Publications
Publications
- November 2016 (Revised December 2016)
Strategy Execution Module 13: Identifying Strategic Risk
By: Robert Simons
Abstract
This module reading begins by describing the three sources of strategic risk—operations risk, asset impairment risk, and competitive risk—and demonstrates how these risks can undermine an entire business. To assist in the identification of these risks, the risk exposure calculator is introduced as a diagnostic tool to assess the pressures created by growth, culture, and information management. Finally, the dangerous triad of pressure, opportunity, and rationalization is discussed and analyzed to understand the conditions under which employees may be tempted to engage in misrepresentation and fraud. While this module is designed to be used alone, it is part of the Strategy Execution series. Taken together, the series forms a complete course that teaches the latest techniques for using performance measurement and control systems to implement strategy. Modules 1 - 4 set out the foundations for strategy implementation. Modules 5 - 10 teach quantitative tools for performance measurement and control. Modules 11 - 15 illustrate the use of these techniques by managers to achieve profit goals and strategies.
Keywords
Management Control Systems; Implementing Strategy; Execution; Risk Assessment; Operational Control; Asset Impairment; Franchise Risk; Fraud; Strategy; Information Management
Citation
Simons, Robert. "Strategy Execution Module 13: Identifying Strategic Risk." Harvard Business School Module Note 117-113, November 2016. (Revised December 2016.)