Examining how different temporal orientations shape and complicate organizational risk management: a case study

The purpose of this master’s thesis was to examine how temporality shapes risk management and its practices within an organization. In this thesis, temporality refers to how memories of the past and expectations for the future shape practices in the present moment. The aim was to identify how temporality is reflected in risk management, what challenges may arise from temporal factors and how an organization can address these challenges. With an abductive study approach and drawing from literature in accounting, the study was conducted as a qualitative case study within a Finnish organization whose operations are strictly guided by regulatory requirements. The empirical data consist of semi-structured interviews and both public and internal documents from the organization being studied. The data were analyzed using thematic analysis methods. The results of the study suggest that temporality can be embedded in the organization’s risk management practices in several ways. Temporality can create an overview of the state of risk management within an organization, facilitating an understanding of its historical developments, present status and future trajectory. Past events and the reporting of risk incidents can enable organizational learning and the use of accumulated information both within the organization and in statutory reporting. Future risks can be examined, for example, through external forums and various scenarios. Challenges related to temporal factors were found to concern, for instance, how the organization balances short- and long-term risks. Challenges may also be associated with the past, such as a culture perceived as blame-oriented, which can affect learning or the recording of risk incidents. Moreover, different temporal orientations were observed in the organization, including orientations toward the past or the future. This can create challenges for how signals about the future detected at the operational level are transmitted to higher organizational levels, or to the extent to which organizational actors remain anchored in past experiences. This thesis has two main contributions to the literature. First, it continues the discussion on the (dis)integration of risk management. The results show that temporal factors, such as differing temporal orientations or the crowding-out of longer-term challenges by acute issues can complicate the realization of risk management ideals and, in turn, push the organization toward disintegration. The second contribution concerns the literature on risk culture. The results emphasize that, through risk culture, risks can be organized in three temporal modes: prospectively, in real-time and retrospectively.