Organizational Risk Management and Sustainability: A Practical Step-by-Step Guide

325 Pages·2017·3.828 MB·English

by  Pojasek, Robert B

Organizational Risk
Management and
Sustainability: A Practical
Step-by-Step Guide

Organizational Risk
Management and
Sustainability: A Practical
Step-by-Step Guide
by
Robert Pojasek
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2017 by Taylor & Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
Printed on acid-free paper
International Standard Book Number-13: 978-1-4987-2466-1 (Hardback)
This book contains information obtained from authentic and highly regarded sources. Reasonable
efforts have been made to publish reliable data and information, but the author and publisher cannot
assume responsibility for the validity of all materials or the consequences of their use. The authors
and publishers have attempted to trace the copyright holders of all material reproduced in this
publication and apologize to copyright holders if permission to publish in this form has not been
obtained. If any copyright material has not been acknowledged please write and let us know so we
may rectify in any future reprint.
Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced,
transmitted, or utilized in any form by any electronic, mechanical, or other means, now known
or hereafter invented, including photocopying, microfilming, and recording, or in any information
storage or retrieval system, without written permission from the publishers.
For permission to photocopy or use material electronically from this work, please access www.
copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC),
222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that
provides licenses and registration for a variety of users. For organizations that have been granted a
photocopy license by the CCC, a separate system of payment has been arranged.
Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and
are used only for identification and explanation without intent to infringe.
Visit the Taylor & Francis Web site at
http://www.taylorandfrancis.com
and the CRC Press Web site at
http://www.crcpress.com
This book is dedicated to the memory of my uncle
and first mentor, Walter J. Pojasek.

Contents
Preface .....................................................................................................................xv
Acknowledgments .............................................................................................xvii
Author ...................................................................................................................xix
Section I Foundation for Risk Management
and Organizational Sustainability
1. Understanding Organizations .....................................................................3
What Is an Organization? ...............................................................................3
Organizational Theory ....................................................................................4
Organization’s Objectives ...............................................................................5
Sphere of Influence ..........................................................................................7
Sustainability of Organizations .....................................................................8
Resilient Organizations...................................................................................9
Endnotes .........................................................................................................10
2. People, Principles, and Culture .................................................................11
Human Resources ..........................................................................................11
Open Communications ............................................................................11
Trust ............................................................................................................12
Stability of Membership or Employment ..............................................13
Performance Appraisal and Coaching ...................................................13
Organizational Culture .................................................................................13
Risk and Sustainability Culture ..................................................................15
Core Values and Principles ...........................................................................16
Principles Specified in International Standards ........................................18
Using Principles in the Risk Management Program ................................19
Endnotes ..........................................................................................................21
3. Decision Making ..........................................................................................23
Decision Making in Organizations .............................................................23
Decision-Making Process .............................................................................24
Decision-Making Techniques.......................................................................26
Model for Making a Decision .......................................................................27
Preparing to Make a Decision .................................................................27
Making the Decision ................................................................................27
Acting after the Decision .........................................................................28
Monitoring and Reviewing Actions .......................................................28
Learning .....................................................................................................29
vii
viii Contents
Sense Making .................................................................................................29
Knowledge Creation and Management ......................................................30
Transition to a Learning Organization .......................................................31
Learning ..........................................................................................................32
Endnotes ..........................................................................................................34
4. Organizational System of Management ..................................................35
Creating an Aligned Management System ................................................35
Processes in the System of Management ....................................................37
Managing for the Sustained Success of an Organization ........................39
Process Approach for the Organization .....................................................41
Embedding Sustainability ............................................................................42
Endnotes .........................................................................................................43
5. Risk Management .........................................................................................45
Understanding Organizational Risk ...........................................................45
Understanding Uncertainty .........................................................................46
Risk Management Vocabulary .....................................................................48
Adopting a Common Risk Language .........................................................49
Risk Management Framework .....................................................................50
Embedding Risk Management ....................................................................52
Endnotes ..........................................................................................................54
6. Organizational Sustainability ...................................................................55
What Is Sustainability? .................................................................................55
Organizational Sustainability ......................................................................56
Operating Responsibly ..................................................................................60
Embedding Sustainability ............................................................................61
Managing Opportunities and Threats .......................................................62
Endnotes .........................................................................................................62
Section II Structure for Planning and Implementing
Organizational Sustainability
7. An Organization’ s Objectives and Goals ................................................67
Organization’ s Mission Statement ..............................................................67
Organization’ s Objectives ............................................................................69
Goal Setting and Operational Execution....................................................70
Writing or Revising an Organization’ s Mission Statement .....................71
Developing the Objectives ............................................................................72
Developing Goals and Action Plans ...........................................................73
Sustainability Goals and Objectives ...........................................................74
Uncertainty Affects the Objectives and Goals ..........................................74
Endnotes ..........................................................................................................75
Contents ix
8. Organization’ s Internal and External Context .......................................77
Context of the Organization .........................................................................77
Internal Context .........................................................................................78
External Context ........................................................................................78
Scanning the Organization’ s Operating Environment ............................79
Scanning the Internal Environment .......................................................80
Scanning the External Environment ......................................................81
Adapting to a Changing External Context ............................................81
Finding Opportunities and Threats ............................................................82
Scanning Methods ....................................................................................83
Effective Questioning ...............................................................................83
Critical Thinking .......................................................................................84
Stability of the External Context .............................................................85
Sustainability and Context ...........................................................................86
A Path Forward ..............................................................................................87
Endnotes ..........................................................................................................88
9. Engagement with Stakeholders and Social License to Operate .........89
Stakeholders ....................................................................................................89
Internal Stakeholders ................................................................................90
External Stakeholders ...............................................................................91
Identification of Stakeholders .......................................................................91
Stakeholder Engagement ..............................................................................93
Putting Engagement into Practice ..........................................................94
Social License to Operate .........................................................................95
Internalizing Stakeholder Interests in an Organization ..........................98
Understanding the Needs and Interests of the Stakeholders .............98
Understanding the Interests of the Stakeholders .................................98
Determining the Scope of the Sustainability Program .......................98
Sustainability Framework ........................................................................99
Stakeholder Engagement around Sustainability .......................................99
Concluding Thoughts ..................................................................................100
Endnotes ........................................................................................................101
10. Organizational Governance and Leadership ........................................103
Organizational Governance .......................................................................103
Governance Principles............................................................................104
Developing the Governance System ....................................................105
Organization’ s Code of Conduct ..........................................................106
Leadership ....................................................................................................107
Mandate and Commitment ...................................................................108
Sustainability Policy ...............................................................................109
Organizational Roles, Responsibilities, and Authorities ..................111
Organizational Strategy ..............................................................................111
Endnotes ........................................................................................................114