Handbook of Business Strategy

Purpose – Jardine Matheson & Company is a Hong Kong multi-industry conglomerate that has gone through political upheaval, global and regional economic crises, and has survived and transformed itself several times in the process, using unique governance schemes and financial performance measures to manage risk and volatility.

Design/methodology/approach – This research paper answers the following question: how do firms manage risk? Can firms effectively use governance and financial measurements to manage risk? Is this a distinctive capability that contributes to competitive advantage and sustainability?

Findings – The analysis reveals the extent to which Jardine Matheson adapted to changes in the environment and learned from failure to manage risk.

Research limitations/implications – The research is analytical, observational and interpretive. The analytic approach is generalizable and provides insight useful to scholars and practitioners.

Practical implications – Firms seeking to reduce the volatility in their businesses (or in their stratregic business units) might restructure to allow low beta businesses to manage higher beta businesses, as in the case of Jardine Matheson & Company.

Originality/value – The research findings communicated here present a picture of Jardine Matheson’s ability to acquire, integrate and apply knowledge to manage risk and volatility of high beta businesses.