Knowledge management applied to enterprise risk management

Risk and knowledge are two concepts and components of business management which have so far been studied almost independently. This is especially true where risk management (RM) is conceived mainly in financial terms, as for example, in the financial institutions sector. Financial institutions are affected by internal and external changes with the consequent accommodation to new business models, new regulations and new global competition that includes new big players. These changes induce financial institutions to develop different methodologies for managing risk, such as the enterprise risk management (ERM) approach, in order to adopt a holistic view of risk management and, consequently, to deal with different types of risk, levels of risk appetite, and policies in risk management. However, the methodologies for analysing risk do not explicitly include knowledge management (KM). This research examines the potential relationships between KM and two RM concepts: perceived quality of risk control and perceived value of ERM. To fulfill the objective of identifying how KM concepts can have a positive influence on some RM concepts, a literature review of KM and its processes and RM and its processes was performed. From this literature review eight hypotheses were analysed using a classification into people, process and technology variables. The data for this research was gathered from a survey applied to risk management employees in financial institutions and 121 answers were analysed. The analysis of the data was based on multivariate techniques, more specifically stepwise regression analysis. The results showed that the perceived quality of risk control is significantly associated with the variables: perceived quality of risk knowledge sharing, perceived quality of communication among people, web channel functionality, and risk management information system functionality. However, the relationships of the KM variables to the perceived value of ERM are not identified because of the low performance of the models describing these relationships. The analysis reveals important insights into the potential KM support to RM such as: the better adoption of KM people and technology actions, the better the perceived quality of risk control. Equally, the results suggest that the quality of risk control and the benefits of ERM follow different patterns given that there is no correlation between both concepts and the distinct influence of the KM variables in each concept. The ERM scenario is different from that of risk control because ERM, as an answer to RM failures and adaptation to new regulation in financial institutions, has led organizations to adopt new processes, technologies, and governance models. Thus, the search for factors influencing the perceived value of ERM implementation needs additional analysis because what is improved in RM processes individually is not having the same effect on the perceived value of ERM. Based on these model results and the literature review the basis of the ERKMAS (Enterprise Risk Knowledge Management System) is presented.

Negative data in DEA:a directional distance approach applied to bank branches

This paper is drawn from the use of data envelopment analysis (DEA) in helping a Portuguese bank to manage the performance of its branches. The bank wanted to set targets for the branches on such variables as growth in number of clients, growth in funds deposited and so on. Such variables can take positive and negative values but apart from some exceptions, traditional DEA models have hitherto been restricted to non-negative data. We report on the development of a model to handle unrestricted data in a DEA framework and illustrate the use of this model on data from the bank concerned.

Managing people and performance:An evidence based framework applied to health service organizations

People and their performance are key to an organization's effectiveness. This review describes an evidence-based framework of the links between some key organizational influences and staff performance, health and well-being. This preliminary framework integrates management and psychological approaches, with the aim of assisting future explanation, prediction and organizational change. Health care is taken as the focus of this review, as there are concerns internationally about health care effectiveness. The framework considers empirical evidence for links between the following organizational levels: 1. Context (organizational culture and inter-group relations; resources, including staffing; physical environment) 2. People management (HRM practices and strategies; job design, workload and teamwork; employee involvement and control over work; leadership and support) 3. Psychological consequences for employees (health and stress; satisfaction and commitment; knowledge, skills and motivation) 4. Employee behaviour (absenteeism and turnover; task and contextual performance; errors and near misses) 5. Organizational performance; patient care. This review contributes to an evidence base for policies and practices of people management and performance management. Its usefulness will depend on future empirical research, using appropriate research designs, sufficient study power and measures that are reliable and valid.

Functional source separation applied to induced visual gamma activity

Objective of this work was to explore the performance of a recently introduced source extraction method, FSS (Functional Source Separation), in recovering induced oscillatory change responses from extra-cephalic magnetoencephalographic (MEG) signals. Unlike algorithms used to solve the inverse problem, FSS does not make any assumption about the underlying biophysical source model; instead, it makes use of task-related features (functional constraints) to estimate source/s of interest. FSS was compared with blind source separation (BSS) approaches such as Principal and Independent Component Analysis, PCA and ICA, which are not subject to any explicit forward solution or functional constraint, but require source uncorrelatedness (PCA), or independence (ICA). A visual MEG experiment with signals recorded from six subjects viewing a set of static horizontal black/white square-wave grating patterns at different spatial frequencies was analyzed. The beamforming technique Synthetic Aperture Magnetometry (SAM) was applied to localize task-related sources; obtained spatial filters were used to automatically select BSS and FSS components in the spatial area of interest. Source spectral properties were investigated by using Morlet-wavelet time-frequency representations and significant task-induced changes were evaluated by means of a resampling technique; the resulting spectral behaviours in the gamma frequency band of interest (20-70 Hz), as well as the spatial frequency-dependent gamma reactivity, were quantified and compared among methods. Among the tested approaches, only FSS was able to estimate the expected sustained gamma activity enhancement in primary visual cortex, throughout the whole duration of the stimulus presentation for all subjects, and to obtain sources comparable to invasively recorded data.

