Telecommunication risk cultures: an African head office-subsidiary comparison

Abstract

Organisational scandals or unexpected losses are usually associated with risk governance weaknesses. However, formal risk management frameworks cannot be the only measure for evaluating the effectiveness of risk governance systems. Behavioural factors, such as risk culture, supporting these risk management systems also need to be evaluated. In this study, employee perception of the risk culture of a large telecommunications company’s head-office was measured and compared with that of its dispersed African subsidiaries. The UARM Risk Culture Scale (RCS-2018) was used to provide information on two risk-culture-related factors: 1) perceived level of risk integration in decision-making in each market, and 2) perceived comfort with own risk management role. The risk culture perceptions varied between the different employee levels and between head-office and the subsidiaries. An expected result was that management tended to feel more confident about their understanding of their risk-related roles than staff in general. However, unexpectedly, the newer subsidiary companies had a more optimistic view of the perceived level of integration of risk than that of head-office personnel. This could be attributed to the limited response rates for some entities, sample composition, and greater positive response bias in the subsidiary markets. Participants indicated that communication and challenge on risks related to decision-making need to improve to increase the organisation’s risk culture. Despite this study’s sampling limitations, this work lays the foundation for further study in the company to guide interventions to strengthen or change risk culture. The lessons learned during this study are expected to be useful to academics planning to conduct a survey-based study of risk culture, and for other organisations interested in improving their risk cultures, as this exploratory academic study provides a novel view on the practical implications of measuring risk culture.