Journal Article•
Organized uncertainty: designing a world of risk management
TL;DR: Organized Uncertainty: Designing a World of Risk Management, by Michael Power as discussed by the authors, is a book about risk management with a focus on risk management in uncertain environments.
Abstract: Organized Uncertainty: Designing a World of Risk Management, by Michael Power, is reviewed.
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TL;DR: In this article, the authors explore the transboundary dimensions of crises and disasters, discuss how an increase in "transboundedness" affects traditional crisis management challenges and investigate what administrative mechanisms are needed to deal with these compounded challenges.
Abstract: In recent years, crises have become increasingly transboundary in nature. This exploratory paper investigates whether and how the transboundary dimensions of crises such as pandemics, cyber attacks and prolonged critical infrastructure failure accentuate the challenges that public and private authorities confront in the face of urgent threats. We explore the transboundary dimensions of crises and disasters, discuss how an increase in ‘transboundedness’ affects traditional crisis management challenges and investigate what administrative mechanisms are needed to deal with these compounded challenges. Building on lessons learned from past crises and disasters, our goal is to stimulate a discussion among crisis management scholars about the political-administrative capabilities required to deal with ‘transboundary’ crises.
466 citations
Cites background from "Organized uncertainty: designing a ..."
...It is not just that the crises of the near future will be increasingly frequent and generate higher impact, as is often argued (Posner, 2004; Power, 2007)....
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TL;DR: In this paper, a more refined notion of legitimacy has been used in prior audit/assurance and sustainability accounting research, and the authors analyze how the legitimacy processes adopted by sustainability assurance practitioners in a large professional services firm have co-evolved with and impacted upon their attempts to develop this form of assurance practice.
Abstract: Based on the development of a more refined conception of legitimacy than has been used in prior audit/assurance and sustainability accounting research, this paper analyses how the legitimation processes adopted by sustainability assurance practitioners in a large professional services firm have co-evolved with and impacted upon their attempts to develop this form of assurance practice – particularly the construction of assurance statements. The analysis reveals a complex and interdependent interplay between attempts at securing pragmatic, moral and cognitive legitimacy with three key constituencies – clients who commission the sustainability assurance services; (socially constructed) non-client users of the assurance statements; and the firm’s internal Risk Department that approves the wording of assurance statements. Securing these types of legitimacy is shown to require the adoption and alignment of varying legitimation strategies according to the constituency practitioners seek to influence. Developing pragmatic legitimacy with clients depends on establishing moral legitimacy with non-client users of assurance statements while securing moral legitimacy with non-client users is contingent on acquiring pragmatic legitimacy with the firm’s internal Risk Department. The practitioners’ legitimation strategies are underpinned by a commitment to opening up dialogue within the assurance process which is evident in their engagement with potential users of assurance and their efforts to expand assurance statement content and encourage user influence over what is assured. This provides a counterpoint to Power’s (1994, 1999 ) concerns about the tendency for new assurance forms to restrict debate and dialogue and reveals a rare empirical domain where Power’s (2003b) call for more customised and informative narratives in assurance reporting is being heeded.
452 citations
Cites background from "Organized uncertainty: designing a ..."
...…content reflects features of the highly defensive internal proceduralism that has pervaded the explosion of concern for reputation risk management in many organizations whereby cultures of defensiveness disallow the creation of new forms of vulnerability (Hutter & Power, 2005; Power, 2007, 2004)....
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...Fears and anxieties about accountability and blame drive this focus, with concerns about the production of defendable proof about the management of risk predominating (Power, 2007, 2004)....
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TL;DR: Power et al. as mentioned in this paper presented field-based evidence from two large banking organizations suggesting that systematic variations in ERM practices exist in the financial services industry, and the cases illustrate four risk management ideal types and show how they form the risk management mix in a given organization.
372 citations
Cites background from "Organized uncertainty: designing a ..."
...This paper explains the differences in the two risk management mixes pointing towards alternative logics of calculation (Power, 2007), which I conceptualise and describe as different calculative cultures....
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...Accordingly, this paper emphasises the role of alternative logics of calculation (Power, 2007), which I conceptualise and describe as different calculative cultures....
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TL;DR: In this article, the organizational dynamics of enterprise risk management (ERM) are investigated through a longitudinal multiple case study, using data from three companies collected over a 7-year period (from 2002 to 2008).
Abstract: This paper explores the organizational dynamics of Enterprise Risk Management (ERM). ERM is the main form taken by firms’ increasing efforts to organize uncertainty, which ‘exploded’ in the 1990s. The ERM approach seeks to link risk management with business strategy and objective-setting, entering the domains of control, accountability and decision making. In this work, the organizational variations of ERM are investigated through a longitudinal multiple case study, using data from three companies collected over a 7-year period (from 2002 to 2008). The findings contribute to our understanding of ERM as a practice, revealing its trajectory within the organizations as it encounters pre-existing logics, and as both are shaped by risk rationalities, experts and technologies.
367 citations
Cites background from "Organized uncertainty: designing a ..."
...These failures prompted the enactment of the Sarbanes-Oxley Act (2002) in the USA, which in practice only served to exacerbate a ‘‘process-obsessed risk management of everything” (Power, 2004)....
[...]
TL;DR: In this article, the authors study the organizational drivers of internal audit effectiveness in the light of recent changes in the "mission" of internal auditing and its central role in corporate governance.
Abstract: This study attempts to understand the organizational drivers of internal audit effectiveness in the light of recent changes in the ‘mission’ of internal auditing and its central role in corporate governance. On the basis of data from 153 Italian companies, our survey shows that the effectiveness of internal auditing is influenced by: (1) the characteristics of the internal audit team, (2) the audit processes and activities, and (3) the organizational links. Internal audit effectiveness increases in particular when the ratio between the number of internal auditors and employees grows, the Chief Audit Executive is affiliated to the Institute of Internal Auditors, the company adopts control risk self-assessment techniques, and the audit committee is involved in the activities of the internal auditors.
