A Conceptual Framework of Risk Treatment in Scale up Companies Supported by Using Nudge Theory

Abstract

This article analyzes the potential benefits of applying Nudge Theory for risk management in scaling up companies. Considering importance of risk management in preventing failure of firms to entrepreneurs; this research uses the notion of Behavioural Economics to offer valuable insights into how scaling up companies can benefit from the implementation of risk management process supported by applying nudges techniques. To overcome some of the barriers in implementing the risk management; we propose a conceptual framework for risk mitigation, which is based on Nudge theory and using behavioral approach. The goal is to contribute to the success of scale up companies during transition period by improving the efficiency of risk treatment. This study seeks to take an essential step towards a general understanding of the influence of utilizing Nudging for employees in planning of risk actions. This paper reviews some challenges of implementing Enterprise Risk Management (ERM). We focus on behavioural solutions in risk treatment to overcome a part of the barriers. Additionally, the concept of “Nudg” and some nudge techniques are explained that are used in the presented framework. We conclude by outlining relevant ideas for further investigation on this topic, by suggesting a set of implications for academics and policymakers.