Cyber Risk and Risk Management in the Environment of the Global Economy

Subject: Tech & Engineering
Pages: 8
Words: 2166
Reading time:
8 min
Study level: PhD

Abstract

The issue regarding cybersecurity has been brewing for quite a while, as the number of cyber attacks was growing increasingly with the discovery of new opportunities online. Moreover, the loopholes in the cybersecurity-related strategies lead to endangering both corporations and individuals by exposing them to the danger of their personal and professional data theft. It is typically assumed that companies can be protected by merely introducing the latest IT innovations into the framework of their operations, whereas the significance of IT awareness among the employees is usually downplayed.

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It is believed that the lack of focus on the promotion of IT intelligence and the enhancement of information management knowledge among the members of an organization is likely to trigger a sharp rise in the company’s and staff’s data safety. However, the challenges related to the change in the employees’ behavioral patterns and values, which the specified innovation is bound to require, may hamper the process of increasing IT awareness. Therefore, it is strongly recommended that the links between the variables mentioned above should be established and that the proper approach should be chosen to manage the specified concern.

Introduction

Background

The significance of cyber safety in the realm of the contemporary economic and business environments can hardly be overrated. Because of the need to transfer to the use of the latest IT tools to store the company data, a range of organizations have encountered numerous issues regarding the provision of data safety. The Global Allianz survey points graphically to the fact that the issue of cyber threats is getting out of hand due to the lack of awareness on the means of ensuring safety among members of most companies operating in the global economy.

Problem Statement

Because of the lack of awareness concerning the issue of cyber security among the members of a range of entrepreneurship and the lack of enthusiasm among the leaders thereof to promote the acquisition of the corresponding knowledge to the staff, numerous modern companies are under a consistent threat of cyber attacks. The fact that the specified problem concerns not only the external factors such as exposure to a large number of cybercriminals but also the internal ones including the lack of understanding or even corporate fraud, organizations are strongly recommended to consider the promotion of the values that will help the employees acquire new knowledge and educate themselves regarding the existing IT threats as well as the methods of avoiding them.

The lack of a proper information management strategy that would help design the environment, in which the members of organizations could identify threats and avoid them successfully, therefore, can be viewed as a major problem. The specified issue, in its turn, roots back to the misconception that the problem of cybersafety is solely the concern of the IT experts. In other words, the identified issue needs to be considered from the perspective of management so that the staff members could accept the new principles of information management and could handle the related tasks responsibly. Studies show that the strategy of cyberattacks prevention permits a significant increase in the overall security rate and helps protect the company along with its crucial data from the inside. In other words, it is imperative that the newly adopted approaches should be founded on the results of strategic, operational, and economic analysis.

Justification: Literature Review

Current Status of the Problem

The survey produced by the Global Allianz is very graphic proof that the issue concerning the lack of data security for the majority of organizations operating in the environment of the global economy remains on the agenda. Not only did it retain its original significance but also gained a new gravity due to the recent innovations and the options that they offer cybercriminals:

The media regularly present us with examples of organizations that have suffered financial loss and reputational damage as a result of problems arising from their information technology systems, whether this is as a result of human error, deliberate wrongdoing, or some other form of technology systems failure. (‘Cyber risk: executive summary’ 2014, p. 20)

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Factors Contributing to Cyber Risks

Internal Threats: Lack of Awareness and Corporate Fraud

While most companies prefer to reinforce their data security by building stronger IT strategies and designing the IT maneuvers that are supposed to prevent the attacks of cybercriminals, studies show that the importance of promoting the corresponding knowledge and skills to the staff members is often overlooked. The specified phenomenon can be viewed as the key contributor to the escalation of the problem and its further aggravation. In addition, researchers warn that, without proper supervision of the processes involving information management, instances of corporate fraud may occur, therefore, jeopardizing the very existence of an organization (Williams, Hardy, & Holgate 2014).

External Threats: Cybercriminals

Apart from the numerous challenges that a company has to deal with when addressing the internal concerns, testing its IS strategy in the environment of the global economy and, therefore, having to encounter countless external threats needs to be brought up. Whereas the internal issues can be related as cultural, the global market environment inhibits a company’s security development by creating economic, political, and legal issues (Saini, Rao, & Panda 2014).

Means of Managing Cyber Risks

The administration of the above-mentioned changes to the design of corporations and firms working in the environment of the global economy can be viewed as an attempt to affect the issue on a sociocultural and organizational level. However, there are other routes that can be taken with the specified concept; particularly, the exploration of the existing financial opportunities as far as the staff’s IT training is concerned deserves to be mentioned: “government agencies are well aware of the need for cybersecurity training” (Larson 2015, p. 11).

Likewise, the strategic perception of the current data management process needs to be challenged so that the means of creating positive behavioral patterns among the staff members could be identified and incorporated into the organizations’ framework. It is essential that every single member of the team should realize how data is processed, what the information analysis is used for, and, most importantly, why it is crucial to comply with every single security requirement listed in the guidelines. As long as the employees are capable of comprehending the subject matter they will maintain the required data safety rates, therefore, designing the environment, in which safe and efficient operations are a possibility.

Addressing External Threats

When it comes to defining the tools that may help address the threats related to the external environment and the increasingly sophisticated tools used by cybercriminals, one must mention the significance of the phenomenon known as global cyber governance. Typically defined as the government framework for addressing the emergent cyber threats (Solana & Lehmann 2014), the subject matter can be viewed as a promising strategy that allows for tracking criminals down faster and much more efficiently:

As cyber security has gained prominence on the agenda, some governments are becoming more involved in shaping policy. With cyber security issues traditionally the domain of technicians, businesses, and the military, this government involvement is having a significant impact on various international initiatives. (Solana & Lehmann 2014, p. 20)

It should be noted, though, that the specified system has pros and cons. While clearly setting the stage for embracing the problem on a global scale and centralizing the process of corporate security enhancement, the specified tool may trigger a drop in the production and services quality. With the people who only have a general concept of the entrepreneurship’s operation at the helm, a company is likely to fail miserably in the global economic environment. Therefore, it is essential that the principle of sustainability should be incorporated into the leadership approach adopted by corporate leaders.

