Avoiding extreme risk before it occurs: A complexity science approach to incubation

Abstract

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How does CEO power and overconfidence affect the systemic risk of China’s financial institutions?

“…A number of studies have been conducted to examine the factors that affect risk in the financial sector to avoid extreme moments before it occurs (Tripe et al, 2009;McKelvey and Andriani, 2010;Kanno, 2018;Schnatterly et al, 2018;Wen et al, 2020;Matenda et al, 2021). For example, studies have explored the role of governance (Chavarín, 2020), bank risk shifting and diversification (Alaabed et al, 2016;Batten and Vo, 2016), information system security (Koskosas, 2008;Jakšič and Marinč, 2018), operational risk (Blacker, 2000), contagion risk (Der Su, 2018), managerial practices (Al Khattab et al, 2008), and organizational culture (Imran et al, 2021) in the financial sector to mitigate the risk.…”

Through a glass darkly: Expertise, evidence, and the management of uncertainty

“…Risk analysis is an essentially technocratic activity that is carried out by those who are deemed to be expert in the particular field where the hazards arise, but this expertise is often constrained, especially for emergent hazards . The management of risk, therefore, reflects the knowledge and understanding that organisations have regarding the probabilities and consequences associated with particular phenomena (Smallman, 1999;Rouse, 2004;McKelvey and Andriani, 2010;Nakamura and Kijima, 2014). However, it is also a function of the ways in which risk is socially constructed both within expert and social groups (Collingridge and Reeve, 1986a;Beck, 1992;Irwin, 1995).…”

“…Expertise is therefore a central component of the ways in which risk is determined; but expert judgments are domain specific and this can generate limitations around complex multi-dimensional forms of hazard that have a low probability of occurrence (Beecher-Monas, 1998;Fischer, 1990;Dwyer, 2007;Fischbacher-Smith, 2010). To that end, the journal has also considered how these extreme events can be planned for (Bailey et al, 2010;Ormerod, 2010;Neal, 2014) and the difficulties that this generates around the dominant world views held by managers (McKelvey and Andriani, 2010;Fischbacher-Smith, 2012).…”

Modelling of Multi-Mitigation Strategies for Maritime Disruptions in the Wheat Supply Chain

“…The disruption management scenarios that can be applied by senior managers when maritime disruptions occur are inventory pooling, agency utilisation, using other chain links, applying optimum ordering, postponing delays, using supply flexibility strategies, using reserved routes, mapping out the critical nodes, containerised shipment (as one of the business continuity responses), changing work practices, enabling allowable interruptions, applying warning systems, using implication monitoring, and developing an insurance package. In addition, senior managers can also set up a risk preparedness strategy or contingencies for operations management in both countries, which are used to detect and reduce the potential for maritime disruptions or commercial issues between sellers and buyers [25].…”