The influence of risk culture on firm returns in times of crisis

Bui, Dien Giau; Fang, Yiwei; Lin, Chih‐Yung

doi:10.1016/j.iref.2018.01.015

Cited by 10 publications

(6 citation statements)

References 35 publications

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“…Regarding non-financial entities, Bui et al (2018) assumed that risk culture, which refers to some shared values and beliefs held by a firm's employees (decision makers) towards risktaking, is embedded in the business models of the entities and is able to affect firm performance (Mechelli et al, 2017). Focusing on firms and not considering their sectors, Kuch (2017) talks about industrial risk culture in relation to the possible ways the risk of climate change might be managed.…”

Section: A Possible Explanation Of the Limited Integration Of The Research Communitymentioning

confidence: 99%

A systematic and bibliometric review on risk culture: a novel theoretical framework

Cimini

2021

JRF

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PurposeThis paper includes a systematic and bibliometric review of research products that address risk culture published between 1996 and 2019.Design/methodology/approachThe Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) protocol has been followed for the systematic literature review. As to the bibliometric analysis, a network helps the readers to identify the most prominent research, if any, in terms of mutual references.FindingsRisk culture has been extensively investigated under different perspectives by scholars who belong to a research community not so much integrated in terms of reciprocal references.Practical implicationsManagers, policy makers and politicians should learn that it is important to understand risk culture because the effectiveness of corporate strategies and reforms pass also through cultural values of people that determine their conduct in the everyday lives.Originality/valueBeing still lacking, this article contributes to the literature by providing a novel theoretical framework that reconciles the different approaches through which risk culture has been investigated. The framework explains that behind risk culture there are always people and their behaviour facing risk and uncertainty. In the extent, bounded rationality might produce (mis)perceptions of risks, a large variety of human behaviour, and so different risk cultures can be observed.

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Section: A Possible Explanation Of the Limited Integration Of The Research Communitymentioning

confidence: 99%

A systematic and bibliometric review on risk culture: a novel theoretical framework

Cimini

2021

JRF

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“…Governmental risk culture can be reflected as a daily (almost automatic) continuous consideration of risk in every step of the policy-making process by civil servants; it is regarded as a common belief in risk-taking conditions by decision-makers (Bui et al , 2018; Power et al , 2009). Broadly speaking, risk culture is a result of people’s relationships or systems and structure of the firm; it is composed of both structural aspects and human aspects (Osman and Lew, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Broadly speaking, risk culture is a result of people’s relationships or systems and structure of the firm; it is composed of both structural aspects and human aspects (Osman and Lew, 2020). Risk culture can also be defined as mutually agreed beliefs of decision-makers regarding a decision that requires risk-taking, and thus, it is related to its business risk tolerance (Bui et al , 2018). Risk culture, therefore, becomes a communal assessment among employees within a company, associated with relative priority given to the RM implementation; it includes the perceptions of risk-oriented practices and activities that are required, valued and supported (Ehrhart et al , 2014; Sheedy et al , 2017).…”

Section: Literature Reviewmentioning

confidence: 99%

Who is calling the shot? Risk culture experiments on bi-level governments

Rosdini

Afiah²,

Sari³

et al. 2022

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Purpose This study aims to explore how risk culture – tone at the top (TATT) and informed risk decision (IRD) – can affect the effectiveness of risk management (EORM) in the government. Design/methodology/approach The authors experimented on 84 civil servants working in central and local governments in Indonesia, focusing on vital local governments and critical ministries/institutions in central governments. Findings TATT and its interaction with IRD do not affect the EORM, while IRD and socialization of risk affect and improve it. A weak TATT, low commitment and ineffective implementation of risk culture to the lower-middle echelon may impair a country’s risk management (RM) practice. IRD with socialization is also the key to improving decision-making and RM. Originality/value This paper illuminates the possibility of risk culture in regulating the EORM in the governmental general planning process using the experiment as the research method and provides different facets in the application of risk culture in the government, where the focus is on policy-making, budgeting and planning aspects by involving several important ministries, institutions and strategic local government’s civil servants.

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“…A strong organizational culture influences an employee's decisions and behavior within the organization. Bui, Fang, and Lin (2018) empirically determined risk culture as the most significant variable in predicting crisis performance. The relationship between risk and firm performance is hardly linear and one-to-one and the risk appetite of an organization must reflect its culture (COSO, 2017).…”

Section: Hypothesis 1 Enterprise Risk Management Is Not Directly Rela...mentioning

confidence: 99%

A Theoretical Framework for Enterprise Risk Management and Organizational Performance

Kanu¹

2021

IBR

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The implementation of holistic risk management, enterprise risk management (ERM), is believed to contribute significantly to the successful performance of modern-day organizations that operate in an increasingly volatile and dynamic environment. In an environment of scarce resources and information uncertainty, ERM, risk culture, and strategic planning is required to face an unstable business environment to achieve organizational goals. Several conceptual and empirical studies have provided mixed evidence on the value relevance of ERM. Scholars have also demonstrated that the effects of ERM on performance are contingent upon certain contextual variables. Currently, the academic literature is silent on the joint relationship of ERM, risk culture, strategic planning, and organizational performance. The purpose of this study is to uncover this research gap by analytically reviewing pertinent conceptual and empirical literature to establish the possibility that the impact of ERM on organizational performance is transmitted through risk culture and strategic planning. This paper advances these evolving suggestions, which hinges on the conclusion that the direct effect of ERM on organizational performance is debatable and hence inconclusive due to the possible mediating influence of risk culture and strategic planning. A framework is conceptualized to examine the mediating effects of these two constructs on the relationship. The study proposes partial least squares structural equation modeling for statistical analysis using the unexplored multiple mediation analysis in the ERM academic literature. This paper’s postulations would guide empirical research in various contexts to address the knowledge gaps in the extant literature.

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The influence of risk culture on firm returns in times of crisis

Cited by 10 publications

References 35 publications

A systematic and bibliometric review on risk culture: a novel theoretical framework

A systematic and bibliometric review on risk culture: a novel theoretical framework

Who is calling the shot? Risk culture experiments on bi-level governments

A Theoretical Framework for Enterprise Risk Management and Organizational Performance

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