Organisational Risk

Global pressures have resulted in a growing focus on efficiency and streamlining

The result has been flatter organisations that are increasingly stretched to control and manage risks over multiple interfaces, driven by shorter timeframes and shortening timescales.

We have identified several key issues central to understanding organisational risk from our research, namely:

  • How to achieve an adaptive yet efficient organisational culture able to manage complex risk environments?
  • How to nurture and value tacit knowledge within the organisation?
  • How to create a learning organisation with greater trust and reduced transaction costs?

Anticipating and understanding organisational risk within a specific context is critical for any organisation that wants to survive and thrive in a turbulent external environment. It requires a resilient organisational culture that can think strategically and then anticipate and adapt to change.

Wilkinson A, Elahi S, Eidinow E (2003). Special issue: RiskWorld. Journal of Risk Research, 6(4–6): p 390. – Click to enlarge.

The examples of our work on organisational risk are confidential. In each case the focus has been on identifying the range of complex global risks that are likely to impact upon the organisation in question and to build a set of scenarios of the future, so increasing internal awareness of external volatility and encouraging a resilient organisational culture that can anticipate and adapt to change. This increases the likelihood of strategic rather than reactive tactical thinking.

The adaptive manager requires multiple contacts and data, to enable him or her to respond to patterns as they emerge. An adaptive manager therefore needs an extensive reach – investing time and energy in relationships with individuals and groups outside his/her own organisation. This can lead to such a person becoming alienated from the organisation they are in – especially in hierarchical institutions. Hierarchies are essentially suspicious of networks, which pull resources in the form of people, time and money out of the organisation without the necessary clearance from the top.

Professor Frances Westley,
Professor of Strategy and Organisation, McGill University, RiskWorld interview