Abstract

OKANGA, B. Scaling operational risk management to leverage a firm's value configuration and creation. JCMAN [online]. 2017, vol.14, n.1, pp.1273-1313. ISSN 1815-7440.

Operational risk management leverages a firm's value configuration and creation. However, research on the scalability of operational risk management as a catalyser of value configuration and creation seems yet elusive in most of the contemporary management studies. To address such a gap, this research uses confirmatory factor analysis to test and validate the underpinning null hypothesis that operational risk management spawns value configuration and creation to spur a firm's overall competitiveness and effective market performance. If strategically linked to the process of value configuration and creation, findings revealed it is during the consistent process of analysis, identification and mitigation of operational disruptions, errors and wastes that operational risk management enhances identification of new value drivers and the enrichment of the existing value drivers. Subsequently, all these were found to spur improved quality excellence, process efficiency and cost minimisation that in turn induce a firm's improved competitiveness and its overall effective market performance. Basing on these findings, the study concludes with a framework that businesses can replicate when seeking to scale operational risk management to leverage the overall effectiveness of a firm's value configuration and creation.

Keywords : Firm's value configuration and creation; leveraging effects; operational risk management and value drivers.

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