Risk Taking Propensity and Firm Internationalisation Process

Abstract

Objective: The aim of this paper is to present necessary characteristics of solutions related to risk management in the conditions of high environment turbulence from the perspective of international businesses.

Research Design & Methods: The paper is based on extensive literature review, synthesized for preeminent conceptions of risk management within operations undertaken in international environment with its proper specifics.

Findings: The paper is divided into four main parts. The first section presents the concept of business internationalisation in general. The dilemmas related to the idea of strategic risk application are discussed in the second passage. It is followed by a discussion on the risk undertaken by firms while entering into international markets. Finally, the paper presents the methods and models of risk management in international markets.

Implications & Recommendations: Knowledge of risk management models fosters management focused on survival and development of the firm, including its international growth. The catalogue of formulas for minimizing presence of unfavourable phenomena and events for the company should be enriched by experiences from the area of project management processes and project formulas of business management.

Contribution & Value Added: Present research may contribute to the construction of a rational model of the risk management process, in particular in the case of adoption of a development strategy based on the internationalisation.

Keywords

Internationalisation, risk management, risk taking propensity, strategic risk, international business, business external environment

References

1. Alcantara, L.L., & Mitsuhashi, H. (2013). Dynamics of entering politically risky foreign markets. Management Research Review, 36(6), 580-595.
2. Al-Thani, T., Merna T., & Faisal F. (2008). Corporate Risk Management. Hoboken, NJ: John Wiley & Sons.
3. Al‐Turki, U., (2011). A framework for strategic planning in maintenance. Journal of Quality in Maintenance Engineering, 17(2), 150-162.
4. Andersen, T.J. (2009). Effective risk management outcomes: exploring effects of innovation and capital structure. Journal of Strategy and Management, 2(4), 352-379.
5. AS/NZS 4360: 2004 Standards Australia, New Zealand.
6. Bielawska, A. (2006). Finanse zagraniczne MSP. Warszawa: WN PWN.
7. Buła, P. (2014). Strategic Risk in Company Activities – Methodological Approach. In J. Teczke, P. Buła & V. Grosu (Eds.). Management Science in Transition Period in Moldova and Poland, Processes and Structure in the Time of Destabilization (pp. 117-134). Cracow – Chisinau: International Management Foundation, Cracow University of Economics.
8. Buła, P., & Fudaliński J. (2010). The Chaos Theory In Managing an International Company: Example of PKN Orlen. Review of General Management, 12(2), 33-50.
9. Buła, P., & Fudaliński, J. (2013). Strategic risk in the process of obtaining the sources of financing for operations of commercial law entities in Poland, on the example of a selected company. In P. Buła, O. Druhov & J. Fudaliński, (Eds.). Management and Development of Financial Systems in Eastern European Countries Current State and Problems (pp. 41-58). Cracow: Cracow University of Economics.
10. Buła, P., Fudaliński, J., & Gorzelany–Dziadkowiec, M. (2013). The Concept of Integrated Management within small and medium-sized enterprises sectors. In J. Teczke & N. Terblanche (Eds.). Management science in transition period in South Africa and Poland (pp. 313-343). Cracow-Stellenbosch: International Management Foundation & Cracow University of Economics.
11. COSO (2004). Corporate Risk Management - Integrated Framework Structure.
12. Daszkiewicz, N., Wach, K. (2012). Internationalization of SMEs: Context, Models and Implementation. Gdańsk: Gdańsk University of Technology.
13. Daszkiewicz, N., & Wach, K. (2013). Małe i średnie przedsiębiorstwa na rynkach międzynarodowych. Kraków: Wydawnictwo Uniwersytetu Ekonomicznego w Krakowie.
14. Daszkiewicz, N., & Wach, K. (2014). Motives for Going International and Entry Modes of Family Firms in Poland. Journal of Intercultural Management, 6(2), 5-18.
15. Fałek, Z. (2011). Ekonomia i zarządzanie w teorii i praktyce. Łódź: Wydawnictwo Uniwersytetu Łódzkiego.
16. FERMA (2002). Risk Management Standard AIRMIC. Brussels: ALARM & IRM.
17. Fudaliński, J. (2013a). Efficiency as a Praxeological Measure And a Category Determining Operation Of the Third Sector Organizations – Myth Or Practice Of Action? (chapter 6). In: R. Borowiecki, A. Jaki & T. Rojek (Eds.). Contemporary Economies In the Face Of New Challenges, Economic, Social And Legal Aspects (pp. 67-80). Cracow: Cracow University of Economics.
18. Fudaliński, J. (2013b). Perspektywy rozwoju zarządzania społecznego w sektorze organizacji non profit w Polsce. Warszawa: Difin.
