Strategic Risk: A State-Defined ApproachStrategic Risk examines a fundamental issue in the field of strategic management and organizations: how to study changes in the competitive outcomes of firms. Collins and Ruefli develop the concept of ordinal risk and extend this concept and its associated measures to the more general framework of state-defined systems. The book makes the state-defined risk methodology more accessible to strategic management researchers, and to social scientists in general. The need for quantitative frameworks with which to analyze the dynamics of strategic management has been apparent for some time. The state-defined risk methodology has the advantage of being based on a common usage definition of risk, and is also based on a mathematically well-behaved function. It permits investigation of the chance of gain while yielding a measure of environmental uncertainty. Finally, the development is general and permits applications employing a variety of performance dimensions over a range of entities in a diversity of contexts. The authors demonstrate the practicability and reliability of this approach by applying the model to mutual funds, large mining and manufacturing firms, and public firms on an industry by industry basis. |
Contents
LIST OF FIGURES | 4 |
A RESEARCH PERSPECTIVE ON STRATEGIC RISK | 6 |
LIST OF TABLES | 8 |
ORDINAL ANALYSIS | 12 |
APPENDIX A | 18 |
REVIEW AND ANALYSIS OF PRIOR RISKRELATED STRATEGY | 34 |
TRADITIONAL ANALYSIS OF THE EXAMPLE DATA | 40 |
1 ROA MEANS AND VARIANCES FROM TABLE 1 3 | 41 |
9 ADJUSTED STATEDEFINED RISK | 95 |
WEIGHT SYSTEMS | 97 |
1 ALL AREAS OF THE TRANSITION MATRIX | 102 |
1 ADJUSTMENT PERCENTAGE FOR RELATIVE PROSPECT | 103 |
6 COMPUTED STATEDEFINED STATISTICS | 109 |
CONCLUSION | 110 |
2 ADJUSTED STATEDEFINED STATISTICS | 117 |
1 ROLLING WINDOW ANALYSIS | 123 |
1 AVERAGE INDUSTRY PERFORMANCE | 42 |
A CONCEPT OF STATEDEFINED RISK | 46 |
1 ORDINAL INDUSTRY ROA DATA | 51 |
GENERAL DEFINITION OF STRATEGIC RISK | 54 |
A MEASURE OF STATEDEFINED RISK | 61 |
1 TRANSITION EVENTS INDIVIDUAL ENTITY PA | 64 |
DEVELOPMENT OF A GENERAL ENTROPIC MEASURE OF SYSTEM | 67 |
6 CONDITIONAL TRANSITION PROBABILITIES | 71 |
1 WEIGHTS REPRESENTING THE IMPORTANCE OF DIFFERENT Classes | 81 |
A GENERALIZED MEASURE OF STATEDEFINED RISK | 84 |
1 RISK AREA OF THE TRANSITION MATRIX | 85 |
7 WEIGHTED ENTROPIES | 89 |
2 RISK BIAS WHEN System is ObsERVED OVER 5 10 15 20 AND 25 | 94 |
1 KENDALL TAU CORRELATIONS ENDING PERIOD RANK BY STRATEGIC | 129 |
STATEDEFINED RISK AND STATEDEFINED PROSPECT OF | 130 |
10 STATEDEFINED UNCERTAINTY OF FORTUNE 500 FIRMS | 134 |
RECENT FINDINGS AND A CONJECTURE | 142 |
1 MARKET EFFECT ON RISKRETURN RELATIONSHIPS | 144 |
1 RISKRETURN ASSOCIATIONS 650 MUTUAL FUNDS | 154 |
4 ORDINAL RISKRETURN PLOT FOR THE TOP 650 MUTUAL FUNDS PERIOD | 155 |
IMPLICATIONS | 161 |
1 TWO DISTRIBUTIONS WITH DIFFERENT MEANS AND VARIANCES | 170 |
2 WEIGHTED ENTROPY SURFACES ALL FORTUNE 500 FIRMS | 174 |
LIMITATIONS AND IMPLICATIONS | 180 |
210 | |
Other editions - View all
Strategic Risk: A State-Defined Approach James M. Collins,Timothy W. Ruefli No preview available - 1995 |
Strategic Risk: A State-Defined Approach James M. Collins,Timothy W. Ruefli No preview available - 2011 |
Strategic Risk: A State-Defined Approach James M. Collins,Timothy W. Ruefli No preview available - 2011 |
Common terms and phrases
airlines analysis assumption average B-CAPM behavior beta bias CAPM cardinal chance of loss changes Chapter Compustat computed concept of risk concepts and measures conditional entropy context decision makers defined developed distribution diversification strategy economic ending category entities evaluative ex post risk ex post risk-return examined example Fama Fiegenbaum Figure firm's Fortune 500 incidence matrix individual firms industry joint entropy measure of risk measure of state-defined mutual funds number of transitions ordinal analysis ordinal categorical ordinal data ordinal risk outcomes performance post risk-return relationships probability prospect theory rank realm of gains reference set relative risk and prospect risk and return risk levels risk measures risk SMJ Ruefli set of firms significant state-defined approach state-defined prospect state-defined risk state-defined uncertainty statistics Strategic Management Journal strategic risk strategy research symmetry systematic risk Table tegic theory tion transition events transition matrix utilized САРМ