344 citations
Cites background from "Organized uncertainty: designing a ..."
...Among the different systems adopted by companies to ensure sound corporate governance, IA has recently gained high attention due to its links with the internal control-risk management system (see, for instance, Power, 2007)....
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References
More filters
TL;DR: In this article, the authors explore the transboundary dimensions of crises and disasters, discuss how an increase in "transboundedness" affects traditional crisis management challenges and investigate what administrative mechanisms are needed to deal with these compounded challenges.
Abstract: In recent years, crises have become increasingly transboundary in nature. This exploratory paper investigates whether and how the transboundary dimensions of crises such as pandemics, cyber attacks and prolonged critical infrastructure failure accentuate the challenges that public and private authorities confront in the face of urgent threats. We explore the transboundary dimensions of crises and disasters, discuss how an increase in ‘transboundedness’ affects traditional crisis management challenges and investigate what administrative mechanisms are needed to deal with these compounded challenges. Building on lessons learned from past crises and disasters, our goal is to stimulate a discussion among crisis management scholars about the political-administrative capabilities required to deal with ‘transboundary’ crises.
466 citations
TL;DR: In this paper, a more refined notion of legitimacy has been used in prior audit/assurance and sustainability accounting research, and the authors analyze how the legitimacy processes adopted by sustainability assurance practitioners in a large professional services firm have co-evolved with and impacted upon their attempts to develop this form of assurance practice.
Abstract: Based on the development of a more refined conception of legitimacy than has been used in prior audit/assurance and sustainability accounting research, this paper analyses how the legitimation processes adopted by sustainability assurance practitioners in a large professional services firm have co-evolved with and impacted upon their attempts to develop this form of assurance practice – particularly the construction of assurance statements. The analysis reveals a complex and interdependent interplay between attempts at securing pragmatic, moral and cognitive legitimacy with three key constituencies – clients who commission the sustainability assurance services; (socially constructed) non-client users of the assurance statements; and the firm’s internal Risk Department that approves the wording of assurance statements. Securing these types of legitimacy is shown to require the adoption and alignment of varying legitimation strategies according to the constituency practitioners seek to influence. Developing pragmatic legitimacy with clients depends on establishing moral legitimacy with non-client users of assurance statements while securing moral legitimacy with non-client users is contingent on acquiring pragmatic legitimacy with the firm’s internal Risk Department. The practitioners’ legitimation strategies are underpinned by a commitment to opening up dialogue within the assurance process which is evident in their engagement with potential users of assurance and their efforts to expand assurance statement content and encourage user influence over what is assured. This provides a counterpoint to Power’s (1994, 1999 ) concerns about the tendency for new assurance forms to restrict debate and dialogue and reveals a rare empirical domain where Power’s (2003b) call for more customised and informative narratives in assurance reporting is being heeded.
452 citations
TL;DR: In this article, the organizational dynamics of enterprise risk management (ERM) are investigated through a longitudinal multiple case study, using data from three companies collected over a 7-year period (from 2002 to 2008).
Abstract: This paper explores the organizational dynamics of Enterprise Risk Management (ERM). ERM is the main form taken by firms’ increasing efforts to organize uncertainty, which ‘exploded’ in the 1990s. The ERM approach seeks to link risk management with business strategy and objective-setting, entering the domains of control, accountability and decision making. In this work, the organizational variations of ERM are investigated through a longitudinal multiple case study, using data from three companies collected over a 7-year period (from 2002 to 2008). The findings contribute to our understanding of ERM as a practice, revealing its trajectory within the organizations as it encounters pre-existing logics, and as both are shaped by risk rationalities, experts and technologies.
367 citations
TL;DR: In this article, the authors study the organizational drivers of internal audit effectiveness in the light of recent changes in the "mission" of internal auditing and its central role in corporate governance.
Abstract: This study attempts to understand the organizational drivers of internal audit effectiveness in the light of recent changes in the ‘mission’ of internal auditing and its central role in corporate governance. On the basis of data from 153 Italian companies, our survey shows that the effectiveness of internal auditing is influenced by: (1) the characteristics of the internal audit team, (2) the audit processes and activities, and (3) the organizational links. Internal audit effectiveness increases in particular when the ratio between the number of internal auditors and employees grows, the Chief Audit Executive is affiliated to the Institute of Internal Auditors, the company adopts control risk self-assessment techniques, and the audit committee is involved in the activities of the internal auditors.
344 citations
TL;DR: In this article, the authors examine why global corporate social responsibility (CSR) frameworks have gained popularity in the past decade, despite their uncertain costs and benefits, and how they affect adherents' behavior.
Abstract: This article examines why global corporate social responsibility (CSR) frameworks have gained popularity in the past decade, despite their uncertain costs and benefits, and how they affect adherents’ behavior. We focus on the two largest global frameworks—the United Nations Global Compact and the Global Reporting Initiative—to examine patterns of CSR adoption by governments and corporations. Drawing on institutional and political-economy theories, we develop a new analytic framework that focuses on four key environmental factors—global institutional pressure, local receptivity, foreign economic penetration, and national economic system. We propose two arguments about the relationship between stated commitment and subsequent action: decoupling due to lack of capacity and organized hypocrisy due to lack of will. Our cross-national time-series analyses show that global institutional pressure through nongovernmental linkages encourages CSR adoption, but this pressure leads to ceremonial commitment in develope...
336 citations