The Theory and Practice of Corporate Risk Management*

The financial crisis of 2008 and the resulting recession caught many companies unprepared and, in so doing, provided a stark reminder of the importance of effective risk management. While academic theory has long touted the benefits of risk management, companies have varied greatly in the ways and extent to which they put theory into practice. Drawing on a global survey of over 300 CFOs of non‐financial companies, the authors report that while most CFOs felt that their risk management programs have significant benefits, the risk management function in general needs more attention. A large percentage of the finance executives surveyed acknowledged that the most important corporate risks extend far beyond the CFO's direct reports, and that risk‐based thinking is not incorporated into everyday business activities or corporate strategies. A large majority of executives also said they were seeking a more widespread understanding of risk throughout their organizations—and many confessed their firms' inability, or lack of interest, in evaluating their own risk management functions. At the same time, the efforts of most companies to develop enterprise‐wide risk management (ERM) programs were said to fall well short of the comprehensive and highly coordinated programs envisioned by the proponents of such programs. Three areas of opportunity were clearly identified as having potential to improve corporate risk management in ways that increase firm value over an entire business cycle:

• ? Incorporate risk management thinking into the strategic planning process. Line executives, and not just technicians, need to be sensitive to risks, thereby building flexibility into the firm's business plan and its execution.
• ? Clearly define the objectives of the risk management function, in part by developing appropriate benchmarks. The risk management process should be subject to the same rigorous evaluation process that is used when measuring risks throughout the business.
• ? Instill a risk management culture throughout the organization. While an effective risk management function is necessary, only when employees at all levels of the company embrace risk management as part of their daily operations will the firm get maximum value from risk management.

     

客户关系的新时代

就像网络那样,CRM(客户关系管理)先是创造了一个狂热的浪潮,而随后是幻想的破灭。     

Aggregation in models with quantity constraints: The CES aggregation function

This paper is devoted to the problem of aggregation in models with quantity constraints. The focus is on quantity rationing macroeconomic (QRM) models where the micromarket outcome can be written as the minimum of several variables and where the diversity of situations across micromarkets is explicitly recognized. The aggregation result given in this paper generalizes that of Lambert (1988) to employment functions with more than two components, and leads to approximate aggregate functions of the CES variety. The approximation used can accomodate general variance-covariance structures. Simulation experiments show that the approximation error remains within reasonable bounds (1–4%). It thus seems that the CES formulation can accomodate a large variety of situations. It remains in particular valid when the (restrictive) conditions required to obtain the CES function as an exact result (independently and identically distributed Weibull variables) are not satisfied. First version received: July 1997/Final version received: March 1999     

Habits in organizational contexts: Information systems routines,cues, and rewards

The objective of the present paper is to identify and develop a framework of IS habits that individuals tend to develop in organizational contexts. Based on Duhigg's (2012) framework of habit, the paper develops a new conceptualization of IS habit as a cue–routine–reward loop. The key difference between the proposed conceptualization and those that have been used in past research is its consideration of rewards as an essential element of habit. Based on the results of an exploratory study, the proposed framework of habits incorporates several categories of IS routines, cues, and rewards, as well as five propositions that explain how individual usage behaviours develop into IS habits. The paper's findings are also likely to help improve employee task performances.     

Towards New Fiscal Rules in the Euro Area?

Intereconomics - Faced with the impossibility of reaching a political agreement to review the fiscal treaties, the Commission could limit itself to applying the current rules with flexibility,...     

The effects of heavily indebted poor countries initiative (HIPC) on millennium development goals (MDGs) for education

In this study, we employ the difference in difference approach to estimate the impact of heavily indebted poor countries initiative on Millennium Development Goals for education in Africa. Using the World Bank data for the period 1990–2015, the studies further identifies other factors that contribute to the achievement of millennium development goals for education. For instance, because of HPIC, the level of the following education MDGs indicators increased: gross enrollment in primary school (21.69%), female-to-male ratio (8.68%) and primary completion rate (13.69). Our study also show that the probability to achieve the millennium development goals for education increases in: female primary education teachers; school enrollment in tertiary, private school enrollment; pupil–teacher ratio; control of corruption and political stability and decreases with increase in the rural population. In this perspective, government of African countries should promote governance, subsidy private schools and recruit female teachers.     

Markets for standardized technologies: Patent licensing with principle of proportionality

In this paper, we study the licensing of standard-related patents among companies that employ a two-level licensing model where (i) the aggregated value of technology in the end product is divided among the integrated technologies in the product, and (ii) the value of each technology is then shared among the patent owners in proportion to the strengths of their patent portfolios in these technologies. Specifically, we develop a system dynamics simulation model for analyzing the effects of licensing costs on product and technology markets. This model is based on the modeling of three types of companies whose interactions are analyzed using non-cooperative game theory. The numerical results suggest that none of the three companies benefit from very low or very high royalty rates. In this setting, our model for two-level proportional sharing of licensing payments helps identify royalty rates which benefit all types of companies and which provide incentives for technology development and innovation.