Risk leveling in business environments. A novel approach for macro risk management

Abstract

Purpose: The purpose of this study is to presents a specialized risk management approach and a structured risk management methodology for optimizing the macro business environments in turbulent business spheres. Design/methodology/approach: In this work, we present a specialized approach called ‘Risk Leveling’, and an organized risk management methodology known as ‘Risk Leveling in Business Environments (RLBE)’. The Risk Leveling approach guides on how to deal with the contextual turbulences in order to attempt the ideal business settings, and the RLBE methodology provides an operational procedure to evaluate and manage the macro risks in a designated way. RLBE follows a multi-tier approach towards divergent risks and focuses on balancing the risky macro environs facing the business (segment). While observing risk mitigations, this approach recommends utilizing the available resources in a systematic and efficient way. The RLBE procedure directs how to reduce the risks to match them with the enterprises’ risk tolerance; it also attempts to diminish the mutual risk disparities giving rise a context in which no risk is seen too big or too small comparative to the others. In order to actualize the desired, the RLBE process utilizes a mix of group decision methods (i.e. Brainstorming, Delphi, Three Point Estimates), analysis tools (i.e. Analytical Hierarchy Process (AHP)), and philosophies (i.e. As Low As Reasonably Practicable (ALARP)) in an orderly fashion. Findings: Risk Leveling procedure presented in the study adopts the standard risk management process, attempts to pacify macro risks, and strives to achieve risk leveled environments for the industry. During its course to pursue the best business settings, RLBE favors to conserve the scarce organizational resources by utilizing them systematically. Originality/value: This approach can be practiced by the regimes to pacify and regulate the macro risks in the turbulent market segments.