions to use apps with restricted permissions. This study is aimed to bridge this gap.

Design/methodology/approach

Using a quantitative research method, the authors collected the data from 384 app users via a structured questionnaire. The data were analysed using AMOS and fuzzy-set qualitative comparative analysis (fsQCA).

Findings

The findings suggest privacy concerns and risks have a significant positive effect on app usage with restricted permissions, whilst reputation, trust and perceived benefits have significant negative impact on it. Some app-related factors, such as the number of apps installed and type of apps, also impact app usage with restricted permissions.

Practical implications

Based on the findings, the authors provided several implications for app stores, app developers and app marketers.

Originality/value

This study examines the factors that influence smartphone users' decisions to use apps with restricted permission requests. By doing this, the authors' study contributes to the consumer behaviour literature in the context of smartphone app usage. Also, by explaining the underlying mechanisms through which the principles of communication privacy management theory operate in smartphone app context, the authors' research contributes to the communication privacy management theory.

Details

Information Technology & People, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-3845

Keywords

Open Access
Article
Publication date: 28 June 2022

Wenhao Yu, Jun Li, Li-Ming Peng, Xiong Xiong, Kai Yang and Hong Wang

The purpose of this paper is to design a unified operational design domain (ODD) monitoring framework for mitigating Safety of the Intended Functionality (SOTIF) risks triggered

1484

Abstract

Purpose

The purpose of this paper is to design a unified operational design domain (ODD) monitoring framework for mitigating Safety of the Intended Functionality (SOTIF) risks triggered by vehicles exceeding ODD boundaries in complex traffic scenarios.

Design/methodology/approach

A unified model of ODD monitoring is constructed, which consists of three modules: weather condition monitoring for unusual weather conditions, such as rain, snow and fog; vehicle behavior monitoring for abnormal vehicle behavior, such as traffic rule violations; and road condition monitoring for abnormal road conditions, such as road defects, unexpected obstacles and slippery roads. Additionally, the applications of the proposed unified ODD monitoring framework are demonstrated. The practicability and effectiveness of the proposed unified ODD monitoring framework for mitigating SOTIF risk are verified in the applications.

Findings

First, the application of weather condition monitoring demonstrates that the autonomous vehicle can make a safe decision based on the performance degradation of Lidar on rainy days using the proposed monitoring framework. Second, the application of vehicle behavior monitoring demonstrates that the autonomous vehicle can properly adhere to traffic rules using the proposed monitoring framework. Third, the application of road condition monitoring demonstrates that the proposed unified ODD monitoring framework enables the ego vehicle to successfully monitor and avoid road defects.

Originality/value

The value of this paper is that the proposed unified ODD monitoring framework establishes a new foundation for monitoring and mitigating SOTIF risks in complex traffic environments.

Details

Journal of Intelligent and Connected Vehicles, vol. 5 no. 3
Type: Research Article
ISSN: 2399-9802

Keywords

Article
Publication date: 17 October 2019

Yue Song, Naiding Yang, Yanlu Zhang and Jingbei Wang

This paper aims to explore what factors influence the possibility of internal and external risk propagation in R&D networks and investigate how government intervention moderates…

Abstract

Purpose

This paper aims to explore what factors influence the possibility of internal and external risk propagation in R&D networks and investigate how government intervention moderates the associations between the influencing factors and risk propagation.

Design/methodology/approach

The authors divided government intervention into directive and facilitative intervention and adopted an empirical research approach in this study. They collected 228 questionnaires from managers and R&D personnel participating in R&D projects in Shanghai and Jiangsu province through e-mail and in person. The data were used to carry out multiple regression analysis to test hypotheses.

Findings

The results show that the probability and consequence of risks positively affect the possibility of internal and external risk propagation; risk perception and transformation ability negatively influence the possibility of internal and external risk propagation; both directive and facilitative intervention weaken the relationship between the probability of risks and internal risk propagation when they are high than low the association between transformation ability and internal risk propagation is weaker when directive intervention is high than low, whereas facilitative intervention presents the insignificant moderation effect on the relationships between risk perception ability and internal and external risk propagation.

