Operational Risk Management Research Articles

Assessing the Impact of Project Management Practices on the Success of Construction Projects in Zambia: A Case Study of the Construction Projects in Lusaka between 2022 and 2023

This study investigated the influence of project management practices on the success of construction projects within Zambia, focusing on selected construction projects from 2022 to 2023. The research objectives aimed at assessing current project management practices and strategies, and identifying challenges for improvement. The study used theoretical frameworks such as Project Success Theory and Project Management Theory to analyse findings comprehensively. A qualitative approach was used for this study. Interviews were utilised to collect data from construction companies and thematic analysis was used to analyse the data. The research results identified key project management practices as being crucial for success, including comprehensive planning, effective risk management, clear communication, and robust performance monitoring. Challenges such as limited awareness, stakeholder engagement issues, and deficiencies in practical implementation were uncovered. The study recommends enhancing training, stakeholder engagement, risk management, and performance monitoring. Furthermore, gaps for research include exploring gender diversity, regional variations, sustainability integration, and longitudinal project performance studies. This study contributed valuable insights to the construction industry, aiming to optimise project management practices and foster sustainable development in Zambia.

Effects of procurement risk management strategies on public procuring entities' performance

Organizations implement risk management to mitigate the effects of unforeseen events in their operation settings. The current study aims to investigate the relationship between procurement risk-management strategies and the performance of public higher-learning institutions registered by the National Council for Technical Education and Vocation Training in Tanzania. The findings of the study provide valuable insights that can influence the risk management strategies and performance management policies of public procuring entities. The Principal-Agent Theory guided the study. A convergent parallel mixed-method design was employed, utilizing a census method that included all 16 public high-learning institutions in Dar es Salaam as the sample. Primary data were collected through structured questionnaires and interviews. Quantitative data analysis involved descriptive statistics to compute percentages and means of school respondents. Multiple Regressions was employed for inferential statistics analysis. Qualitative data analysis was conducted using thematic analysis. The study identified risks affecting the performance of PEs including non-compliance risks, planning risks, managerial risks, contract management risks, and project delays. To address these challenges, the study recommends that entities should develop and adhere to their procurement plans, invest in capacity building to strengthen ethical practices to avoid unethical behavior, and address non-compliance issues. Entities should use a combination of strategies based on internal policies, experience, and the preferences of the procurement assignment.

Governance of Digital Transformation Initiatives: A Case Study of Industrial Engineering Program at Universitas Bakrie

This research aims to explore the governance of digital transformation initiatives in the Industrial Engineering Study Program, Faculty of Economics and Social Sciences, Bakrie University. Using a descriptive qualitative approach, this study identifies and analyzes how the institution manages digital change, the challenges faced, and the impact on various aspects of education. Data was collected through in-depth interviews with leaders, lecturers, administrative staff, and students, as well as observation and study of relevant documents. The findings show that the success of digital transformation depends on strong leadership, integration of technology in the curriculum, data security policies, and an organizational culture that supports innovation. Active stakeholder engagement and effective risk management strategies also play an important role in overcoming digital challenges

Analisis Deskriptif Penerapan Kecerdasan Buatan, Prediksi Integritas, Kinerja Keuangan dan Ukuran Perusahaan di Perbankan Indonesia dan Singapura Tahun 2021 – 2023

This study aims to analyze the application of artificial intelligence, integrity prediction, financial performance, and company size in the Indonesian and Singapore banking sectors during the 2021-2023 period. Secondary data is used in this study, including annual reports, financial reports, and other relevant data sources. The quantitative descriptive method was applied to analyze the collected data. The results show that the adoption of artificial intelligence in the banking sector has had a positive impact on operational efficiency, fraud detection, and risk management. In addition, corporate integrity prediction plays an important role in maintaining the stability and reputation of financial institutions, with artificial intelligence technology assisting in detecting potential risks and fraudulent activities. This study also found that firm size, as measured by total assets, contributes significantly to bank financial performance. These findings make an important contribution to the literature and provide insights for policy makers and banking practitioners to optimize the use of artificial intelligence technology and integrity prediction in improving firm performance and competitiveness.

