Reduce Business Risk Research Articles

EXPERIENCE IN IMPLEMENTING ESG-STRATEGY IN CHINA: TRENDS AND RISKS

The article reflects the importance of intro-ducing ESG principles into the policies of Chinese organizations and presents the main problem of applying the ESG model. The authors reviewed statistical data on key indicators and studied the main devel-opment trends of Chinese enterprises that encourage the use of ESG strategies. The work examines the features of integrating ESG models into the policies of Chinese companies, reveals the main risks associ-ated with the modern agenda, and analyzes ESG strategy as a mechanism for reducing business risks, with an emphasis on the experience of organizations representing the Chinese market

Impact of supply chain finance on the business risk of core enterprises: evidence from China

PurposeThis study aims to explore the relationship between supply chain financing (SCF) and the business risks of core enterprises, the economic value of SCF for core enterprises and the motivation for core enterprises to participate in SCF. The authors also examine the mediating effects of financing constraints.Design/methodology/approachThis study analyzes the panel data of 393 companies listed on the main board of the A-share market in China from 2011 to 2014 using fixed-effect and intermediary-effect models.FindingsThe development of SCF in core enterprises can significantly reduce business risk by alleviating financing constraints.Research limitations/implicationsThe study sample is from China’s A-share market, which may limit the ability to generalize results. The indicators used to measure SCF primarily consider commercial credit, which may have affected the accuracy of the study.Practical implicationsThis study provides a new basis for core enterprise managers in the manufacturing sector to conduct SCF and control business risks. SCF with small and medium-sized upstream and downstream enterprises can reduce business risks and enhance competitiveness, especially under financing constraints.Originality/valueThis study focuses on core enterprises, a topic less explored in academia. It examines the impact of SCF on their performance and the mediating role of financing constraints. This study offers a novel perspective on the SCF transmission mechanism of supply chain finance and provides new insights for core enterprises.

Capital structure, profitability and risk: a study of small companies in the industrial sector of the Republic of Kazakhstan

The purpose of the study: Determining the impact of the capital structure on small companies’ performance operating in the field of industry in Kazakhstan. The problem statement. The question to be analyzed in this study is: does the capital structure aff ect the performance of small Kazakhstani companies operating in the industrial sector? Methodology: In this study, we use data from 30 small industry companies in Kazakhstan based on annual reports for 2012-2022. The total debt ratio is the dependent variable used in this study. Profi tability, business risk, tax efficiency and age of the company were taken as independent variables. Statistics, correlation and multivariate regression were used to analyze the data. Originality/value of the study: The results showed that borrowed capital is subject to factors of profi tability, tax burden, and business risk. There was no signifi cant impact of the age of the company on the borrowed capital. Relevance: This study complements the literature on capital structure factors in developing countries and the financial condition of small industrial enterprises. This research will be aimed at exploring the potential use of borrowed capital to increase the profi tability of the company to reduce business risks.

Risk Management and Different Financial Approaches to Reduce Business Risk

This article examines three different risk management methods: asset hedging by shorting stocks, cash flow hedging using forward contracts, and futures contracts. The article explains each method's rationale, application, advantages, and disadvantages. By presenting and explaining these methods, this study aims to help readers gain insights into their effectiveness in managing risk in different types of transactions. The content of the article supports the readers to have a better understanding and gives some strategies for risk management, and provides guidance for decision-makers to mitigate potential risks in their financial operations. Asset hedging by shorting stocks involves selling borrowed stocks in anticipation of a decline in their price, thereby offsetting the potential loss of a declining asset. This strategy allows an investor to profit from a decline in stock prices. Cash flow hedging through forward contracts involves entering into an agreement to buy or sell an asset at a pre-determined future price, thereby reducing the risk of adverse price movements and ensuring a stable cash flow. On the other hand, futures contracts are standardized agreements to buy or sell an asset at a future date, are traded on public markets, provide legal protection for both parties through financial intermediaries, and allow investors to lock in prices. While these risk management methods have obvious advantages, such as potential gains to offset the risk of asset depreciation during market downturns, protection against adverse price movements, and price stabilization, they also have inherent risks and limitations that need to be carefully considered.

