Risk Behaviour and Risk Management in Business

by Green, Bo; Cressy, Robert; Delmar, Frederic; Eisenberg, Theodore; Howcroft, Barry; Lewis, Mervyn

• ISBN13: 9780792358688
• ISBN10: 0792358686
• Format: Hardcover
• Copyright: 2000-05-01
• Publisher: Kluwer Academic Pub

Summary

Risk behaviour and risk management in business life influence a wide range of fields in which only a very limited amount of research has been undertaken. These topics have often been treated as if they were theoretically and practically isolated from other fields, the so called risk archipelago problem. What is actually needed is another focus, in which the problem of risk is treated as a central theme. The demand for interdisciplinary research means that there is a need for crossing scientific boundaries. In approaching risk problems from a holistic perspective there is also a parallel need for linking the scientific and the business worlds. Researchers must work closely together in concrete multidisciplinary research projects and in co-operation with the industrial world in seeking out and solving research problems of importance. This book contains selected and re-written papers, and key-note speeches presented in a risk-seminar that Stockholm University organised in June 1997. The seminar, in which 200 researchers and practitioners from 26 countries participated, was divided into four main topic areas: Risk Assessment and Credit Management, Psychology in Business Life, Risk Management in Small Firms and Law and Business Risk. In writing this book, the editor invited eight professors from four continents to assist him in introducing the reader to the different and scientific disciplines and in explaining the need for interdisciplinary, multidisciplinary and cross-disciplinary risk research projects. The book consists of eight chapters and the target groups are researchers, doctoral and master students at universities and business people working in the risk management area.

Author Biography

Bo Green is director of an interdisciplinary risk research programme at Stockholm University. He has been chief executive officer in a group of European companies, management consultant and policy adviser in business development and investigator for the Swedish government. He has unique knowledge and experience in the field of analysis of complex systems related to business condition. During 1990-1994 he chaired a national project on risk management, in which 25 researchers from different disciplines at Swedish universities participated.

Table of Contents

Foreword	ix
Cross the borders	1	(36)
Introduction	1	(2)
Bo Green
A case of communication failure in a socio-technical system-The Kegworth incident	3	(6)
David T.H. Weir
Multidisciplinary research into risk and risk management	9	(1)
Robert Cressy
Interdisciplinary risk research in credit	10	(2)
Mervyn K Lewis
Reflections on the multidisciplinary nature of research into risk in banking	12	(2)
Barry Howcroft
Reflections on the need for an interdisciplinary approach to the study of insolvency risk	14	(1)
Theodore Eisenberg
Reflections on how to introduce doctoral students to the complex scientific field of risky business	15	(2)
Robert W Vivian
Psychological perspectives on risk management	17	(3)
James Shanteau
Why is it important for researchers to study complex systems in our world from an interdisciplinary approach?	20	(3)
David T.H. Weir
Reflections on the need for a holistic view in research projects	23	(3)
Barry Howcroft
Analysis of complex systems related to business conditions	26	(11)
Bo Green
Risk assessment and credit management	37	(86)
Introduction	37	(4)
Mervyn K Lewis
Risk measurement and management-implementing quantitative models assessing capital at risk in a traditional banking environment	41	(7)
Per Lundberg
The decentralised loan organisation	48	(2)
Lars Silver
A credit intelligence approach to service design in banks	50	(11)
Katarina Svensson Kling
Knowledge-based decision systems for the management of small business risks	61	(9)
David T Kresge
Trade credit in Europe today-Credit cultures, payment morality and legal systems	70	(17)
Katarina Svensson Kling
Demand for credit and influences on payment behaviour	87	(11)
Barbara Summers
Nicholas Wilson
The next property cycle: a survival kit for banks	98	(12)
Mervyn K Lewis
Uncertainty in real estate appraisals	110	(7)
Mats Ekelid
Hans Lind
Stellan Lundstrom
Erik Persson
Leasing and property risk: The South Australian experience	117	(6)
Wayne A Marano
Mervyn K Lewis
Psychology in business life	123	(74)
Introduction	123	(4)
James Shanteau
The development of conversation-based process tracing methods for the study of naturalistic decision making	127	(10)
Rob Ranyard
Janis Williamson
Lisa Cuthbert
Reflective versus nonreflective decision making: The case of credit decisions in business	137	(10)
Henry Montgomery
Trust between entrepreneurs and external actors	147	(4)
Leif Sanner
Social/psychological barriers to successful management of technological innovation	151	(8)
James Shanteau
Clarence Rohrbaugh
The impact of non-financial factors on the decision making by credit assessors dealing with the threat of insolvency	159	(9)
Lisbeth Hedelin
Business risks in service companies due to poor temporal assessment	168	(8)
Fabian von Scheele
Task characteristics and expertise	176	(10)
Anna Mette Fuglseth
Kjell Gronhaug
Why do experts disagree?	186	(11)
James Shanteau
Innovation, growth and entrepreneurship	197	(28)
Introduction	197	(3)
Frederic Delmar
Towards a better understanding of risk in entrepreneurial decision making	200	(4)
Jan P. Warhuus
The characteristics of high-growth firms and their job contribution	204	(9)
Per Davidsson
The assessment of business opportunities-A comparison between informal investors and institutional venture capitalists	213	(6)
Hans Landstrom
Innovation strategy and management control systems: Linking long-term objectives with short-term actions	219	(6)
Istemi Demirag
Andrew Tylecote
Loan guarantees schemes in risk management	225	(32)
Introduction	225	(3)
Robert Cressy
European union enterprise policy and loan guarantee schemes	228	(7)
Rudy Aernoudt
European loan guarantee schemes	235	(12)
Rudy Aernoudt
Government guarantee schemes in Europe: Who has them? Who pays? Who gains?	247	(10)
Robert Cressy
Insolvency risks and the role of insolvency law	257	(46)
Introduction	257	(4)
Theodore Eisenberg
Does a reorganisation law improve the efficiency of the insolvency law? The Finish experience	261	(11)
Stefan Sundgren
Should we abolish chapter 11: Evidence from Canada	272	(4)
Timothy C.G. Fisher
Cash auction bankruptcy: Summary of the Swedish evidence	276	(3)
Karin S. Thorburn
Methodological issues in bankruptcy prediction	279	(9)
Clas Bergstrom
Are mandatory bankruptcy auctions more efficient?	288	(7)
B. Espen Eckbo
Karin S. Thorburn
Crisis and recovery: Post-Recessional changes in UK bank lending practice	295	(6)
Barry Howcroft
Reflections on how the bankruptcy system as a whole functions	301	(2)
Bo Green
Insurable risks in business	303	(26)
Introduction	303	(2)
Robert W Vivian
Losses of receivables-a threat to small businesses. The role of a credit insurance company in providing risk coverage for growth companies	305	(9)
Wolf-Ingo Darius
A legislative framework for risk-taking built on insurance experience	314	(4)
Bjorn Palmgren
The limits of insurability and its application to business risks	318	(11)
Robert W Vivian
The role of the supervisory authorities in the financial system	329	(28)
Introduction	329	(2)
Dirk Schoenmaker
The role of the central bank	331	(2)
Dirk Schoenmaker
The role of the supervisory authority in the financial system	333	(10)
Charlotte Moller Wedel-Heinen
The regulator's attitude to risk taking in the financial system	343	(3)
Peter Wendt
Risk limitations for financial institutions and the need for venture capital in new and innovative enterprises	346	(4)
Bjorn Palmgren
The banking crisis and the challenge for regulation	350	(3)
Liisa Halme
The role of the banks in the financial system	353	(4)
Bo Green
References	357