The hype of risk-based management control: a phronetic approach

Abdelmoneim Mohamed Metwally, Hesham Ali, Ahmed Abdelnaby Diab, Khaled Hussainey

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    This paper provides a phronetic review of Risk Management (RM), and its relationship to Management Accounting and Control (MAC). Building on Flyvbjerg’s (2012) phronetic approach, we study Risk-Based Management Control (RBMC) to answer the phronetic four main questions (1) Where are we going? (2) Who gains and who loses? (3) Is this desirable? (4) What should we do? This review starts its lines of enquiry from the growing fears in the late modernity and risk society (Beck, 1992; Giddens, 1990), that led to heterogenic reactions and unintended consequences which need exploring and revealing. Hence, we will explore whether this is a right reaction or whether it would give rise to an “illusion of control” fortified with some unintended consequences. The paper concludes that the emergency of RBMC led to heterogenic practices and various unintended consequences. These unintended consequences need further research to unpack innovative solutions that can create real effective RBMC. Moreover, the RBMC best practices are still blurred and undefined, this plea for, more case studies to unpack the actual practices and its problems. The novelty of this research is deploying the phronetic approach to understand and criticise RBMC current studies by explaining the reasons and directions for future research. This work would also be of interest to practitioners interested in risk conception, risk management, and management control.
    Original languageEnglish
    Pages (from-to)18-33
    JournalRisk Governance and Control: Financial Markets & Institutions
    Issue number2
    Publication statusPublished - 22 Mar 2019


    • Risk
    • Risk management
    • Risk based controls
    • Enterprise Risk Management (ERM)
    • Management Accounting
    • Management Control


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