Factors determining people’s use of renewable energy

Although awareness and preference for renewable energy is increasing, users still pay higher prices for renewable energy than for fossil fuels. Therefore, assessing renewable energy demand is necessary to find new opportunities and drivers from buyers in the upcoming flexible and competitive energy market in the context of social and environmental responsibility to enhance consumer market. A clear trend is taking place among electricity users and small-scale electricity generation investors. The development of decentralization in global power production and distribution is also quite similar to this trend. Although many of these studies have noted this trend, there are still limitations that have not been further clarified. One thing to note is that when people invest in renewable energy to make a profit, there may be some risks due to the incomplete legal and technical framework. For example, investors can ignore strict infrastructure standards, use cheap, low quality products or the ability to reduce subsidies and replace them with more market prices; Or they can aim to make a profit immediately. Therefore, people must pay attention and understand their intention to use renewable energy. This reduces business risk by supporting the development of financial and investment solutions for citizens. At the same time, setting standards and establishing a comprehensive communication plan will provide the basis and tools for the sustainable and effective development of renewable energy by the people.

Public enforcement and corporate maturity mismatch

AbstractThe root of corporate maturity mismatch in developing economies may dwell in the fact that weak contract enforcement capacities suppress financial intermediates' willingness to supply long‐term credit. This study examines the impact of improvements in the legal enforcement environment on corporate maturity mismatch, focusing on the unique setting of China's free trade zones. Using data from non‐financial listed companies between 2010 and 2021, the study investigates how the establishment of FTZs, which signifies an improvement in contract enforcement efficiency, influences firms' financing decisions and maturity mismatch. We find that improvements in the contract enforcement environment significantly discipline the behavior of raising short‐term debt for long‐term investments. The effect is more pronounced for small‐to‐medium‐sized enterprises and non‐state‐owned enterprises, suggesting that such improvements alleviate ownership and size discrimination faced by firms. Mechanism test reveals that access to long‐term loans is the core mechanism. Besides, improvements in public enforcement reduce business risk and enhance firm performance. Strengthening the legal enforcement environment serves as a critical determinant to mitigate corporate maturity mismatch and foster sustained economic development.

Changes in Nutrient Content and Physicochemical Properties of Cavendish Bananas var. Pei Chiao during Ripening

Banana is a typical tropical fruit that is widely cultivated in tropical and subtropical regions, and consumed daily because of its superior nutritional profile. This study aimed to investigate the changes in bananas’ physicochemical properties and nutritional composition from ripening stages 1 to 9. The analysis included color (peel and flesh), texture, total starch content, resistant starch content, free sugar content, minerals (calcium, magnesium, potassium, sodium, iron, phosphorus), and vitamin content. At the same time, the browning enzyme activities of polyphenol oxidase (PPO), peroxidase, oxalic acid, and tannin were also measured. In this study, the banana peel gradually changed from dark green to light green to yellow during the ripening process, eventually appearing with many black spots, while the pulp color changed from white to light yellow and decreased in brightness. The pulp became softer with a prolonged ripening period, which was inconsistent with the time point of peel color change (ripening period 4–5). However, total starch content decreased from 74% to 31%, resistant starch originally at 32% gradually decreased to 5%, and free sugar content gradually increased with increasing ripening period. Vitamin C content and PPO activity decreased significantly during the ripening period, while other vitamins and minerals did not change significantly. In contrast, oxalic acid, tannin content, and peroxidase activity were negatively correlated with the ripening period. Therefore, this study reveals the changes in the nutrient content of bananas at different ripening stages, which may provide helpful information for researchers and producers to identify suitable raw materials for producing stable and high-nutrition-value banana-related foods during the peak raw material abundance seasons while reducing business risk.

Blockchain technology concerns and corporate financial risk prevention—A quasi-natural experiment for Chinese listed A-share companies

The rapid development of blockchain technology (BT) has gained widespread attention from all sectors of society. In order to remain competitive, enterprises have responded positively to this research and development, which is conducive to the enhancement of their own digital construction. BT can provide technical support for companies to strengthen their internal management and reduce business risks caused by information asymmetry. However, the ability to reduce enterprise financial risk effectively depends on the breadth and depth of BT concerns. This study constructs word-frequency statistical variables of BT concerns based on the annual report data of listed companies. It conducts an empirical study on the issue of BT concerns affecting corporate financial risk prevention and regulation based on a propensity score matching difference-in-difference model. The results show that: (1) Attention to BT significantly reduces corporate financial risk (2) In terms of the mechanism effect, Attention to BT can significantly reduce corporate financial risk by optimizing accounts receivable management, enhancing debt servicing ability, and improving corporate performance. (3) The heterogeneity analysis shows that the concern of BT in reducing financial risk is even more significant for enterprises whose social responsibility is not effectively regulated and for hybrid enterprises. This study enriches the literature on the mechanism of BT to enterprise financial risk and provides a reference for both enterprise-level blockchain concerns and strengthening enterprise financial risk management.

