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MEASURING ORGANIZATIONAL DOWNSIDE RISK
Author(s) -
MILLER KENT D.,
REUER JEFFREY J.
Publication year - 1996
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/(sici)1097-0266(199611)17:9<671::aid-smj838>3.0.co;2-1
Subject(s) - downside risk , perspective (graphical) , risk management , economics , business , actuarial science , risk analysis (engineering) , computer science , financial economics , management , artificial intelligence , portfolio
Despite widespread incorporation of risk measures in strategy research, there is little consensus regarding the meaning and measurement of risk. In contrast to the variability measures widely used in strategy studies, this paper draws from behavioral decision theory, finance, and management theory to present an alternative perspective on organizational risk—downside risk. The paper explains three categories of organizational downside risk measures based on the concept of lower partial moments. The latter sections of the paper present considerations involved in specifying operational measures of downside risk and an empirical comparison of alternative downside risk measures.