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It is this conceptual paper’s intention to show the use of a management control approach to managing strategic risks. This theoretical work presents and conceptualizes strategic risk, categorizes strategic risks (examples taken from financial industry are used) and presents a management control framework to manage with these risks strategically. The paper illustrates the need to identify strategic risks proactively and to integrate risk management tools into overall company strategic management. It suggests that risk management is critical for an organization’s survival; it needs to have a company-wide strategic approach and backed by the top management of the organization. The paper also suggests that shareholders are ultimately responsible for the way the risks their companies face are managed. The recent financial crisis has generated a considerable amount of discussion around what regulators can do or could have done, while forgetting proper controls system by owners (shareholders) to influence and control the behavior of the managers of their own companies.

Keywords: Risk Management, Management Control, Strategic Management, Financial Crisis

How to cite this paper: Sales, X. (2010). Managing strategic risks from management control approach [Special issue]. Corporate Ownership & Control, 7(4-5), 9-13.