Optimal dividend and proportional reinsurance strategy for the risk model with common shock dependence

. This article focuses on the classic optimal dividend and reinsurance problems. Different from the existing literature, it assumes that the insurance company has two lines of business with a common shock dependence. It can purchase proportional reinsurance to reduce business risk and pay dividends to stay competitive. The goal is to find out the optimal dividend and reinsurance strategies for maximizing the company’s value. Under the diffusion approximation model, we decomposed the problem into several situations and gave the corresponding solutions by using the stochastic control method. Some numerical examples and economic explanations are presented to illustrate the results.

Genesis of human resource management paradigms

Human Resource Management emerged as a concept in the 1980s. The rebranding of personnel management quickly gained popularity, but many organizations needed to become acquainted with the evolution of theoretical research underlying this concept. This study aims to provide a brief and accessible overview of human resource management's evolution and current research in this field. An analysis of research on the origins of human resource management is conducted, addressing issues related to the functions, roles, and strategies of managers and current debates on how human resource management affects organizational effectiveness. The results of a retrospective analysis of approaches to interpreting the "personnel management" concept are presented. The theoretical framework for defining "enterprise human resource management" is justified. The genesis of human resource management paradigms is considered from technocratic thinking, based on managerial rationalism, to future-oriented management with a priority orientation towards strategic human resource management. It is noted that mastering advanced management technologies is impossible without mastering the fundamentals of the humanistic paradigm, which provides a comprehensive understanding of the evolution and functioning of various organizations, taking into account the deep mechanisms of human behavior and the development of human potential in the face of changing external environments. Additionally, business globalization implies that human resource management professionals must be more proactive in areas such as business ethics, corporate governance, and managing employees' work-life balance. Considering the stochastic nature of the external environment, uncertainty, political and economic instability, and economic globalization, it is noted that the potential of human resources serves as a tool for reducing business risks. In these conditions, business exists for people rather than people for business. It is noted that business globalization implies that human resource management professionals must be more proactive in areas such as business ethics, corporate governance, and managing employees' work-life balance. Changes in communication and information technologies, such as the digital revolution, satellite communication, and cellular networks, will require the adoption of strategic international or global models of personnel management, which will be implemented through radically new approaches to strategies, structures, organizational culture, personnel management practices, and labor relations. Keywords: human resource management, personnel management, organizational effectiveness, productivity leadership, management, organizational culture.

경영자 능력이 사업위험에 미치는 영향

[Purpose] This study aims to analyze the impact of managerial abilities on a company’s business risks and examine whether ESG (Environmental, Social, Governance) management has a differential effect. [Methodology]The study conducts an empirical analysis on manufacturing companies listed in the Korean Stock Exchange and KOSDAQ from 2012 to 2022. It utilizes the Earnings Downside Risk (EDR) measure proposed by Konchitchki et al. (2016) as a metric for business risk and assesses Managerial Ability using the method developed by Demerjian et al. (2012a). Additionally, the study employs ESG rating data from the Korea Corporate Governance Service(KCGS). [Findings]The study reveals that ESG management significantly lowers business risk, with superior Managerial Ability playing a crucial role, especially in companies focused on ESG practices. This suggests that effective management skills in ESG－oriented companies are key to reducing business risk. [Implications]The study indicates that effective ESG management in companies can lead to long－term competitiveness and reduced business risk, with skilled managers playing a key role in achieving strategic benefits like cost savings, improved efficiency, and a better corporate image.

