PHD THESIS OF MANAGEMENT SAMPLE IMPLEMENTING EFFECTIVE RISK MANAGEMENT STRATEGIES
Abstract The existence of uncertainty, complexity and ambiguity in the business environment promotes the need to establish a dependable risk governance. The use of Enterprise Risk Management (ERM) has also been considered as an effective method to attain good risk governance in order to deal with both upside and downside of uncertainty and risk. ERM treats all of the risks holistically in order to achieve organization aims in volatile, normal and crisis situations. This PhD thesis will discuss issues related to the ERM implementation and how it has been adapted and implemented in the insurance market of both India and UK. Mixed methods for research have also been employed coming from a qualitative stand point in order to explore research issues, consisting two surveys in both countries, with more than 50 interviews, as well as two case studies in the country’s insurance markets. The study revealed that an ambiguity is present when it comes to understanding all definitions of ERM, as well as the risks involved across both of the countries. Background of the Study In the current environment of business, corporations faced ambiguity, volatility, and uncertainty. Understanding uncertainty and risk has posed a number of challenges, and a clear distinction between uncertainty and risk is not clear. Ramir (2000) separates uncertainty and risk according to both factors as measurability and immeasurability. It also highlights the impact of individual characteristic involved in the situation in terms of probability determination. Bernel (1998) also connected the importance of conditions to uncertainty where both measurement and rationality are vital to the process of decision making.
Research Focus The currently existing regulations in the financial industry require a high level of transparency among institutions. Terrorist attacks, cyberattacks, as well as increased volatility in the financial markets, including the bailout of the companies including the American International Group (AIG), in the recent past, leading companies to adopt their approaches beyond the Traditional Risk Management processes. Just recently, ERM has introduced a shift from a separatist approach, converting to an integrated approach in order to include both risks in a holistic way, considering them as a way to implement effective risk governance in the field of financial industry. Recent financial issues have further raised concerns for exigency in order to deal with the challenges in a holistic way. The financial markets have also become more volatile, which means that the companies has to prepare accordingly in order to deal with such crisis and volatile situations. The adoption of a higher standard of risk governance through ERM practices may offer plausible assurance to companies starting from the downside of challenges and risks, though the implementation will not be easy (Charter & Pucer, 2007). By adopting the Institutional Theory, the study will offer comparative highlights on the specific aspects of ERM that is needed to understand risk governance completely. Unfortunately, a wide ambiguity involved in the understanding of ERM surfaced. The corporates are struggling in terms of the definition of ERM, including its goals and scope. Some definitions have also been proposed, without any requirements of standardization. As such, corporates cannot find the right strategies which can deal with uncertainties and risks in order to enhance risk governance.
Future Research Future research covering the jurisdiction at a local, industry, as well as international level would be enough basis for worthwhile effort. The understanding of the concept of ERM needs the completion of more case studies which will help in understanding the institutional change, as well as its impact on strategies. There would be advantages that can be expected from presenting an international comparative study that compares ERM practices of local partnership and joint venture partnerships between India and the UK.
References Bernel, G. (1998). The rise and introduction of the Chief Risk Officer: risk management at enterprise level. Applied Corporate Finance Journal, 12(3), 45-67. Charter, G. & Pucer, G. (2007). Investigating the evolution of enterprise risk management in the insurance sector. Risk and Insurance Reports, 2(1), 23-34. Ramir, G. (2000). The relevance of disclosing risk factors in corporate yearly reports. UK Accounting Review, 34(2), 45-56.