Optimizing Risk Management: The Role of Communication, Trust, and Control in Effective Organizational Risk Mitigation

This study investigates the quantitative impact of communication, trust, and control on key phases of the risk management process, specifically targeting risk identification, evaluation, and treatment. With increasing organizational reliance on effective risk management to navigate complex environments, understanding the role of these factors is critical. Utilizing structural equation modeling (SEM), this research analyzes survey responses from 139 risk management professionals across diverse industries, validating a conceptual model that directly links communication, trust, and control with each stage of the risk management process. The findings reveal that communication significantly enhances risk identification and treatment, facilitating collaboration and comprehensive risk discovery. Control mechanisms proved effective primarily in the treatment phase, where consistent application and oversight of mitigation strategies are essential. Trust, while impactful during the treatment phase, showed limited influence in earlier stages of risk management. Limitations include the use of self-reported data and the study’s cross-sectional design, which restricts causal inference. Key words: Risk management, communication, trust, control mechanisms, structural equation modeling.