An Integrated Risk Management Approach to Proactive Management of Opportunity and Threat: A Framework and Rule Language

Abstract

The extremely uncertain current global business environment requires organizations adopt more effective risk management approaches that allow sustainable development by properly coping with threats and exploiting opportunities. Most existing research efforts in related fields, however, have focused on reducing potential threats only reactively. This dissertation proposes a comprehensive and proactive risk management approach. First, it provides a new definition of risk and classifies it into three sub-categories: threat, opportunity, and neutral risk. Second, it analyzes behavioral requirements of proactive risk management, which will explain the required activities for managing threat, opportunity, and neutral risk proactively. Third, it proposes a framework for proactive risk management that will enable timely monitoring and handling of a risk. Fourth, it proposes a rule language that will serve as an implementation model for systematic support of the proposed proactive risk management. Finally, this dissertation presents an architecture and a prototype system to demonstrate the feasibility of the proposed framework and rule language. The proposed approach is expected to overcome the limitations of existing risk management approaches by allowing more comprehensive and timely handling of threats and opportunities by identifying all the activities, and when and where they must be applied.