19. Fudaliński, J. (2014). The Issues of Shaping the Procurement Function in the Sector of Non Profit Organizations – Fiction or Challenge and a Real Problem?. In J. Teczke, P. Buła & V. Grosu (Eds.). Management Science in Transition Period in Moldova and Poland, Processes and Structure in the Time of Destabilization. (pp. 227-246). Cracow – Chisinau: International Management Foundation & Cracow University of Economics.
20. Głuchowski, J., Huterski, R., & Jaaskelainen, V., & Nielsen, H.P. (2001). Zarządzanie finansami w korporacjach międzynarodowych. Toruń: Wydawnictwo Uniwersytetu Mikołaja Kopernika w Toruniu.
21. Gorzelany-Dziadkowiec, M., & Fudaliński, J. (2013). Integrated management in small enterprises. Review General Management, 17(1), 19-48.
22. Halal, W. (2014). State of the Future: Update on Strategic Planning for the Planet. Foresight, 16(5), 483-484.
23. Staniec, I., & Klimczak, K.M. (2008). Ryzyko operacyjne. In I. Staniec & J. Zawiła-Niedźwiecka (Eds.), Zarządzanie ryzykiem operacyjnym. Warszawa: Wydawnictwo C.H. Beck.
24. Jachna, T., & Sierpińska, M. (2007). Metody Podejmowania decyzji finansowych. Warszawa: Wydawnictwo Naukowe PWN.
25. Jedynak, M., & Jedynak, P. (2014). Supply of Professional Risk Management Consulting Services as a Subject of Scientific Management Studies in Times of Destabilization. In J. Teczke, P. Buła & V. Grosu (Eds.). Management Science in Transition Period in Moldova and Poland, Processes and Structure in the Time of Destabilization (pp. 75-88). Cracow – Chisinau: International Management Foundation & Cracow University of Economics.
26. Kastberg, G. (2013). Separation and reconnection episodic organizational arenas in the strategic process. Journal of Strategy and Management, 6(3), 212-222.
27. Lock, D. (2009). Podstawy zarządzania projektami. Warszawa: Polskie Wydawnictwo Ekonomiczne.
28. Pawlak, M. (2006). Zarządzanie projektami. Warszawa: Wydawnictwo Naukowe PWN.
29. Premuroso, R.F., & Houmes, R. (2012). Financial statement risk assessment following the COSO framework: An instructional case study. International Journal of Accounting & Information Management, 20(1), 26-48.
30. Rashid, A. (2014). Firm external financing decisions: explaining the role of risks, Managerial Finance, 40(1), 97-116.
31. Staszel, A. (2009). Instytucje i programy wsparcia finansowego małych przedsiębiorstw. In H. Zadory (Ed.). Finanse małego przedsiębiorstwa w teorii i praktyce zarządzania. Warszawa: Wydawnictwo C.H. Beck.
32. Szczerbak, M. (2009). Ryzyko strategiczne. In A. Fierla (Ed.), Ryzyko w działalności przedsiębiorstw. Wybrane aspekty. Warszawa: Oficyna Wydawnicza Szkoły Głównej Handlowej w Warszawie.
33. Teczke, J. (2014). Flexibility of International Business under Destabilization Conditions. In S. Zorina, H. Łyszczarz, K. Machaczka (Eds.). Management Science in Transition Period in Moldova and Poland, Responsible Use of Resources (pp. 63-74). Cracow – Chisinau: International Management Foundation & Cracow University of Economics.
34. Terrance, L.C., (2014). Strategic budgeting instead of strategic planning. The Bottom Line: Managing Library Finances, 27(2), 49-53.
35. Urbanowska-Sojkin, E. (2013). Ryzyko w wyborach strategicznych w przedsiębiorstwach. Warszawa: PWE.
36. Vela-Jiménez, M.-J., Martínez-Sánchez, Á., Pérez-Pérez, M., & Abella-Garcés, S. (2014). How environmental changes and cooperation moderate labour flexibility and firm performance?. Personnel Review, 43(6), 915-936.
37. Villon, J., Ritala, P., & Edelmann, J. (2014). On uncertainty in supply chain risk management. The International Journal of Logistics Management, 25(1), 3-19.
38. Xueli, W., & Lin, M., (2011). What change, what stay: the mix picture of value system of Chinese business managers. Chinese Management Studies, 5(4), 422-430.
39. Wach, K. (2008). Skutki akcesji do Unii europejskiej dla polskich przedsiębiorstw. Kraków: Wydawnictwo Uniwersytetu Ekonomicznego w Krakowie.
40. Wach, K. (2012). Europeizacja małych i średnich przedsiębiorstw: rozwój przez umiędzynarodowienie. Warszawa: Wydawnictwo Naukowe PWN.
41. Wach, K. (2014a). International Strategies of Businesses: Some Evidence from Internationalised Polish Firms (Chapter 3). In A.S. Gubik & K. Wach (Eds.). International Entrepreneurship and Corporate Growth in Visegrad Countries. Miskolc: University of Miskolc.
42. Wach, K. (2014b). Theoretical Framework of the Firm-Level Internationalisation in Business Studies (chapter 1). In A. Duréndez & K. Wach K. (Eds.), Patterns of Business Internationalisation in Visegrad Countries – In Search for Regional Specifics (pp. 13-30). Cartagena: Universidad Politécnica de Cartagena.
43. Wach, K., & Wehrmann, C. (2014). Entrepreneurship in International Business: International Entrepreneurship as the Intersection of Two Fields (chapter 1). In A. S. Gubik & K. Wach (Eds.), International Entrepreneurship and Corporate Growth in Visegrad Countries. Miskolc: University of Miskolc.
44. Wereda-Kolasińska, M. (2011). Wpływ ryzyka strategicznego na wartość firmy dla akcjonariuszy. Warszawa: CeDeWu.