The role of knowledge and organizational support in explaining managers’ active risk management behavior

Abstract

PurposeEffective risk management (RM) requires not only proactive prevention, but also reactive response where the role of individual managers is pivotal as they are the main players to perform RM behavior. Hence, the key questions related to effective corporate RM can be identified as how actively managers engage in RM behaviors and how well the firm supports their RM behavior. The purpose of this paper is to understand the mechanism of managers’ engagement in an active RM behavior and highlight the role of knowledge and organizational support in explaining the mechanism.Design/methodology/approachA structural model built on the theory of planned behavior and the institutional theory is proposed to empirically examine the factors affecting managers’ RM intention. The survey of 150 senior managers from different divisions of six major companies in Korean food industry was conducted.FindingsThe data analysis brings forward three key findings: individual factors (behavioral belief about RM, social pressure and RM knowledge) positively influence RM intention; organizational factor (organizational RM support) positively affects managers’ RM knowledge; and both individual and organizational factors are affected by organizational environment and/or RM championship.Originality/valueThis study contributes to the literature by identifying the mechanism in that managers perform RM behavior voluntarily. This study also contributes to the practice by informing practitioners of the importance of implementing a company-wide RM system and motivating managers for an active RM behavior.