Attributes of Formalisation Risk Culture and Its Typification in the Enterprise

Abstract

Forming a risk management culture requires an understanding of the attributes of formalising a risk culture and defining its type depending on the efficiency of its certain parameters. The purpose of the study is to systematise the attributes of formalisation of risk culture and identify the type of risk culture in the enterprise. To achieve the objectives, the attributes of formalising the risk culture in the enterprise were analysed and synthesised, defining their characteristics and definition parameters. To identify the type of risk culture at the enterprise, a matrix approach was used, according to which the type of risk culture was described in two parameters: “methods and control” and “level of personnel engagement”. Each of these parameters is considered according to two qualitative levels of impact. The “methods and controls” parameter is considered in terms of the existence of hard and soft risk management controls in the enterprise. The level of “personnel engagement” parameter can be either high or low and it indicates the level of staff motivation and support of the employees by supervisors on risk management. As a result of the formalisation, four types of company risk culture were identified, characterising the behavioural patterns and motivational factors of company employees, depending on the efficiency of regulations, the understanding of risks by personnel and risk management techniques. The practical value of the findings is that each employee will understand their role and responsibilities regarding their participation in the company’s risk management system, and managers will be able to assess the level of alignment of all employees in terms of using risk management practices and determine the best management styles and practices