Determinants of Risk Management Adoption in Organisations and Supply Chains

Abstract

The implementation of risk management (RM) increases the value of firms, reduces the cost of debts, increases profits and improves decision making. However, the debates on what determines RM adoption are still unresolved due to limited evidence of RM adoption in industrial settings. Therefore, this paper aims to propose a conceptual framework of the determinants that influence the adoption of RM. It has been found that two factors, the perception of risk management and risk perception, have often been neglected in prior research. Thus, this paper extends the existing literature by introducing these factors to the framework of RM adoption. It is suggested that future case studies can be conducted to examine the significance of these two factors.