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Managing Internal Threats

While the problems that lay outside of the spectrum of a company’s competencies are obviously aaa, these are the internal concerns that need to be addressed first. Once the promotion of the corresponding values and principles is carried out successfully, the representatives of an organization are likely to avoid the typical mistakes that leave the firm’s database vulnerable to outside factors. Thus, it is imperative to design the approach that will allow for flexible navigation between the existing options as far as the internal and external threats are concerned. Correspondingly, the risk intelligent governance strategy allowing for timely identification of emergent threats (‘Risk Intelligent governance in the age of cyber threats what you don’t know could hurt you 2011) should be viewed as an opportunity.

Therefore, though the evaluation of the environment, in which a company operates, clearly is crucial to the information security rates that it will finally attain, addressing the internal issues is also a must. First and most obvious, the creation of a set of rigid ethical values along with basic rules and regulations regarding the data flow is imperative as the staff is likely to be unwilling to alter their behavioral patterns on their own.

The specified phenomenon can be related to the socio-cultural aspects of the change that organization managers will have to take into account when redefining the current information management practices and conveying the significance of responsible data management to the employees.

The issue concerning the current lack of responsible attitude among the staff members, in its turn, can be resolved with the introduction of the management tool such as Corporate Social Responsibility into the framework of the organizations’ operations. According to the existing definition of the phenomenon, CSR allows for a rapid redesign of the staff’s values and, therefore, builds the premises for a consistent increase in their loyalty. The incorporation of the phenomenon in question into the companies’ design is expected to help the employees accept the changes that the traditional process of information management will undergo and, thus, contribute to the reinforcement of the security of their and their company’s private data.

Hypotheses Development: What Can Be Done

H1: Consistent Training

In order to adapt to the new requirements concerning the process of information retrieval, processing, and transfer, the staff will have to undergo a series of training aimed at improving their understanding of what cybersecurity is.

H2: Corporate Values Reconsideration

The change in the staff’s behavior and the acceptance of the behavioral patterns mentioned above can only occur successfully once an organization shapes its values so that it could reflect the significance of data security and the nondisclosure policy.

H3: Strategic, Operational, and Economic Perspectives

Making the promotion of new IM principles successful will require viewing the issue from not only technological but also strategic, operational, and economic perspectives.

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H4: Information Management Strategies

The choice of the information management strategies primarily depends on the external (economic) rather than the internal (social) factors (Galliers & Leidner 2003, p. 103).

H5: Promotion of Corporate Social Responsibility (CSR)

The incorporation of the basic CSR principles into the company’s ethical standards set and its operational design will help reinforce the significance of the key information management-related rules.

Variables

The hypotheses listed above include the variables such as the rates of cyber security (dependent one), the adoption of the training program, the reinforcement of the corporate values, the change in the corporate ethics, and the introduction of CSR into the company’s design (independent ones).

Questions

  • Will IT training courses for the staff help improve their cyber security competencies?
  • Will corporate values reconsideration help motivate the staff to acquire IT knowledge?
  • Will the specified objectives require substantial funding?
  • May the choice of the IM strategy depend on the unique characteristics of an organization, or will the adoption of a uniform strategy be required?
  • Can the introduction of the CSR principles galvanize the staff’s enthusiasm in accepting new guidelines and training new skills?

Conclusion

Although the emphasis on the technological aspect of cybersecurity provision in modern organizations is rather legitimate and essential, it is also crucial that the focus should be kept on the staff’s ability to comprehend the gravity of the current safety rules and principles. The outcomes of the study point quite clearly to the fact that, to enhance the efficacy of the strategies used for cybersecurity, the leaders of entrepreneurship will have to reconsider the very foundation of their organizations, therefore, altering the current values and creating premises for a change in the employees’ organizational behavior.

The study outcomes, therefore, show quite graphically that there is a tangible link between the management strategy chosen, particularly, the tools used to get the company’s values and ethics across, and the efficiency of the process of cybersecurity provision. The research shows that the members of an organization must be aware of the approaches used to not only manage a cyber-attack but also the preventive measures that can be used to facilitate the safety of the corporate information, including both the company-related issue and the personal data of the staff. As soon as the company members give a full account of their actions and know the exact steps of the required routines, cybersecurity rates can be deemed as high.

Reference List

Cyber risk: executive summary 2011, Web.

Galliers, R D, & Leidner, D E 2003, Strategic information management: challenges and strategies in managing information systems, Butterworth/Heinemann, Oxford, UK.

Williams, S P, Hardy, C A, & Holgate, J A 2014, ‘Information security governance practices in critical infrastructure organizations: A socio-technical and institutional logic perspective’, Electron Markets, vol. 23, pp. 341–354.

Larson, S 2015, ‘The cyber security fair: an effective method for training users to improve their cyber security behaviors?’, Information Security Education Journal, vol. 2 no. 1, pp. 11–19.

Risk Intelligent governance in the age of cyber threats what you don’t know could hurt you 2011, Web.

Saini, H, Rao, Y S,& Panda, T C 2014, ‘Cyber-Crimes and their Impacts: A Review’, International Journal of Engineering Research and Applications (IJERA), vol. 2, no. 2, pp. 202–209.

Solana, J, & Lehmann, A P 2014, Risk nexus: global cyber governance: preparing for new business risks, ESADE, Zurich.