Preconditions for Conducting Constructive Dialogue

Dialogue is a fundamental process for building a common understanding. A productive dialogue is a primary requirement in an organization because it is the key to development as it inspires people to make an agreement and work together to achieve a common objective. Dialogue is usually made effective by getting rid of barriers like biases like the wrong attitude and preferences. There are some preconditions for conducting constructive dialogue in an organization, as highlighted below. In other words, a constructive dialogue creates a nurturing environment that has the potential to enhance a team’s performance and productivity.

The most important precondition for dialogue is open-mindedness. The participants should avoid any stereotype comments or any biases. Significantly, the participants should have a positive attitude towards each other until the end of the dialogue. Equality of participation is also another vital precondition for dialogue. Dialogue recognizes the nature of human beings and different opinions, assumptions, and views that are given regarding any issue. Group rules and guidelines are essential, and they should include treating every person’s perspective with respect.

Similarly, there should be no threats of retribution, judgment, and no person’s opinion should triumph over others. In this aspect, title, position, and ranks should not be permitted to influence how individual ideas and options are received (Potapchuk, 2004). Therefore, each person’s voice should be heard and given the same value. Identically, open agenda: the plan should not be hidden. The only purpose of summoning the group should be to manage in authentic communication.

A Constructive Dialogue in Risk Management.

A risk can be termed as a condition or event, which can have positive or negative impacts on the objective of a project. Therefore, risk management usually contains a detailed plan of the possible risks and their effects and strategies to enable the project not to obstructed in case the problem comes up. Critically, effective risk management is not possible without constructive dialogue. Typically, it is through dialogue that people converse and agree on how to avert a process.

Constructive dialogue is required for effective risk management. For some types of risks to be managed, a discussion is critical. Importantly this includes the controllable and avoidable risks, which are the internal risks that arise from the organization. These types of risks include illegal, unethical, or inappropriate actions. These types of tricks can be managed by prevention, through monitoring the operational processes and guiding people’s behaviors and decisions towards the desired standards, critically, this can only be enhanced through constructive dialogue.

Conversely, from the study, most organizations do not have dialogues concerning risks as they are overconfident regarding the accuracy of their forecast and risk assessments and also narrow in their evaluation of the range of outcomes that could occur in the organization.

Poor communication is also a significant determinant cause of ineffective risk management. Similarly, organizational biases are hinder organizations from engaging in dialogue about the risks and failures. When teams are facing uncertain conditions, they engage in groupthink. For example, this is common when an overconfident manager is leading a team, and this makes the rest of the team members to suppress their ideas and opinions. Arguably, for the organization to manage risks, the managers and the team members need to engage in constructive dialogues and generate new ideas, innovation risk, and profits (Mikes & Kaplan, 2012). proper discussions and conversations should not only be confrontational, but they should also be integrative. Managers should develop a companywide risk perspective by anchoring their discussions in strategic planning concerning the management of risks.

Forces undermining effective risk management

There are various forces, which tend to undermine the effectiveness of risk management in an organization. Primarily, lack of commitment and support from the top management is one of the factors. For the risk management process to be successful, the support of senior management is crucial as they will develop project procedures as well as initiating training programs that are important in educating the employees on risks. If the top management is not supportive, they may not be able to anticipate the probability of an adverse effect in the organization. Typically, when there are commitment and support from the top management, there will be an effective decision-making process that is crucial in the management of risks.

Another force that undermines effective risk management is the lack of proper communication. Since employees have different views and opinions, and their discussions are based on different conclusions. Hence, if there is no communication between the leaders and the team members, the objectives and goals of the project may not be achieved. identically, lack of communication adversely impacts effective risk management as there are no opportunities for clarifications and there is also no opportunity for the member to improve the organization and the effects of different risk mitigation strategies

Lack of training in any organization can also undermine effective risk management. When the staff is not equipped with the necessary skills, they may lack confidence, motivation, and job satisfaction. The employees should be trained on managing risks So that they can respond effectively to the various conditions in the operations in an organization that is associated with activities, including how to respond to early warning systems.

Trust is vital in organizations, as it is the key to cooperation. When there is a lack of trust in an organization, risk management may not be sufficient (Pooter, 2013). typically, risk management requires cooperation and teamwork for the project or success of the organization. When there is no trust among the members, they may not focus on their mission, develop doubts about other members’ roles and responsibilities. Risk management entails activities that encourage are a commitment. Hence one of the means of obtaining efficient risk management is trust.

Slow adoption of EMR in Organizations

The ERM can be defined as an integrated process that is implemented by the management to evaluate the uncertainties of an organization through monitoring the risk exposure of the enterprise and its effects on the value creation objective. The financial sector was slow in the adoption of ERM because they feared the hidden costs which are involved .skinc there was no dialogue among the parties involved, it became difficult to implement the adoption of the ERM. Moreover, the adoption is slow because of some challenges due to finding a consistent method of defining, assessing, and reporting risks.

Critically,  financial institutions like Goldman Sachs were slow in adopting URM. Though they understood that the adoption of ERM would create a competitive advantage over their traditional risk management process and unleash the potential of the institution to carry out a strategic plan, they delayed in the implementation for various reasons. Primarily, during the phase of expansion and economic boom, risks are usually not estimated, and the financial institutions tend to take more risk.

The main problem was the institutions did not want to go through the transition process to the ERM system. For the financial intentions to adopt the ERM system, they first had to understand and account for the full risk environment within which they operate. Explicitly, this includes an understanding of the external environment, economic conditions, customer behavior, competitor behavior, and even legal trends. Similarly, they have to understand their internal environments, like the organization culture and technology. Internal and external factors are the primary sources of financial risks. They also needed time to understand the strategies available to them to manage these financial and operational risks. Finally, this knowledge necessary to be applied fo them to manage these risks and to be able to do achieve this goal requires a disciplined management process that also entailed a constructive dialogue among the operation membres to make the integration of the ERM successful.

(Miccolis, 2000)

References

Anette Mikes & Robert S. Kaplan. (2012, June 1). Managing Risks: A New Framework. Retrieved from HBR Webinar: https://hbr.org/2012/06/managing-risks-a-new-framework

Miccolis, J. (2000, August 5). Enterprise Risk Management in the Financial Services Industry: Still a Long Way To Go. Retrieved from IRMI: https://www.irmi.com/articles/expert-commentary/enterprise-risk-management-in-the-financial-services-industry-still-a-long-way-to-go

Pooter, M. d. (2013, June 16). 10 Ways to improve risk management. Retrieved from primo: https://www.primo-europe.eu/10-ways-to-improve-risk-management/

Potapchuk, M. (2004). Using Dialogue as a Tool in the. Richmond, National Coalition for Dialogue and Deliberation.