Managing Growth Risk: Lessons from the Current Crisis
AbstractThe current financial crisis has caused multi-billion dollar losses and broken a long period of strong and steady growth in the investment management industry. Despite the importance of strategic risks, current management practices tend to cope with them poorly, particularly when facing strategic risks linked to growth. Strategic risks are those exposures that materially affect the capacity of a company to survive. By reviewing literature and exploring how the world's top 50 banks recognize strategic risks in their annual reports, this paper highlights that these risks are not adequately perceived by the financial world and draws lessons from the current situation. Furthermore, this paper suggests a clear definition of strategic risk and shows that uncontrolled growth is a major potential source of strategic risk and increases the vulnerability of an organization. Finally, this paper discusses a number of key factors that need to be taken into account to manage growth risk effectively in order to secure sustainable value growth.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 10-027.
Length: 20 p.
Date of creation: 07 Apr 2010
Date of revision:
Publication status: Published by:
Contact details of provider:
Postal: CP114/03, 42 avenue F.D. Roosevelt, 1050 Bruxelles
Phone: +32 (0)2 650.48.64
Fax: +32 (0)2 650.41.88
Web page: http://difusion.ulb.ac.be
More information through EDIRC
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Benoit Pauwels).
If references are entirely missing, you can add them using this form.