Combining central planning and decentralization to enhance effective risk management outcomes
Tóm tắt
Enterprise risk management has gained in prominence as official regulations emphasize implementation of formal practices to safeguard against adverse corporate events. Whereas this development has increased general risk awareness, the adoption of centralized integrative frameworks is not necessarily sufficient in dealing effectively with uncertainty and unexpected events that seem to characterize contemporary business environments. In this context, we discuss the need to combine integrative risk management approaches with decentralized response capabilities that both allow management to better understand the intricate risk landscape and at the same time enable adaptive initiatives throughout the organization. Analysis of a corporate sample supports the proposition that a combination of central planning and decentralized decision making is associated with both higher economic performance and lower variation in performance outcomes.
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