Strengthening Indonesian Tourism Resilience Based on Tourism Operational Risk Management

Along with the rapid development of the tourism industry in Indonesia, the role of tourism risk management is becoming increasingly crucial. However, research on tourism risk management in general and tourism operational risk management in Indonesia has not been carried out much. The purpose of the study, which is also a novelty of this study, is to confirm the importance of tourism Operational Risk Management on the resilience of tourism destinations mediated by tourist satisfaction and tourist loyalty, particularly on several research objects and Indonesian tourism in general. In this article, the researcher presents a five series of studies conducted by researchers that focus on the influence of tourism operational risk management on satisfaction and loyalty. The research method used in general is the explanatory sequential design of mixed methods research. The five series of studies used in this article involve various research objects spread across several research locations to explore findings that can strengthen the validity and reliability of findings on one object in a wider area. Research samples come from domestic and foreign tourists and involve business owners, local communities, and relevant stakeholders who have met the criteria set by the researcher. These samples were generally taken using multi-stage sampling techniques. The data collection technique uses the Concurrent Triangulation Strategy regarding information convergence. The findings of five studies conducted found a positive influence of operational risk management performance on tourist satisfaction and loyalty. Value perceived by tourists represented by tourist satisfaction increases when tourist destination managers manage operational risk well. Normatively and based on the findings of previous studies, tourism resilience is built on the basis of tourist satisfaction and loyalty. Thus, strengthening operational risk management has the potential to increase Indonesian tourism's resilience.

Editorial: Enhancing Regional Resilience

Welcome to this special issue where we explore the role of hospitality services in sustaining communities especially in terms of enhancing regional resilience. In this issue, a range of topic areas are covered including service learning, operational risk management, hotel subscription models, staycations, virtual reality, cultural resilience, luxury transportation and Vanaprastha Tourism. With each of the research papers in this issue, the focus is on the provision of hospitality services and in particular the unique relationship between hosts and guests. The studies show that various factors need to come together for quality hospitality services to be delivered and that it is the interplay between hosts and guests that has important implications for organisations and associated communities. The studies highlight that hospitality is about creating spaces where a range of services are experienced, e.g., food, drink, accommodation, transportation, and entertainment. In turn, hospitality spaces are at the intersections of a range of issues such as social interactions, physical spaces, symbolic places, loyalty, transformation, embodiment, inclusivity, and resilience. These papers present insights into the importance of hospitality services to not only travellers and their experiences and memories but also to sustained social and economic activities of communities and their respective regions. They contribute significantly to understanding and knowledge of regional resilience and augment past, present and emerging discourses on the nature and role of hospitality and provision of hospitality services for enhancing regional and community resilience and sustainability. They generate ideas for policies, practices and future research. Individually and collectively, the insights provided by these papers lend opportunities for establishing resilient and sustainable hospitality operations into the future.

From building blocks to digital networks: analyzing critical drivers for social media adoption in the construction sector

Despite the growing recognition of social media’s potential benefits in the construction industry, there is a lack of in-depth research examining the specific drivers that influence its adoption. Therefore, this study fills this gap by empirically investigating the drivers influencing the adoption of social media in the construction sector of a developing country such as Nigeria. This objective was achieved through a quantitative research approach, involving the utilization of a well-structured questionnaire to gather responses from construction professionals, including architects, builders, engineers, quantity surveyors and estate managers. These professionals were sampled using a combination of purposive and snowball sampling techniques. The obtained data underwent analysis using various statistical methods, including descriptive statistics and inferential statistics such as exploratory factor analysis (EFA) and Horn Parallel Analysis. The EFA revealed four clusters of drivers: communication and collaboration, operational efficiency and risk management, marketing and branding and knowledge sharing and learning. The findings of this study offer valuable guidance for construction firms and professionals seeking to harness the power of social media. Understanding the specific drivers within each cluster can inform strategic decisions regarding the selection and implementation of social media tools.

Reducing non-technical losses in electricity distribution networks: Leveraging explainable AI and three lines of defence model to manage operational staff-related factors

This study presents a multidisciplinary approach involving Explainable Artificial Intelligence (ExAI) and operational risk management to reduce Non-Technical Losses (NTL) in electricity distribution. It empirically explores how the activities of employees of utility companies contribute to NTL, a phenomenon often overlooked in existing empirical research. An ensemble classification algorithm is used to analyse utility operations data, and the SHAP explainability technique establishes the predictive significance of staff activities for NTL. Subsequently, these staff activities are mapped into risk cells using the BASEL II and III operational risk definitions, and the Three Lines of Defence (3LoD) model is developed for optimizing electricity distribution. The paper makes three original contributions to the literature: first, it empirically links staff operations to NTL; second, it maps NTL causes to Basel II/III operational risk categories; and finally, to the best of the authors’ knowledge, it is the first study to use the 3LoD model for electricity distribution optimization.

Information and economic security of a credit institution as factors of ensuring its sustainable development

The article defines the essence of information security as an essential component of the economic security of a credit institution on the basis of many definitions of the concepts of "information security" and "economic security" formulated by different researchers taking into account different points of view. Special attention is paid to new regulatory documents regulating the security of the critical information infrastructure of the Russian Federation, ensuring the information security of the credit and financial sector, improving the operational risk management system and comprehensive modernization of corporate risk management systems in credit institutions, taking into account the new conditions for ensuring information security and the functioning of the economic security system, on the effective functioning of which the ability to a credit institution's commitment to sustainable development.