Pelatihan Dan Pendampingan Pengelolaan Keuangan Wanita Nelayan “Kelompok Pengolah Dan Pemasaran Hasil Tangkapan”: Upaya Meningkatkan Literasi Keuangan Di Desa Tasikmadu

Training and accompaniment in the financial management of female fishermen in catch processing and marketing groups by accounting lecturers has a significant role in increasing financial literacy in Tasikmadu Village, Prigi, Trenggalek Regency. This community service article discusses the importance of efforts to increase financial literacy. Accounting lecturers provide training on financial management and accounting practices to the Catch Processing and Marketing Group, as well as providing guidance in applying these concepts in daily business operations. Apart from that, lecturers can introduce financial management guidebooks, accounting applications and help business groups understand financial records and create accountable financial reports. The positive impacts include increasing economic prosperity, reducing business risks, sustainable growth, contributing to local economic growth, and improving the overall community economy.

Edge of Enterprise Architecture in Addressing Cyber Security Threats and Business Risks

Enterprise Architecture plays a critical role in reducing business risks holistically and ensuring a company's resilience to cyber security threats. This abstract emphasizes the significance of Enterprise Architecture in contemporary organizational structures and its influence on these matters, particularly at a time when cybersecurity threats are becoming more prevalent in the global business arena. By integrating Human Resources, Governance Frameworks, Technology, and Processes, Enterprise Architecture offers a holistic perspective of the Information Technology environment within an organization. By means of a methodical governance framework, Enterprise Architecture conducts comprehensive examinations of interdependencies among components, detects susceptibilities, and establishes robust groundwork for enhanced threat prevention. Enterprise Architecture is not only a proactive risk management tool, but it also contributes significantly to the overall business strategy. The integration of cybersecurity and enterprise architecture entails not only fortifying the technological infrastructure but also integrating it into the overarching business strategy. This enables the correlation of cybersecurity endeavors with the objectives of the organization, thereby connecting technological aspirations with business strategy. This study emphasizes the potential of incorporating adaptive and agile responses to threats into corporate culture to foster innovation. By functioning as a strategic catalyst, it assists organizations in adjusting to cyber threats, safeguarding business interests, and optimizing operations within an ever-evolving digital environment. By integrating governance and enterprise architecture frameworks, organizations can proactively mitigate business risks and cybersecurity threats, thereby fostering resilience and sustainability in the dynamic digital environment.

Social protest action, stakeholder management, and risk: Managing the impact of service delivery protests in South Africa

AbstractStakeholder management is an important method for reducing business risk. Recent decades have seen the growth of a new type of stakeholder: social protest stakeholders, individuals engaging in protest action which is directed at other unrelated parties, often the government. However, the actions of social protest stakeholders may negatively affect companies located nearby. This stakeholder category has not received any formal attention in the literature, and this article addresses the knowledge gap by exploring the effects of community‐driven protest action in South Africa and the strategies that firms adopt to mitigate the negative consequences of such protests. A multiple case study analysis was used to describe this type of stakeholder group and the management of the consequences of social protest action. Eight manufacturing companies in the Gauteng province participated in the study, the companies varied in size and industry. Among the key findings are that companies need to be highly adaptable if they are to mitigate the impact of protest action. We make practical suggestions about how companies may manage these risks, including the recommendation that companies engage more directly with social protestors to manage risks. The study makes an important contribution to the literature by identifying an additional key category of stakeholder and proposing a risk management approach to avert or minimize loss and damage.

Exploring network-based dependencies between country-level sustainability and business risks

The concept of sustainability has gained prominence in the global discourse, with increasing recognition of its impact on business risk. By integrating sustainability considerations into their strategies and operations, national policymakers and businesses can mitigate business risks and contribute to national sustainability goals. The objective of this study is to explore dependencies among the risks associated with the 17 Sustainable Development Goals (SDGs), introduced by the United Nations in 2015, and country-level business risk. In particular, this study aims to identify critical SDGs that can influence business risk based on the two extreme performance states (i.e., best and worst scenarios) of individual SDGs. A data-driven Bayesian Belief Network model is developed using two datasets on country-level sustainability performance and business risk assessment. On the one hand, ‘quality education’, ‘no poverty’, ‘affordable and clean energy’ and ‘sustainable cities and communities’ are identified as the most critical SDGs based on the negative impact of their associated risks on business risk. On the other hand, low risk (high performance) associated with the ‘peace, justice and strong institutions’, ‘life on land’ and ‘industry, innovation and infrastructure’ SDGs can reduce business risk. Strong dependencies are found between individual SDG risks and business risk, implying policymakers need to consider the implications of their sustainability initiatives on the risks and uncertainties surrounding their country's business environment.

