Enterprise-Wide Risk Management in Combating Moral Hazards in Multinational Corporations (Mncs)
| Main Authors: | Maryam Abdullahi Habib, Abdul Amid Aziz Jalloh |
|---|---|
| Format: | Article eJournal |
| Bahasa: | eng |
| Terbitan: |
, 2015
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| Subjects: | |
| Online Access: |
https://zenodo.org/record/3461443 |
Daftar Isi:
- It is impractical to resolve that risk is absent in multinational corporations (MNCs), regardless of the industry. There has been inbalance between Principals and agents. As a result, that has led to the incidents termed by economists as “Moral Hazards” in organizations. Furthermore, Moral Hazards have caused major failures of high-profiled MNCs leading, but not majorly, to the cause of the global financial crisis in 2008. This study constitutes Risk Management and Risk Management Process (RMP), Enterprise Risk Management (ERM) and its framework, Benefits of ERM framework in MNCs, some moral hazards incidents in Multinational Corporations (MNCs), and how the ERM framework can be used in combating these moral hazards. Poor corporate governance in these firms has said to have given room to illegal acts that are detrimental to the organization—profitwise and reputation-wise. These deficiencies have in addition to agency problems, given rooms to immoral acts leading to Moral Hazards. The paper concludes that control, monitoring, corporate governance and risk management and linking risk management with strategies are instrumental in preventing moral hazards from occurring in MNCs. Secondary method of data collection was used to analyse and discuss findings. The study also further explains how the abovementioned factors will facilitate the cut back of unacceptable behaviours by top executives. More so, minimizing moral hazards using the ERM framework will be practicable thereby creating values for their owners. Top executives and even whistle blowers would not find it difficult to detect unwanted risks and illegal acts.