Risk: a neglected component of strategy formulation

Abstract

The hypothesis that managers believe risk to be a major component of strategy formulation, with a corresponding effect on the strategic decision‐making process, was subjected to empirical examination. A total of 93 top executives of Israel's largest industrial companies, representing various business sectors, responded to the research questionnaire. Although the data supported the major research hypothesis, they also showed that managers are not inclined to use risk‐assessment models. In‐depth interviews with 21 participants supported the findings and suggested possible explanations. Recommendations regarding the formation of risk strategy and the incorporation of risk assessment models to strategic decisions are suggested.

Citation

Noy, E. and Ellis, S. (2003), "Risk: a neglected component of strategy formulation", Journal of Managerial Psychology, Vol. 18 No. 7, pp. 691-707. https://doi.org/10.1108/02683940310502395