New Ideas for Enterprise Risk Management Research


/ November 11th, 2010/ Posted in Management Innovation / 2 Comments »

I am going to launch into some new enterprise risk management research, especially to see its interaction with managing innovation. I will be working with my Danish colleague, Ulrik Christiansen. We haven’t completed a literature review, but we can see that much of the study of enterprise risk management is influenced by the trade literature, almost taking ERM for granted as a phenomenon unto itself, while, in practice, the implementation of what is called ERM is diverse. Similarly, risk is supposed to be managed together with opportunity, which is mentioned in the standards. In practice, though, do risk professionals actually recognize and manage opportunity systematically?

Another line of inquiry is to get away from the rational model, and consider the behavioural, motivational and psychological influences in risk and opportunity decision-making. Personal backgrounds, formation and education can also be determinants of opportunity-seeking behaviour and risk aversion. So we have a series of constructs to explore and define, somewhat along these lines:

1. the level of study

a. risk managers
b. Chief Risk Officers
c. R&D managers

2. the personal attributes sought

In addition to dispositional traits, discoverable through questionnaires, we can also investigate education and training, both formal and informal.

3. the situational construct

We have to define this closely; we need comparable situations or organizational contexts:

a. reviewing investment opportunities
b. reviewing project opportunities
c. reviewing stages of product/service development in a formal R&D environment
d. reviewing business model change opportunities

4. the effects sought

To study respondents’ assessment or conceptualization of opportunities, as well as action taken, we can use a scenarios approach, as well as open-ended questions and structured interviews.

This construct framing is something that we will refine as we go ahead with literature reviews.

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2Comments

  1. Edward
    2010/11/28 at 12:53:50

    Tom,

    In addition to my email…

    I will be posting comments on the literature search as I go along. We want to follow up on the scholarly work on Enterprise Risk Management; the management of innovation in medium-sized firms; and the situational and dispositional (personal affect) aspects that influence these things. While I’ve done research on ERM implementation and applied it as a practitioner, and summarized my conclusions in online courses, this is a chance to refine the theory in a scholarly approach. Thank you for your interest!

    Regards,
    Edward

  2. Tom Erickson
    2010/11/12 at 09:08:43

    Edward,

    Always interested in ERM research. I’ll watch for more in the future.

    Regards,

    Tom

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