Evaluating Corporate Strategic Plans Risk-Based Approach

Journal of Financial Management and Analysis, Vol. 29(1):2016

Posted: 26 Oct 2016

See all articles by Gianluca Vagnani

Gianluca Vagnani

La Sapienza University of Rome - Dipartimento di Scienze della Gestione d’Impresa

Corrado Gatti

University of Rome Tor Vergata - Dipartimento di Studi sull’Impresa

Date Written: October 24, 2016

Abstract

Stemming from a systemic approach to corporate strategic planning and management which considers the firm as a viable system, the aim of our paper is to describe a conceptual and analytical model to assess corporate strategic plans exposure to risk. Analyzing the firm plan through the systemic framework, our approach, named Risk Compliant Valuation, focuses on qualifying the plan, and assessing the coherence of the plan, placing it in a matrix of development alternatives. Finally, it focuses on making assumptions about probability distributions for the relevant parameters in each period over the life of the plan and then uses these distributions to calculate the maximum possible present loss concerning the plan.

Keywords: Corporate Strategic Planning; Risk Compliant Evaluation Model

JEL Classification: C12; C82; D81; G31; O52

Suggested Citation

Vagnani, Gianluca and Gatti, Corrado, Evaluating Corporate Strategic Plans Risk-Based Approach (October 24, 2016). Journal of Financial Management and Analysis, Vol. 29(1):2016, Available at SSRN: https://ssrn.com/abstract=2858474

Gianluca Vagnani

La Sapienza University of Rome - Dipartimento di Scienze della Gestione d’Impresa ( email )

Piazzale Aldo Moro, 5
Roma, 00185
Italy

Corrado Gatti (Contact Author)

University of Rome Tor Vergata - Dipartimento di Studi sull’Impresa ( email )

Via Orazio Raimondo, 18
Roma, 00173
Italy

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