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Contextualising risk within enterprise risk management through the application of systems thinking

Author

Listed:
  • Lorren K. Haywood

    (Council of Scientific and Industrial Research (CSIR))

  • Greg G. Forsyth

    (Council of Scientific and Industrial Research (CSIR))

  • Willem J. Lange

    (Council of Scientific and Industrial Research (CSIR))

  • Douglas H. Trotter

    (Council of Scientific and Industrial Research (CSIR))

Abstract

New and emerging risks create growing uncertainty and unpredictability within enterprise risk management. While ISO 31000:2009 is a progressive risk management framework, it is limited in its guidance on how to contextualise complex risks. The application of systems thinking to risk management provides the opportunity to better understand complexity by viewing risk and the consequence of change as part of overall system behaviour. System modelling tools enable organisations to better contextualise their risk landscape. These tools assist organisations to identify vulnerabilities between social and ecological variables in the system within they exist. Determining drivers of change leading to system vulnerabilities can assist in understanding threshold limits of the system, thus enabling the organisation to build system resilience and organisational sustainability.

Suggested Citation

  • Lorren K. Haywood & Greg G. Forsyth & Willem J. Lange & Douglas H. Trotter, 2017. "Contextualising risk within enterprise risk management through the application of systems thinking," Environment Systems and Decisions, Springer, vol. 37(2), pages 230-240, June.
    • Handle: RePEc:spr:envsyd:v:37:y:2017:i:2:d:10.1007_s10669-017-9627-8
    DOI: 10.1007/s10669-017-9627-8
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    References listed on IDEAS

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    1. Eckles, David L. & Hoyt, Robert E. & Miller, Steve M., 2014. "The impact of enterprise risk management on the marginal cost of reducing risk: Evidence from the insurance industry," Journal of Banking & Finance, Elsevier, vol. 43(C), pages 247-261.
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    6. Martina K. Linnenluecke & Andrew Griffiths & Monika Winn, 2012. "Extreme Weather Events and the Critical Importance of Anticipatory Adaptation and Organizational Resilience in Responding to Impacts," Business Strategy and the Environment, Wiley Blackwell, vol. 21(1), pages 17-32, January.
    7. Eckles, David L. & Hoyt, Robert E. & Miller, Steve M., 2014. "Reprint of: The impact of enterprise risk management on the marginal cost of reducing risk: Evidence from the insurance industry," Journal of Banking & Finance, Elsevier, vol. 49(C), pages 409-423.
    8. Beasley, Mark S. & Clune, Richard & Hermanson, Dana R., 2005. "Enterprise risk management: An empirical analysis of factors associated with the extent of implementation," Journal of Accounting and Public Policy, Elsevier, vol. 24(6), pages 521-531.
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    Cited by:

    1. Jacqueline Y. Sánchez-García & Ana Gabriela Ramírez-Gutiérrez & Juan E. Núñez-Ríos & Pedro Pablo Cardoso-Castro & Omar G. Rojas, 2019. "Systems Thinking Approach to Sustainable Performance in RAMSAR Sites," Sustainability, MDPI, vol. 11(22), pages 1-21, November.
    2. Zachary A. Collier & James H. Lambert & Igor Linkov, 2017. "Preview of the June issue featuring literature reviews of MCDA and articles authored by students," Environment Systems and Decisions, Springer, vol. 37(2), pages 121-122, June.

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