Operational risk management, financial sector stability and sustainable development in West Africa

Achieving sustainable development in West Africa is vital for integrating environmental, social and economic well-being in the region. This study examines the impact of operational risk management and financial sector’s stability on sustainable development in West Africa, focusing on countries that are members of the Economic Community of West African States (ECOWAS) from 2015 to 2022. Data from the World Development Indicators (WDI) and country Policy and Institutional Assessment (CPIA) were analyzed using the systems GMM to control for endogeneity. The study found conflicting results for financial sector stability’s impact on adjusted net savings and the sustainable development index. While financial sector stability had a negative effect on adjusted net savings, it had a positive impact on the sustainable development index. Additionally, environmental taxes were found to contribute to sustainable development by promoting efficiency and reducing carbon emissions. In conclusion, addressing operational risks, ensuring financial sector stability and promoting sustainable development can help achieve SDGs 8, 9, and 11, creating a stable, inclusive, and resilient economic environment conducive to long-term growth and sustainability in West Africa.

Financing a push and pull supply chain under revenue sharing: value addition and default risk transmission mechanism

Supply chain finance (SCF) releases participants' capital constraints and facilitates their operations. SCF and transactional contracts can have synchronised effects on participants' performance. This research analyses how credit financing and bank loans with revenue-sharing contracts can help capital-constrained suppliers and retailers improve their financial and risk management performance in the push and pull supply chains. Results suggest that SCF generates greater profits than capital-constrained supply chains without SCF and well-capitalised supply chains, demonstrating a leverage effect. In a push scenario, SCF enhances the wholesale price effect and risk-sharing effect of the revenue-sharing contract, resulting in increased order quantity and profits for participants, albeit with an amplified default risk transmission effect. Conversely, in a pull scenario, SCF boosts participant profitability by strengthening the order quantity effect of the wholesale price contract, although its risk-sharing effect is weakened by the revenue-sharing contract, thereby mitigating the default risk transmission effect. When the revenue-sharing rate is low, the push model performs better in terms of profit enhancement but exhibits higher default risk transmission levels compared to the pull model, and vice versa. The findings guide participants in leveraging SCF and revenue-sharing contracts to enhance their benefits and control the default risk transmission level.

Development of Risk Management in Supply Chain Activities Using FMEA Method and Improvement Program Through Focus Group Discussion

Development of Risk Management in Supply Chain Activities Using FMEA Method and Improvement Program Through Focus Group Discussion

Identification of Operational Risk Management Performance in Zone 1 of the Dieng Plateau, Central Java, Indonesia

Identification of Operational Risk Management Performance in Zone 1 of the Dieng Plateau, Central Java, Indonesia

Implementation of Operational Risk Management in Teller Units at Bank BCA KCU X

This research aims to determine how to implement operational risk management of teller units at PT Bank Central Asia KCU X in East Jakarta. Bank operational risks continue to evolve and require good risk management to reduce the emergence of other risks. The type of research used in this study is a quantitative method used to collect data and measure risk with the formula R = P X D. In collecting data, there are several methods used by the author, namely using participatory observation, interviews, document studies and also questionnaires involving tellers in BCA KCU X. The application of operational risk management takes place starting from the business process of the teller unit which starts from morning to evening. The business process starts with preparing the teller area, then the call to the queue for customers to transact to the end-of-day process, namely teller balancing and checking teller activity reports. The study results show that BCA has implemented operational risk management in accordance with Bank Indonesia regulations and has mitigation measures in place for the risks that occur. The benefit of this research is that it will increase insight for similar agencies in implementing reliable operational risks.

Operational risk management in managerial accounting: a comprehensive examination of strategies and implementation in medium size organizations

Operational risk management in managerial accounting: a comprehensive examination of strategies and implementation in medium size organizations

Unlocking the nexus: exploring the mediating and moderating dynamics of risk factors in economic literacy for organizational performance - A systematic review

