Risk management and its methodological support in the performance economy

Abstract

The increasing complexity and dynamism of the business environment but also the compulsion of raising efficiency, which is always associated with making internal systems lean, forces the need for a comprehensive and holistic risk management system. Therefore, besides the financial perspective, we also have to look at value-added production and service processes with their resulting risks. A well functioning efficient risk management in performance economy requires a systematic methodical support in the various phases of the risk management process. A study carried out by the Department of Economics and Business Management, Montanuniversität Leoben shows how permeated these methods and instruments are when used in industrial practice. Data collection was conducted in the years 2010 and 2011, with a written questionnaire in an online survey of 850 German and Austrian companies. In general, the focus of the survey was aimed at the prevailing understanding of risk, the importance of key risk areas and the risk management process in the performance economy. Here, above all, the permeation of the methodological support in the strategic and operational risk management process has been studied. The aim of this research was to investigate: How is the dominant risk-managementunderstanding constituted in operational practice and what are the risk areas having the greatest relevance? Which policies, laws, regulations and standards are geared to operational practice? How far has the set of different instruments and tools permeated the risk management process in operational practice? The present study shows that just in that field a systematic and consistent application of instruments and tools in the risk management process is lacking in operational practice. The methodological gaps often lead to not closing risk management process loops and to a missing connection from an operational to a strategic management level. Here it is important to use a matched set of instruments and tools in order to ensure a closed risk management process, which in turn minimizes the uncertainty in dealing with risks. © 2013 WIT Press.