The Mediating Role of Corporate Governance in the Relationship between the Enterprise Risk Management (ERM) Model and Reducing Business Risks in Jordanian Commercial Banks

This study aimed to identify the impact of the Enterprise Risk Management (ERM) model with its various dimensions (internal environment, setting goals, event identification, risk assessment, risk response, control activities, information and communication, monitoring) in reducing business risks in Jordanian commercial banks. In addition, the study aimed to identify the mediating role of corporate governance in the relationship between the Enterprise Risk Management (ERM) model in reducing business risks in Jordanian commercial banks.
 The population of the study consisted of all 13 Jordanian commercial banks, where the intentional sample method was used for the analysis that represented all 799 branch managers of Jordanian commercial banks. 300 questionnaires were distributed; 282 questionnaires were retrieved and 274 questionnaires were used for data analysis and testing the hypotheses for their validity. Based on the statistical results, the study concluded that there was a statistically significant impact of the Enterprise Risk Management (ERM) model with its various dimensions (internal environment, setting goals, event identification, risk assessment, risk response, control activities, information and communication, monitoring) in reducing business risks in Jordanian commercial banks. However, the internal environment dimension of the Enterprise Risk Management (ERM) model did not make a significant contribution to reducing business risks in Jordanian commercial banks. The study recommended that departments in Jordanian commercial banks develop a time-bound action plan that clarifies the roles and responsibilities related to enterprise-risk management.

Business Risk Mitigation in the Development Process of New Monoclonal Antibody Drug Conjugates for Cancer Treatment.

Recent developments aim to extend the cytotoxic effect and therapeutic window of mAbs by constructing antibody-drug conjugates (ADCs), in which the targeting moiety is the mAb that is linked to a highly toxic drug. According to a report from mid of last year, the global ADCs market accounted for USD 1387 million in 2016 and was worth USD 7.82 billion in 2022. It is estimated to increase in value to USD 13.15 billion by 2030. One of the critical points is the linkage of any substituent to the functional group of the mAb. Increasing the efficacy against cancer cells' highly cytotoxic molecules (warheads) are connected biologically. The connections are completed by different types of linkers, or there are efforts to add biopolymer-based nanoparticles, including chemotherapeutic agents. Recently, a combination of ADC technology and nanomedicine opened a new pathway. To fulfill the scientific knowledge for this complex development, our aim is to write an overview article that provides a basic introduction to ADC which describes the current and future opportunities in therapeutic areas and markets. Through this approach, we show which development directions are relevant both in terms of therapeutic area and market potential. Opportunities to reduce business risks are presented as new development principles.

Natural Disasters and Multinational Enterprises: In Denial and Unprepared, or Ready to Respond?

We identify potential opportunities for new insights as they pertain to natural disasters and to offer specific strategies and tactics for managing disaster risk. Given the increase in the number and severity of disasters in many parts of the world, learning to prepare for, and respond to, disaster risk is likely to become a critical core competency for managers over the coming years. The private sector is likely to play a vital role in mitigating disaster risk for the communities in which they operate. Companies that are better prepared may not only reduce business risk, but also maintain business continuity.

Does ESG performance reduce audit costs

This paper explores the relationship between ESG performance and corporate audit fees based on the data of A-share listed companies in Shanghai and Shenzhen in China from 2010 to 2020. The results show that firms with higher ESG levels have lower audit fees, and this relationship is more significant in non-state enterprises. The impact mechanism test confirms that ESG performance affects the level of corporate audit fees mainly through two paths: reducing business risks and enhancing corporate reputation. The heterogeneity test shows that the suppressive effect of ESG on audit fees is more significant in firms whose audit firms are the "Big Four". The findings provide a theoretical basis for the study of the economic consequences of ESG and the factors influencing audit fees.

Marketing tools for reducing business risks at innovatively oriented agricultural enterprises in the conditions of adaptation of foreign economic activity

Marketing tools for reducing business risks at innovatively oriented agricultural enterprises in the conditions of adaptation of foreign economic activity