Operational risk was identified as one of the primary risk types that a bank faces. Neglected for many years, there is a growing awareness in the banking industry that the management of operational risk is crucial for their future existence. The effective management of operational risk, however, requires a structured approach. This study, therefore, investigates the management of operational risk by way of a literature study and empirical research in order to develop a framework for a structured approach to operational risk management in banking. The framework comprises the primary risk factors of operational risk, namely: people, processes, systems and external events, as well as a definition of operational risk. The operational risk exposures that apply to the aforementioned primary risk factors are identified. It, furthermore, illustrates that operational risk management is an ongoing process that consists of risk identification, risk evaluation, risk control and risk financing and addresses the methods that could be applied in the management process. As operational risk management in the banking industry is still in a development stage it is believed that this study could assist banks with establishing formal operational risk management processes. The framework demarcates the area of operational risk properly and provides insight into all the activities that should be performed in the operational risk management process, but the following issues still require further research: • The practical implementation of methods for the quantification of operational risk and determining a capital charge for it; • The effect of the requirements of corporate governance on banks as it relates to the management of operational risk; and • The interaction between operational risk and the other primary risk types to ensure an effective, enterprise-wide risk management process. The framework that has been developed could also be applied to any other enterprise as operational risk management is not unique to banks and the basic principples are generic. / Business Management / D. Com. (Business Management)

Operational risk was identified as one of the primary risk types that a bank faces. Neglected for many years, there is a growing awareness in the banking industry that the management of operational risk is crucial for their future existence. The effective management of operational risk, however, requires a structured approach. This study, therefore, investigates the management of operational risk by way of a literature study and empirical research in order to develop a framework for a structured approach to operational risk management in banking. The framework comprises the primary risk factors of operational risk, namely: people, processes, systems and external events, as well as a definition of operational risk. The operational risk exposures that apply to the aforementioned primary risk factors are identified. It, furthermore, illustrates that operational risk management is an ongoing process that consists of risk identification, risk evaluation, risk control and risk financing and addresses the methods that could be applied in the management process. As operational risk management in the banking industry is still in a development stage it is believed that this study could assist banks with establishing formal operational risk management processes. The framework demarcates the area of operational risk properly and provides insight into all the activities that should be performed in the operational risk management process, but the following issues still require further research: • The practical implementation of methods for the quantification of operational risk and determining a capital charge for it; • The effect of the requirements of corporate governance on banks as it relates to the management of operational risk; and • The interaction between operational risk and the other primary risk types to ensure an effective, enterprise-wide risk management process. The framework that has been developed could also be applied to any other enterprise as operational risk management is not unique to banks and the basic principples are generic. / Business Management / D. Com. (Business Management)

Strategic alliances are a prevalent form of business organization. The critical characteristics of strategic alliances are detailed using Coase (1937) and the resulting definition tested through primary research and the alternative form, the infrastructure alliance posited. The thesis examines whether strategic alliances add value in the European banking sector through four types of analysis at two levels of engagement - a 23 historical review (at industry level); a review of over 400 papers in the academic literature; a questionnaire survey (at firm level) and in-depth interviews (at firm level). Bankers high pre-existing propensity to enter into strategic alliances is determined and three lifecycles, and the underpinning, conditions identified - Clubs and Consortium Banks, Bankassurance and the Virtual bank - the latter involving a fundamental change in Coase (1937) enabled by the underpinning technology. Bankers were found to be followers of potential business steams and the strategic alliance was one form of market entry. The questionnaire research, however, identified European bankers prefer to enter into alliances (as opposed to own branch or M&A) only in countries which had the appropriate supporting conditions such as definable, enforceable and terminable contracts, the provision of accounting information, stable governments and economic freedom. Direct discussions with senior bankers resulted in a number of valuable insights into the conceiving, forming, organizing evolving and dissolving of alliances. Further research into the infrastructure alliance, including 'oscillation' between infrastructure and strategic forms is proposed. The Co-Evolution Model of Strategic Alliances is proposed and taxonomy consisting of parallel co-evolution, convergent coevolution, divergent co-evolution and the subsidiary taxonomy of differential parallel coevolution, differential convergent co-evolution and differential divergent co-evolution detailed and further research suggested. Strategic alliances are found to add value in European banking but this value is contingent on the strength of the business stream, the global, national and industry conditions and the nature of managerial decisions and drive.

Financail Accounting / D.Com. (Applied Accountancy)

Financail Accounting / D.Com. (Applied Accountancy)