Vibrational methods applied to NDT testing and fluid density measurement

A system for the NDI' testing of the integrity of conposite materials and of adhesive bonds has been developed to meet industrial requirements. The vibration techniques used were found to be applicable to the development of fluid measuring transducers. The vibrational spectra of thin rectangular bars were used for the NDT work. A machined cut in a bar had a significant effect on the spectrum but a genuine crack gave an unambiguous response at high amplitudes. This was the generation of fretting crack noise at frequencies far above that of the drive. A specially designed vibrational decrement meter which, in effect, measures mechanical energy loss enabled a numerical classification of material adhesion to be obtained. This was used to study bars which had been flame or plasma sprayed with a variety of materials. It has become a useful tool in optimising coating methods. A direct industrial application was to classify piston rings of high performance I.C. engines. Each consists of a cast iron ring with a channel into which molybdenum, a good bearing surface, is sprayed. The NDT classification agreed quite well with the destructive test normally used. The techniques and equipment used for the NOT work were applied to the development of the tuning fork transducers investigated by Hassan into commercial density and viscosity devices. Using narrowly spaced, large area tines a thin lamina of fluid is trapped between them. It stores a large fraction of the vibrational energy which, acting as an inertia load reduces the frequency. Magnetostrictive and piezoelectric effects together or in combination enable the fork to be operated through a flange. This allows it to be used in pipeline or 'dipstick' applications. Using a different tine geometry the viscosity loading can be predoninant. This as well as the signal decrement of the density transducer makes a practical viscometer.

Numerical Comparison of the Drag Models of Granular Flows Applied to the Fast Pyrolysis of Biomass

The paper presents a comparison between the different drag models for granular flows developed in the literature and the effect of each one of them on the fast pyrolysis of wood. The process takes place on an 100 g/h lab scale bubbling fluidized bed reactor located at Aston University. FLUENT 6.3 is used as the modeling framework of the fluidized bed hydrodynamics, while the fast pyrolysis of the discrete wood particles is incorporated as an external user defined function (UDF) hooked to FLUENT’s main code structure. Three different drag models for granular flows are compared, namely the Gidaspow, Syamlal O’Brien, and Wen-Yu, already incorporated in FLUENT’s main code, and their impact on particle trajectory, heat transfer, degradation rate, product yields, and char residence time is quantified. The Eulerian approach is used to model the bubbling behavior of the sand, which is treated as a continuum. Biomass reaction kinetics is modeled according to the literature using a two-stage, semiglobal model that takes into account secondary reactions.

Sol–gel derived coating applied to long-period gratings for enhanced refractive index sensing properties

Long-period fibre gratings (LPGs) have previously been used to detect quantities such as temperature, strain, and refractive index (RI). We report here, to the best of our knowledge, the first investigation on refractive index sensing properties of LPGs with sol–gel derived titanium and silicon oxide coatings. It is revealed that the RI sensitivity of an LPG is affected by both the thickness and the index value of the coating; a coating with higher index and thickness will enhance the LPG RI sensitivity significantly. The surrounding refractive index induced LPG resonance shift has been evaluated over the LPGs' most sensitive RI region from 1.42 to 1.44. We have identified that, in this region, the uncoated LPG has an RI sensitivity of (-673.0 ± 0.4) nm/uri (unit of refractive index) while the LPG coated with titanium oxide exhibits a sensitivity as high as (-1067.15 ± 0.04) nm/uri. The experimental results also reveal that, even in the RI insensitive region around 1.33, there still is a marked enhancement in RI sensitivity of the sol–gel coated LPG compared to the uncoated one. This is potentially significant as coated LPGs may be extended to low RI gas and semi-liquidized based sensing applications.

Forecasting and risk analysis applied to management planning and control

The aim of this research was to improve the quantitative support to project planning and control principally through the use of more accurate forecasting for which new techniques were developed. This study arose from the observation that in most cases construction project forecasts were based on a methodology (c.1980) which relied on the DHSS cumulative cubic cost model and network based risk analysis (PERT). The former of these, in particular, imposes severe limitations which this study overcomes. Three areas of study were identified, namely growth curve forecasting, risk analysis and the interface of these quantitative techniques with project management. These fields have been used as a basis for the research programme. In order to give a sound basis for the research, industrial support was sought. This resulted in both the acquisition of cost profiles for a large number of projects and the opportunity to validate practical implementation. The outcome of this research project was deemed successful both in theory and practice. The new forecasting theory was shown to give major reductions in projection errors. The integration of the new predictive and risk analysis technologies with management principles, allowed the development of a viable software management aid which fills an acknowledged gap in current technology.

Risk assessment applied to comsumer products with reference to CE marking machines for use at work

New Approach’ Directives now govern the health and safety of most products whether destined for workplace or domestic use. These Directives have been enacted into UK law by various specific legislation principally relating to work equipment, machinery and consumer products. This research investigates whether the risk assessment approach used to ensure the safety of machinery may be applied to consumer products. Crucially, consumer products are subject to the Consumer Protection Act (CPA) 1987, where there is no direct reference to “assessing risk”. This contrasts with the law governing the safety of products used in the workplace, where risk assessment underpins the approach. New Approach Directives are supported by European harmonised standards, and in the case of machinery, further supported by the risk assessment standard, EN 1050. The system regulating consumer product safety is discussed, its key elements identified and a graphical model produced. This model incorporates such matters as conformity assessment, the system of regulation, near miss and accident reporting. A key finding of the research is that New Approach Directives have a common feature of specifying essential performance requirements that provide a hazard prompt-list that can form the basis for a risk assessment (the hazard identification stage). Drawing upon 272 prosecution cases, and with thirty examples examined in detail, this research provides evidence that despite the high degree of regulation, unsafe consumer products still find their way onto the market. The research presents a number of risk assessment tools to help Trading Standards Officers (TSOs) prioritise their work at the initial inspection stage when dealing with subsequent enforcement action.