Modeling the process of risk management response to the negative impact of risks as the basis for ensuring economic security
Abstract
Purpose – the main purpose of the article is to form a methodological approach to counteract risks that most negatively affect the system of ensuring the economic security of engineering enterprises.
Research methodology – the research methodology involves the application of the theory of graph connections, modeling from IDEF0.
Findings – the main risks that most negatively affect the system of ensuring the economic security of engineering enterprises were identified, modeling of the main stages of response to their impact was carried out.
Research limitations – the article has a number of limitations and this applies to the area of the study. The emphasis was on the engineering industry. In addition, it should be noted that there are other modeling methods for mapping the stages of response to the negative impact of risks.
Practical implications – practical application of our methodological approach can be suitable for engineering enterprises.
Originality/Value – the originality of the study lies in the presented methodological approach to identifying the risks that most negatively affect the system of economic security of engineering enterprises and modeling the process of responding to this impact.
Keyword : risk, engineering enterprises, theory of graph connections, IDEF0 functional model, economic security
How to Cite
Kryshtanovych, S., Gutsulyak, V., Huzii, I., Helzhynska, T., & Shepitchak, V. (2021). Modeling the process of risk management response to the negative impact of risks as the basis for ensuring economic security. Business, Management and Economics Engineering, 19(2), 289-302. https://doi.org/10.3846/bmee.2021.14798
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Belles-Sampera, J., Merigó, J. M., Guillén, M., Santolino, M. (2013). The connection between distortion risk measures and ordered weighted averaging operators. Insurance: Mathematics and Economics, 52(2), 411–420. https://doi.org/10.1016/j.insmatheco.2013.02.008
Chatterjee, S., Wiseman, R. M., Fiegenbaum, A., & Devers, C. E. (2003). Integrating behavioural and economic concepts of risk into strategic management: The Twain shall meet. Long Range Planning, 36, 61–79. https://doi.org/10.1016/S0024-6301(02)00201-7
Davahli, M. R., Fiok, K., Karwowski, W., Aljuaid, A. M., & Taiar, R. (2021). Predicting the dynamics of the COVID-19 pandemic in the United States using graph theory-based neural networks. International Journal of Environmental Research and Public Health, 18(7), 3834. https://doi.org/10.3390/ijerph18073834
Di Serio, L. C., de Oliveira, L. H., & Siegert Schuch, L. M. (2011). Organizational risk management: A study case in companies that have won the Brazilian quatity award prize. Journal of Technology Management and Innovation, 6(2), 230–243. https://doi.org/10.4067/S0718-27242011000200016
Drobyazko, S., Barwinska-Malajowicz, A., Slusarczyk, B., Chubukova, O., & Bielialov, T. (2020). Risk management in the system of financial stability of the service enterprise. Journal of Risk and Financial Management, 13(12), 1–15. https://doi.org/10.1002/ijfe.2471
Head, L. G. (2009). Risk management – why and how. International Risk Management Institute, Dallas, Texas.
Islam, M. A., Tedford, J. D., & Haemmerle, E. (2006). Strategic risk management approach for small and medium-sized manufacturing enterprises (SMEs): Theoretical framework. In Proceedings of IEEE International Conference on Management of Innovation and Technology, Singapore (pp. 694–698).