PurposeRecognizing economic literacy as a vital form of intellectual capital provides essential tools to mitigate the adverse impact of risk factors on business organizations' performance. This recognition serves as a strong rationale for prioritizing economic literacy as a strategic asset in navigating the complexities of risk factors for sustained organizational performance. To bridge this gap, this study examines the role of risk factors in the economic literacy of an organization and how they affect organizational performance.Design/methodology/approachThis exploratory study employed a qualitative research method, utilizing a systematic review with the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) approach to identify gaps. A comprehensive search across databases was conducted using keywords related to risks, economic literacy and organizational performance. In total, 32 articles were meticulously analyzed, focusing on methodology, results and discussion sections to address research questions.FindingsThis study highlights the impact of risk factors on economic literacy and organizational performance, focusing on risk-taking, attitude, enterprise risk management (ERM), financial literacy and organizational performance. It reveals that possessing economic literacy can mitigate financial risks in corporations by helping entrepreneurs identify business opportunities and pitfalls, enabling informed and prudent financial decision-making. Conflicting findings challenge existing knowledge on the link between risk factors and financial literacy, particularly in new product development decisions, highlighting the need for further investigation into environmental factors shaping this connection.Originality/valueThe study developed a conceptual model that explains the interaction among economic literacy, risk factor and organization performance, which has implications for the development of the required intellectual capital to mitigate the impact of risk factors. Also, the study identified diverse conceptual, methodological and geographical gaps that will provide direction for future studies. Future research could delve into firm-level or cross-country data via surveys, interviews or focus groups, enriching the research's robustness and depth for nuanced insights into the investigated relationships.

Project risk management in practice: the actuality of project risk management in organizations

PurposeThis paper explores how risks are managed in project practice beyond formalized risk management processes by applying the lens of actuality research to project risk management.Design/methodology/approachThe paper follows a qualitative multimethod research approach utilizing literature review, interviews, observations and document analysis. The paper is based on three case studies and one interview study in project organizations facing green transition challenges.FindingsLittle work exists to reveal how risk management is actually done by project practitioners, and why. Few studies report on contextual variation and consider confounding factors beyond a “one size fits all” formalized explicit risk management process, despite ample evidence that risks are managed outside the formal process. The study documents that informal and/or implicit risk management activities add significantly more value.Originality/valueThe paper contributes a literature review of research into the actuality of project risk management, a sense-making framework of how risks are managed in practice beyond the formal, explicit risk-management process by including informal and/or implicit risk management activities, an empirical study of risk-management practice highlighting that informal and/or implicit risk-management activities dominate in practice, a discussion of why risks are managed outside formalized, explicit process and a research agenda to enable the design of impactful project risk-management practices.

Manajemen Rantai Pasok Digital dalam Budidaya Jangkrik: Peluang dan Tantangan

Digital supply chain management (MRPD) has become an important focus in the context of insecticide farming such as cicada cultivation. This study aims to explore the opportunities and challenges of MRPD implementation in cicada cultivation. The aim is to identify potential improvements in operational efficiency and risk management through the integration of digital technology in the cricket supply chain. The study is scheduled to be conducted for six months, with the initial phase of research focusing on literature analysis and conceptual framework, followed by primary data collection through interviews and survey. The subjects of the study include cricket farmers, feed suppliers, distributors, and end consumers. The research methods used are qualitative and quantitative approaches to gain an in-depth understanding of stakeholders' perspectives and experiences. The results of the study are expected to provide valuable insights into the benefits and constraints of implementing MRPD in cicada cultivation, as well as practical recommendations for industry stakeholders.

Sustainable Development of Entrepreneurship through Operational Risk Management: The Role of Corporate Social Responsibility

The goal of this paper was to study the role of corporate social responsibility (by the example of responsible HRM) in the sustainable development of entrepreneurship through operational risk management. The correlation analysis method was used to find a close connection between the number of employees and operational risks to international companies from “Global 500” in 2021–2023. The regression analysis method was used to compile the economic and mathematical model of the sustainable development of international entrepreneurship, which demonstrated wide opportunities for operational risk management through responsible HRM. The method of trend analysis allowed determining scenarios of the sustainable development of international entrepreneurship, which demonstrated that in the Decade of Action, the success of operational risk management is largely determined by the activity of the use of responsible HRM practices. The main conclusion is that responsible HRM facilitates the reduction of operational risks to modern companies, but practices of responsible HRM have different impacts on operational risks to companies: some practices (creation of knowledge-intensive jobs and stimulation of the innovative activity of employees through support for research talents) reduce operational risks, while some practices (stimulation of the growth of labor efficiency and attraction of female researchers to the staff) have a contradictory impact, and other practices (development of human capital through corporate training) increase operational risks. The theoretical significance is because the paper discloses the previously unknown consequences of responsible HRM as a special sphere of manifestation of corporate social responsibility for the operational risks of companies. The practical significance is because the compiled scenarios disclose the perspective of the sustainable development of companies through the improvement of the management of their operational risks based on responsible HRM. The managerial significance is that the proposed recommendations from the authors for the practical implementation of the optimistic scenario can be milestones for companies and can be used to improve the practice of operational risk management of companies.

Technology application, risk management, and business performance in construction enterprises: Basis for enhanced project management framework

Technology application, risk management, and business performance in construction enterprises: Basis for enhanced project management framework