Enabling Effective Operational Risk Management in a Financial Institution: An Action Research Study

Abstract

Action research (AR) is significant for its promise to bridge the chasm between rigor and relevance by seeking to solve real-world problems while building scientific knowledge. In this spirit, in our research project, we argue for a return to the essence of AR—that is, focusing on problem, action, and reflection. Adopting the style of AR known as dialogical AR, we address the issue of operational risk management as encountered by a financial institution in Taiwan. In this AR project, the researchers work collaboratively with workers in a bank to manage the knowledge creation process as part of an operational risk management program. Through three AR cycles, our findings demonstrate that ongoing knowledge creation facilitates the transformation of existing organizational culture and helps practitioners to identify different types of operational risks. We also highlight the conditions under which insights from reflective dialogues between practitioners and researchers can encourage managers to open themselves to new and different ways of thinking and acting. Finally, we offer principles for undertaking effective dialogical AR.

Key words and phrases:

• action research
• dialogical action research
• information security management
• operational risk management
• principles of dialogical action research

Acknowledgments

The authors thank the Special Issue coeditors, the associate editor, and the three anonymous reviewers for their constructive comments and recommendations that contributed to significant improvements in the study.

Supplemental File

Supplemental data for this article can be accessed on the publisher’s website at 10.1080/07421222.2017.1373006

Additional information

Notes on contributors

Shirley Ou Yang

Shirley Ou Yang ([email protected]) is an assistant professor in the International College at Ming Chuan University, Taiwan. She holds a Ph.D. in information systems from National Taiwan University. Her research interests focus on the social aspects of information systems (IS) including risk governance, philosophical issues, and green IS. Her work has been published in the DATABASE for Advances in Information, Pacific Asia Journal of the Association for Information Systems, Journal for Philosophical Study of Public Affairs, and other venues.

Carol Hsu

Carol Hsu ([email protected]; corresponding author) is a professor in the Management Science and Engineering Department at Tongji University, China. She holds a Ph.D. in information systems from the London School of Economics and Political Science. Her research interests focus on the organizational and behavioral issues related to IS security implementation. Her work has been published in MIS Quarterly, Information Systems Research, European Journal of Information Systems, and other journals. She serves on the editorial boards of the Journal of the AIS, Journal of Strategic Information Systems, and Information Systems Journal.

Suprateek Sarker

Suprateek Sarker ([email protected]) is Rolls-Royce Commonwealth Professor at the McIntire School of Commerce, University of Virginia, and Distinguished Visiting Professor at Aalto University. Much of his research is qualitative in nature, and his work has been published in the leading information systems journals. He serves as editor in chief of the Journal of the AIS, as a member of the Board of Editors of Journal of Management Information Systems, as a senior editor of Decision Sciences, and as an editor of other journals. He has received multiple external grants, including from the National Science Foundation and Institute for the Studies of Business Markets (ISBM). He received an honorary doctorate (information technology) from the University of Jyväskylä, Finland.

Allen S. Lee

Allen S. Lee ([email protected]) recently retired as a professor of information systems at Virginia Commonwealth University (VCU). Previously, he served as a professor at McGill University, the University of Cincinnati, and Northeastern University. His doctoral degree is from the Massachusetts Institute of Technology. He has served as associate dean at VCU and McGill University, as editor in chief of MIS Quarterly, and as a founding senior editor of MIS Quarterly Executive.