Risk assessment and profit sharing in business networks

Abstract

a b s t r a c tNowadays network is the preferred governance form to conduct economic transactions. Network solution allows to reach flexibility maintaining cost and quality level. Since network concept refers to a great variety of organizational hybrids it is possible to choose the one that fits better market requirements. The new trends in interorganization relationships push towards network solutions: companies are interested in relationships with partners and customers to overcome resource dependence, to enter too risky market or simply differentiate their business portfolio. The proposed research focuses on the network concept aiming at highlighting threats and opportunities to investigate the double nature of the risk concept. Network structures offer flexibility and higher profit as a consequence and business risk sharing opportunity.These two aspects (profit and risk) are strictly related and have to be considered together to depict a complete scenario; this implies that risk assessment and management in network environment cannot neglect profit sharing or, in other words, that profit sharing mechanisms should use risk as driver. In this context our research proposes a methodology to measure risk taking into account network peculiarities; risk estimation is a basic step to evaluate the opportunity cost of capital needed to compute the network Net Present Value (NPV) that is assumed as base in the profit sharing process. The profit sharing process has been tackled using the Shapley value approach that is inspired to the fairness principle while the opportunity cost of capital is assessed using the Capital Asset Pricing Model (CAPM).

How risk influences the choice of governance mode in biopharmaceutical inter-firm relationships

“…Relational risk is the probability and consequence of a lack of cooperation between partner firms. It is linked to endogenous factors, which, being embedded in the specific relationship, can be controlled by partners' actions (Lo Nigro & Abbate, 2011). Thus, this risk comes from the possibility that partners will behave opportunistically.…”

Grau de internacionalização influencia a previsão da rentabilidade de ações? Evidências do mercado de ações brasileiro, por meio de redes neurais artificiais

“…O fato de o aumento no processo de internacionalização proporcionar às empresas dependência em relação às redes de negócios internacionais, expondo-as a diferentes riscos (DEAKINS, PHILPOTT, 1995;NIGRO, ABBATE, 2011;ERIKSSON et al, 2014) explica a maior oscilação na rentabilidade das ações das empresas mais internacionalizadas, tornando-a mais difícil de ser prevista.…”

“…No processo de internacionalização, as empresas se inserem em novas redes de negócios, tornando-O grau de internacionalização in uencia a previsão da rentabilidade de ações?Evidências do mercado de ações brasileiro por meio de redes neurais arti ciais 141 se dependentes dessas redes e expondo-se a diferentes riscos (DEAKINS, PHILPOTT, 1995;NIGRO, ABBATE, 2011;ERIKSSON et al, 2014). Para Eriksson et al (2014), os riscos inerentes da rede correspondem à dependência, ao desempenho e à evolução da rede.…”

Supply Chain Risk Management: Systematic literature review and a conceptual framework for capturing interdependencies between risks

“…Interpretive structural modeling has been used to analyze supply chain risks in food industry [44] and model mutual relationship among the enablers of supply chain risk mitigation [45]. Lo Nigro and Abbate [46] used the concept of Shapley's value to devise a mechanism of profit sharing among supply chain partners. Wieland [47] developed mathematical models for determining optimal solution and break-even points in the realm of four strategies-agility, robustness, resilience and rigidity.…”