Originality/value

This study provides a distinctive theoretical perspective for risk conduction theory, government intervention theory and risk management. It also offered managers and the government a clear understanding of how to reduce or avoid risk propagation by leveraging directive and facilitative government intervention.

Details

Chinese Management Studies, vol. 13 no. 4
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 21 November 2022

Rahul Pandey, Dipanjan Chatterjee and Manus Rungtusanatham

In this paper, the authors introduce supply disruption ambiguity as the inability of a sourcing firm to attach probability point estimates to the occurrence of and to the…

Abstract

Purpose

In this paper, the authors introduce supply disruption ambiguity as the inability of a sourcing firm to attach probability point estimates to the occurrence of and to the magnitude of loss from supply disruptions. The authors drew on the “ambiguity in decision-making” literature to define this concept formally, connected it to relevant supply disruption information deficit, positioned it relative to supply chain risk assessment and hypothesized and tested its negative associations with both supply base ties and inventory turnover.

Design/methodology/approach

The authors analysed survey data from 171 North American manufacturers and archival data for a subset (88 publicly listed) of these manufacturers via Ordinary Least Squares (OLS) estimation after ensuring that methodological concerns with survey research have been addressed. They used appropriate controls and employed the heteroskedasticity-based instrumental variable (HBIV) approach to ensure that inferences from our results are not unduly influenced by endogeneity.

Findings

Strong supply base ties decrease supply disruption ambiguity, which, in turn, increases inventory turnover. Moreover, strong supply base ties and data integration with the supply base have indirect and positive effects on inventory turnover. As sourcing firms strengthen ties and integrate data exchange with their supply base, their inventory turnover improves from access to information relevant to detect and diagnose supply disruptions effectively.

Originality/value

Research on supply disruption management has paid more attention to the “disruption recovery” stage than to the “disruption discovery” stage. In this paper, the authors add novel insights regarding the recognition and diagnosis aspects of the “disruption discovery” stage. These novel insights reveal how and why sourcing firms reduce their overall ambiguity associated with detecting and assessing losses from supply disruptions through establishing strong ties with their supply base and how and why reducing such ambiguity improves inventory turnover performance.

Details

International Journal of Operations & Production Management, vol. 43 no. 3
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 9 September 2022

Lianhua Cheng and Dongqiang Cao

Clarifying the risk evolution mechanism of housing construction for work-safety management is essential. Existing studies have inadequately discussed the risk-accumulation process…

Abstract

Purpose

Clarifying the risk evolution mechanism of housing construction for work-safety management is essential. Existing studies have inadequately discussed the risk-accumulation process in housing construction. Therefore, this study aimed to use the complex network theory and risk allocation mechanisms to explore the evolution of risk factors.

Design/methodology/approach

The authors analysed a database of housing construction accidents in China from 2015 to 2020 to identify risk factors. Moreover, the causal relationship between risk factors was determined through a systematic analysis of the logical sequence of risk factors. A complex network was used to construct a risk network for housing construction accidents (RNHCA).

Findings

The risk matrix method was used to define the factor risk threshold, and a risk value was assigned based on the correlation between risk factors. This contributes to the examination of the evolution mechanism of risk networks in the process of risk factor transmission. The case verification results show that the RNHCA quantitative assessment model can better evaluate the system risk status of housing construction accidents. Furthermore, this model can identify the key risk factors and risk chains with high risk in the evolution of the risk network.

Research limitations/implications

Accident investigation reports need to be classified and processed to analyse the evolution law of risk networks under different scales of construction project, such as high-rise buildings, middle-rise buildings, and low-rise buildings.

Practical implications

This study clarified the risk evolution process of complex systems in housing construction and provided a new method for analysing accidents.

Originality/value

This study clarifies the risk value allocation of risk factors in the transmission process and reveals the process of risk factor evolution in housing construction. This study explains the individual risk factors that form a systemic risk through the transmission chain. Moreover, this paper clarified the transformation relationship between system risk and accidents. The paper also provided a new perspective for risk analysis.

Details

Engineering, Construction and Architectural Management, vol. 31 no. 1
Type: Research Article
ISSN: 0969-9988

Keywords

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