Filter Results: (29) Arrow Down

Risk ManagementRemove Risk Management →

New research on risk management from Harvard Business School faculty on issues including the role, organization, and limitations of risk identification and risk management, banks' risk exposures, and dealing with supply chain risk.
Page 1 of 29 Results →

Elusive Safety: The New Geography of Capital Flows and Risk

by Laura Alfaro, Ester Faia, Ruth Judson, and Tim Schmidt-Eisenlohr

Examining motives and incentives behind the growing international flows of US-denominated securities, this study finds that dollar-denominated capital flows are increasingly intermediated by tax haven financial centers and nonbank financial institutions.

Strategic Foresight as Dynamic Capability: A New Lens on Knightian Uncertainty

by J. Peter Scoblic

Creating strategy under conditions of uncertainty is not easy, so many managers rely on a single analogy to past experience to guide their decisions. This paper argues, by contrast, that imagining multiple possible futures can be a more useful guide to uncertainty, improving judgment and adaptability in the face of change.

What Are Lessons for Leaders from This Black Swan Crisis?

by James Heskett

SUMMING UP: Readers of this month's James Heskett post disagree on whether COVID-19 is a Black Swan event, but most argue that organizations must be better prepared for inevitable downturns. Open for comment; 0 Comments.

Novel Risks

by Robert S. Kaplan, Dutch Leonard, and Anette Mikes

Companies can manage known risks by reducing their likelihood and impact. But such routine risk management often prevents them from recognizing and responding rapidly to novel risks, those not envisioned or seen before. Setting up teams, processes, and capabilities in advance for dealing with unexpected circumstances can protect against their severe consequences.

Crowdsourcing Is Helping Hollywood Reduce the Risk of Movie-Making

by Michael Blanding

Hollywood insiders have created "The Black List," which helps surface good but often overlooked scripts. Does the wisdom of the crowd work at the box office? Research by Hong Luo. Open for comment; 0 Comments.

The Hidden Cost of a Product Recall

by Danielle Kost

Product failures create managerial challenges for companies but market opportunities for competitors, says Ariel Dora Stern. The stakes have only grown higher. Open for comment; 0 Comments.

The Business of Saving the Planet

by Sean Silverthorne

The biggest challenge facing today's business leaders? Putting their operations in harmony with the environment. Read the latest research around building sustainability into business processes and management practices. Open for comment; 0 Comments.

How Big Companies Can Outrun Disruption

by Martha Lagace

Large companies can be easy targets for disruption, but Gary Pisano says there are steps that can keep them ahead of the innovation curve. Rule 1: Don't emulate startup cultures. Open for comment; 0 Comments.

The Better Way to Forecast the Future

by Roberta Holland

We can forecast hurricane paths with great certainty, yet many businesses can't predict a supply chain snafu just around the corner. Yael Grushka-Cockayne says crowdsourcing can help. Open for comment; 0 Comments.

What’s the Best Administrative Approach to Climate Change?

by James Heskett

SUMMING UP: James Heskett's readers point to examples of complex environmental problems conquered through multinational cooperation. Can those serve as roadmaps for overcoming global warming? Open for comment; 0 Comments.

A Measure of Risk Appetite for the Macroeconomy

by Carolin E. Pflueger, Emil Siriwardane, and Adi Sunderam

This paper sheds new light on connections between financial markets and the macroeconomy. It shows that investors’ appetite for risk—revealed by common movements in the pricing of volatile securities—helps determine economic outcomes and real interest rates.

Cut Salaries or Cut People? The Best Way to Survive a Downturn

by Rachel Layne

When times are tight, companies usually respond with employee layoffs. But what if they held on to workers and cut their salaries instead? New research by Christopher Stanton and colleagues has the answer. Open for comment; 0 Comments.

How Companies Managed Risk (and Even Benefitted) in World War Internment Camps

by Julia Hanna

Foreign businesses located in at-war countries are often victims of expropriation. Historian Valeria Giacomin explores how German businesses in the United Kingdom and India mitigated risk and even benefitted when their employees were placed in internment camps during the World Wars. Open for comment; 0 Comments.

Op-Ed: Courage: The Defining Characteristic of Great Leaders

by Bill George

Courageous leaders inspire employees, energize customers, and position their companies on the front lines of societal change. Bill George explains why there aren't more of them. Open for comment; 0 Comments.

Fiscal Risk and the Portfolio of Government Programs

by Samuel G. Hanson, David S. Scharfstein, and Adi Sunderam

In modern economies, a large fraction of economy-wide risk is borne indirectly by taxpayers via the government. Governments have liabilities associated with retirement benefits, social insurance programs, and financial system backstops. Given the magnitude of these exposures, the set of risks the government chooses to bear and the way it manages those risks is of great importance. This study develops a new model for government cost-benefit analysis, and shows that distortionary taxation impacts the optimal scale and pricing of government programs. It also highlights the interaction between social and fiscal risk management motives, which frequently come into conflict.

Risk Management―The Revealing Hand

by Robert S. Kaplan and Anette Mikes

This article explores the role, organization, and limitations of risk identification and risk management, especially in situations that are not amenable to quantitative risk modeling. It argues that firms can avoid the artificial choice between quantitative and qualitative risk management, allowing both to play important roles in surfacing and assessing risks. Managers can then make decisions and allocate resources to mitigate the risks in a cost-efficient and moral manner.

Risk Preferences and Misconduct: Evidence from Politicians

by Dylan Minor

Risk-taking is widely understood to be a vital aspect of leadership, yet it may have a dark side. This study of financial risk-taking among politicians shows risk preferences to be an important antecedent of misconduct. Risk preferences as measured by portfolio choices between risky and safe investments were found to strongly predict political scandals. When employing risk-taking leaders, this suggests a potential tradeoff between performance and misconduct.

Leadership Lessons of the Great Recession: Options for Economic Downturns

by Sandra Sucher & Susan Winterberg

In the new case study “Honeywell and the Great Recession,” Sandra Sucher and Susan Winterberg explore employer tradeoffs when a downturn hits: conducting layoffs vs. orchestrating furloughs. Plus: Video interviews with Honeywell CEO Dave Cote. Open for comment; 0 Comments.

Banks’ Risk Exposures

by Juliane Begenau

Since the financial crisis, there has been renewed interest in documenting how much risk financial institutions are exposed to. This paper shares the important goal of that scholarship: to come up with a method that summarizes banks' positions in a meaningful way so that it will inform the theoretical modeling of these institutions and offer insights for policy decisions. Specifically, the paper measures banks' exposures to macroeconomic risk through their fixed income positions by representing those positions in terms of simple factor portfolios. Factor portfolios provide measures of exposure that are easy to interpret and compare across positions. The results help elucidate the evolution of bank risk taking over the last 20 years. Closed for comment; 0 Comments.

When Good Incentives Lead to Bad Decisions

by Carmen Nobel

New research by Associate Professor Shawn A. Cole, Martin Kanz, and Leora Klapper explores how various compensation incentives affect lending decisions among bank loan officers. They find that incentives have the power to change not only how we make decisions, but how we perceive reality. Closed for comment; 0 Comments.