Risk Tools for the Assessment of Strategic Risk: An Exploratory Study

Recent literature on risk management has suggested that the selection of risk assessment tools may be influenced by the type of risk being managed. In particular, the assessment of strategic risk seems to imply the use of both quantitative and qualitative techniques. This exploratory study investigates whether this characterisation holds in practice, based on a survey considering a random sample of 61 large manufacturing firms from Italy. Results point out that surveyed firms tend to use both quantitative (probabilistic and non-probabilistic) and qualitative techniques (risk maps) to evaluate strategic risk. The analysis also indicates that quantitative techniques are perceived as important as qualitative ones, and that they are moderately relevant overall. The results suggest that what risk management literature posits about the use of tools for strategic risk assessment broadly aligns with the responses of Chief Financial Officers.