Strategic Risk Management

Strategic Risk Management represents an organizational capacity to adapt business activities to match the evolving competitive environment. This updated edition reflects the increasingly disruptive global competitive landscape. Incorporating the latest scholarly developments, the authors advance the risk leadership model to introduce a strategic drift warning system that accounts for behavioral trends across organizational hierarchies. Across five concise chapters, the book traces the evolution from enterprise risk management (ERM) toward a dynamic multidisciplinary approach to strategic risk management (SRM) with more sophisticated perspectives on strategy-making. It demonstrates how conventional models, grounded in probabilistic forecasts, compliance routines, and auditable processes, fail to capture and address emergent threats and systemic shocks. Drawing on decades of research in behavioral science, organizational theory, and dynamic capabilities, it reveals the hidden cognitive biases, social pressures, and structural frictions that distort judgment and undermine even well-designed strategies. The book contends that risk is not merely a technical challenge but a fundamentally human endeavor. Strategy execution falters not from lack of intent or motivation, but because real-world conditions, such as time pressure, cognitive overload, misaligned incentives, and flawed routines, shape behavior in predictable yet overlooked ways. To bridge the gap between strategic intent and frontline action, organizations must cultivate new forms of sensing, learning, and cross-functional collaboration. Central to the book is the emergence of strategic risk leadership (SRL), a forward-looking leadership orientation blending analytical rigor with moral purpose, psychological safety, and adaptive decision-making. SRL reframes risk governance as a sociotechnical practice enabling organizations to navigate sudden environmental shifts, systemic poly-crisis conditions, and AI-driven ambiguity. A concise yet comprehensive guide to the field, this book distills research that has stood the test of time with emerging trends to present a resource that is valuable reading for researchers, advanced students and reflective business practitioners.