Risk Management and Budgeting

Prof Michela Arnaboldi
Politecnico di Milano

Date: 5 February 2008
Time: 1-2:30pm
Venue: CARR Seminar Room, H615

Risk management has been receiving increasing attention as instrument for predicting risks and helping organizations in achieving their goals. This interest has led a number of companies to enact new processes for undertaking this task. However the attention to risk, and the possible modes for reducing uncertainty, is not a novelty, and budgeting has been permeated by this aspiration for more than forty years. These two processes, risk management and budgeting, appear related: risk management aims at analyzing and prevent risks for helping organizations to achieve their goals; budgeting aspires to define the company viable goals considering the risks that can create variances. Starting from this consideration the seminar analyzes the integration (or non integration) between budgeting and risk management through empirical evidence. The cases analyzed present different achievements of integration, signalling the importance of the process of change in both risk management and budgeting. In picturing this change, Risk Management and Budgeting may be seen as rules and routines, which evolves overtime following different, sometime erratic, paths (Burns and Scapens, 2000). Their (possible) integration is presented unfolding their transformation per se and together, evidencing the interplay of external pressures and individual actions. Among these forces the role of translator (risk management and budgeting owners) emerge as relevant in making and giving sense to different approaches (Gioia and Chittipeddi, 1991).

About the speaker
Michela Arnaboldi is Associate professor at Politecnico di Milano, Department of Management, Economics and Industrial Engineering. Her main research interests are in accounting and control systems; since 2001 she has been collaborating with the School of Management at the University of Edinburgh on these topics. She is currently studying the relation between risk management and control systems, and its impact on processes and power within organisations. Among her publications: "Modern Costing Innovations and Legitimation: A Health Care Study" Abacus, (with I. Lapsley, 2004); "Internal Audit in Italian organizations: a multiple case study" Managerial Auditing Journal, (with M. Arena and G. Azzone, 2006).