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Managing risk as a duality of harm and benefit: A study of organizational risk objects in the global insurance industry

Bednarek, R., Chalkias, K. and Jarzabkowski, P. ORCID: 0000-0001-8674-6628 (2019). Managing risk as a duality of harm and benefit: A study of organizational risk objects in the global insurance industry. British Journal of Management,

Abstract

This study examines how organizations construct and manage risk objects as a duality of harm-benefit within their normal operations. Itmoves beyond the existing focus on accidents, disasters and crisis. We study the risk-transfer processes of 35 insurers where they navigate the tension of retaining risk in their insurance portfolio to increase the benefit of making profit and transferring risk to reinsurance to reduce the harm of paying claims. We show that organizations’ constructions of risk are underpinned by everyday risk management practices of centralizing, calculating, and diversifying. Through variation in these practices not all organizations seek balance and we, in turn, uncover the sensemaking processes of abstracting and localizing that enable organizations to prioritize harm or benefit. This contributes to the risk literature by illuminating the co-constitutive relationship between risk sensemaking processes and everyday risk management practices. Following the complex linkages involved in the construction of risk objects as sources of harm-benefit, our analysis also contributes to the literature on dualities. It shows that while immediate trade-offs between harm-benefit occur, prioritizing one element of the duality is ultimately a means for attaining the other. Thus, while initial imbalance is evident, prioritization can be an enabling approach to navigating duality.

Publication Type: Article
Additional Information: This is the peer reviewed version of the following article: Bednarek, R., Chalkias, K. and Jarzabkowski, P. (2019). Managing risk as a duality of harm and benefit: A study of organizational risk objects in the global insurance industry. British Journal of Management, which is to be published in final form at https://onlinelibrary.wiley.com/journal/14678551. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
Publisher Keywords: risk object, duality, risk management practices, social construction of risk, insurance
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
Departments: Cass Business School > Management
URI: https://openaccess.city.ac.uk/id/eprint/23034
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