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Sophistication of Risk IVlanagement
management reviewing (Que–
stions 2.1b). It also includes per-
sonnel/methods involved in risk
assessment (Question 2.4). Since
ttiis factor Covers the responsibili-
ty aspects of risk management
Organization
it will be calied "risk
management responsibilities".
Factor 2:
"Risk management
process, part
1"
Factor 2 summarizes some
aspects of the risk management
process. Here appear risk as–
sessment frequency (Questi–
on 2.5a) as well as the link of risk
management to business plan–
ning (Question 2.7). In addition,
the Software use for risk ma–
nagement is also covered by this
factor (Question 2.8).
Clu.slcr
M ) V A
#1
#2
#3
Total
F Ratio Sign, p
N
113
35
118
266 d f=265
Factor # 1 ; " R . m. responsibilities"
Q 2.1a Responsible for r.m. implementation Mean
0
2.1b Responsible for r.m. reviewing
Mean
Q 2.4 Risk assessment: Respons., methods Mean
1.73
2.00
2.33
2.03
8.623 0.000
Low
Low
Low
Low
1.42
1.37
1.70
1.54
5.516 0.005
Low
Low
Low
Low
1.62
1.83
1.97
1.80
4.785 0.009
Low
Low
Low
Low
Factor #2 " R . m. process, part 1 "
0
2.5a Risk assessment: Frequency
Mean
Q 2.7 Link of r.m. to business planning
Mean
Q 2.8 Risk management S o f t wa r e
Mean
2.91
2.34
1.36
2.15
72.207 0.000
High
Mod.
Mod.
Mod .
1.56
0.80
0.71
1.08
50.587 0.000
High
Mod.
Mod.
Mcxi.
1.42
1.17
1.25
1.31
2.709 0.068
Low
Low
Low
Low
Factor #3 " R . comniunication"
Q 2.6a Risk reporting to board of directors
Mean
Q 2.2 Risk management documentation
Mean
1.00
2.14
0.92
1.12
66.509 0.000
Mod .
High
Low
Mod .
0.96
3.69
0.89
1.29
126.339 0.000
Low
Mtxi .
Low
Low
Factor 3:
"Risk communlcation"
Factor 3 is concerned with cur–
rent risk Information and risk re–
porting directed at the board of
directors (Question 2.6a) as well as with the
documentation of the general risk management
regulations (Question 2.2).
Factor 4:
"Risk management process. part
2"
Factor 4 treats additional aspects of the risk
management process. Firstly, here appear the
risk categories being evaluated (Question 2.3)
and the time horizon of risk assessment (Ques–
tion 2.5b). Risk management expenditure is
also assigned to factor #4 (Question 2.9).
Having identified for the risk management vari–
ables of Table 3 and 4 factor Solution, these
factors are used as input for a düster analysis.
There is no unique way to determine the ap-
propriate number of
Clusters
to stop clustering.
In general, a 2 düster Solution allows too little
differentiation. The development of the Ward
agglomeration coefficients suggests the 4 düs–
ter Solution to be appropriate. On the other
hand, investigating with crosstabulations of the
various düster Solutions with respect to the ba–
sic variables and examining scoring means on
the Clusters revealed the 3 duster Solution to
have enough differentiation power.
Factor " 4 " R . m. process. pari 2 "
Q 2.3 Risk categories
Mean
Q 2.5b Risk assessment: Time horizon
Mean
Q 2.9 Risk management expcnditure
Mean
2.88
Mod .
1.59
Mod .
0.73
Low
3.03
Mod .
1.26
Low
0.69
Low
ONTROLLER
3.39
3.12
Mod.
Mod.
1.35
1.44
Mod .
Mod .
0.50
0.62
Low
Low
4.316 0.014
2.452 0.088
2.471 0.086
I
Table 7: ANOVA of Risk Management Scoring for Ihe 3 Clusler Solution ;
Atter having introduced the
Solution,
the demo-
graphic profile of the enterprises separated into
the 3 Clusters will be presented (Table 6). The 3
Cluster Solution has an interesting structure:
Clusters 1 and 3 contain about the same num–
ber of cases, while düster 2 Covers only 13.2%.
With regard to size by turnover, most micro and
small firms are found in düster 1. In düster 2
(having the fewest number of cases), most
firms are medium-sized or have not stated their
turnover. With respect to the number of em–
ployees, large firms concentrate on düster 2.
There are no significant difterences with re–
spect to industrial sector as well as to legal
form. Cluster 2 includes significantly more firms
being part of a group than the other Clusters.
The Clusters reveal no significant difterences
between firms that are audited and those that
are not audited. Cluster 1 comprises the largest
percentage of firms that have already establis-
hed an early warning system.
Now the risk management variables are exami-
ned with respect to the 3 düster Solution. The
ANOVA results of Table 7 show whether these
variables have significant different means wi–
thin the Clusters or not. In fact, the Cluster
means of all variables are significantly different
(some at least on the 10% level). The variables
appear in the order which the factor analysis
has established (see Table 5). For the sake of
convenience, the means have been additionally
characterized by the attributes low, moderate
or high, as introduced in Table 4.
Factor
1:
"Risk management responsibilities"
With respect to risk management responsibili–
ties for implementing and running risk manage–
ment a size effect can be observed similar to
the discussion of the basic variables. In düs–
ter #1 , where most of the micro and small firms
concentrate, there are only few persons re–
sponsible for implementing and the running the
risk management process. The board of direc–
tors is mentioned most frequently to be respon–
sible for establishing, supervising and reviewing
the risk management. This tendency continues
concerning the Identification and evaluation of
risks which is carried out mainly by the board of
directors together with the heads of the functio-
nal Units,