Kim, H. (2020). Risk management and optimal capital structure under ambiguity. Finance Research Letters, 40, 101752. https://doi.org/10.1016/j.frl.2020.101752
Kmec, P. (2011). Temporal hierarchy in enterprise risk identification. Management Decision, 49(9), 1489–1509. https://doi.org/10.1108/00251741111173952
Knight, K. W. (2002). Developing a risk management standard – the Australian experience. Safety Science, 40, 69–74. https://doi.org/10.1016/S0925-7535(01)00042-X
Korombel, A. (2012, May 10–11). Enterprise risk management in practice of Polish small businesses – own research results. In 7th International Scientific Conference “Business and Management 2012”. Vilnius, Lithuania. Selected papers (pp. 1137–1143). Technika. https://doi.org/10.3846/bm.2012.146
Kryshtanovych, M., Petrovskyi, P., Khomyshyn, I., Bezena, I., & Serdechna, I. (2020). Peculiarities of implementing governance in the system of social security. Business, Management and Economics Engineering, 18(1), 142–156. https://doi.org/10.3846/bme.2020.12177
Merigó, J. M. (2014). Decision-making under risk and uncertainty and its application in strategic management. Journal of Business Economics and Management, 16(1), 93–116. https://doi.org/10.3846/16111699.2012.661758
Parfitt, C., & Barnes, T. (2020). Rethinking economic security in a precarious world. Critical Sociology. https://doi.org/10.1177/0896920519850266
Pauliukevičius, G., & Skusevičienė, D. (2013). Modeling of the institutional system of enterpreneurship promotion: the case of Lithuania. Business, Management and Economics Engineering, 11(2), 350–375. https://doi.org/10.3846/bme.2013.20
Pushak, Y., Lagodiienko, V., Basiurkina, N., Nemchenko, V., & Lagodiienko, N. (2021). Formation the system for assessing the economic security of enterprise in the agricultural sector. Business: Theory and Practice, 22(1), 80–90. https://doi.org/10.3846/btp.2021.13013
Regan, P. J., & Patè-Cornell, M. E. (1997). Normative engineering risk management systems. Reliability Engineering and System Safety, 57(2), 159–169. https://doi.org/10.1016/S0951-8320(97)00023-9
Shynkar, S., Gontar, Z., Dubyna, M., Nasypaiko, D., & Fleychuk, M. (2020). Assessment of economic security of enterprises: Theoretical and methodological aspects. Business: Theory and Practice, 21(1), 261−271. https://doi.org/10.3846/btp.2020.11573
Stasytytė, V. (2013). The development of an attitude towards risk management in the context of country competitiveness. Business, Management and Economics Engineering, 11(2), 281–293. https://doi.org/10.3846/bme.2013.16
Stasytyte, V., & Aleksienė, L. (2015). Operational risk assessment and management in small and medium-sized enterprises. Business: Theory and Practice, 16(2), 140–148. https://doi.org/10.3846/btp.2015.568
Sylkin, O., Kryshtanovych, M., Zachepa, A., Bilous, S., & Krasko, A. (2019). Modeling the process of applying anti-crisis management in the system of ensuring financial security of the enterprise. Business: Theory and Practice, 20, 446–455. https://doi.org/10.3846/btp.2019.41
Tamošiūnienė, R., & Savčuk, O. (2007). Risk management in Lithuanian organizations – relation with internal audit and financial statements quality. Business: Theory and Practice, 8(4), 204–213. https://doi.org/10.3846/btp.2007.29
Thevendran, V., & Mawlesley, M. J. (2004). Perception of human risk factors in construction projects: an exploratory analysis. International Journal of Project Management, 22, 131–137. https://doi.org/10.1016/S0263-7863(03)00063-2
Tohidi, H. (2011). The role of risk management in IT systems of organizations. Procedia Computer Science, 3, 881–887. https://doi.org/10.1016/j.procs.2010.12.144
Verbano, C., & Venturini, K. (2013). Managing risks in SMEs: a literature review and research agenda. Journal of Technology Management & Innovation, 8(3), 186–187. https://doi.org/10.4067/S0718-27242013000400017
Wu, Y., & Meng, F. (2019). Security classification for safe management and information resource. Journal of Strategic Security, 11(4), 72−84. https://doi.org/10.5038/1944-0472.11.4.1694
Zhi-Qiang, M., & Tao, H. (2008). Risk evaluation on technological innovation of Chinese small and medium-sized enterprises SMEs based on fuzzy neural network. In IEEE International Conference on Wireless Communication, Networking and Mobile Computing Proceedings, Niagara Falls, Canada (pp. 13067–13073). IEEE.