From intent to impact: top management’s commitment influence on sustainable risk management under stakeholder pressure

Abstract

Purpose

The present study adopted a system thinking methodology to investigate the influence of top management commitment (TMC) on sustainable risk management (SRM) influenced by stakeholder pressures.

Design/methodology/approach

Three variables and 23 measurement items were derived from existing literature sources. Moreover, the methodology employed for data collection in this study involved a questionnaire. The constructs previously documented in the literature were utilized as the foundation for developing the questionnaire. Of 220 sent questionnaires, 106 valid responses were used for further analysis. To enhance objectivity, a causal loop diagram and a stock and flow diagram were created using a system thinking approach. These visual representations aim to illustrate the impact of top management factors on SRM under stakeholder pressure-related factors.

Findings

The results of the descriptive test indicate that the safety and quality issues emerged as the most significant, with the highest mean impact of 4.08 on sustainable risk impact assessments. Employee influence on customer relationships also showed a high mean impact of 4.08, while understanding customer requirements closely followed with a mean of 3.98. Additionally, causal loop analysis uncovered complex interconnections among these factors, emphasizing the intricate nature of SRM. Further, a five-year simulation analysis highlighted that SRM effectiveness is significantly enhanced when top management fosters a robust organizational culture. These findings emphasize the critical roles of safety, quality and customer-focused factors in sustainability, underscoring the importance of leadership in fostering effective, holistic sustainability and risk management strategies.

Originality/value

This research highlights top management’s pivotal role in effective SRM by integrating sustainability into core strategies. It identifies critical factors and emphasizes the solid organizational culture fostered by senior management, which is essential for long-term SRM effectiveness. The study’s focus on safety, quality and customer relations underscores the need for comprehensive sustainability strategies.

Citation

Irfan, M., Ghufran, M. and Musarat, M.A. (2024), "From intent to impact: top management’s commitment influence on sustainable risk management under stakeholder pressure", Engineering, Construction and Architectural Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/ECAM-05-2024-0608