Abstract:

This study has been motivated by the fact that Higher Education Institutions (HEIs) are facing numerous and emerging risks in the last several years. Some of the most evident risk examples in HEI include distance and hybrid learning, enhanced by the COVID-19 pandemic, the need for Emergency Remote Learning, possibilities of online study programs, digital transformation, curriculum design and development, introducing pedagogical innovation, keeping students engaged, providing teaching and learning opportunities in line with requirements of the 21st century skills and knowledge, etc. Additionally, every HEI is exposed to internal risks that are related to its internal organization, as well as human, financial and material resources. All of the named, but also many additional, risks pose a strong requirement to HEI's management around the globe to approach these risks from the strategic perspective and manage them actively. The scientific body of literature related to strategic decision-making in HEI is abundant, but there is scarce evidence of papers related to strategic risk management that tackle risks HEI's are exposed to in depth. In this paper we wish to overcome this shortcoming by introducing a strategic approach to risk analysis in HEI. The concept of strategic risk management emerged at the beginning of 20th century in insurance companies and banking as a response to ever growing risks companies were exposed to. From then on, strategic risk management has been a subject of scientific and practitioners' interest. At the moment it is the best-known practice that enables organizations to enhance their value and satisfy their stakeholders and is applicable to any type of organization, including HEI. The essence of strategic risk management is in a holistic analysis and management of all the risks an organization is exposed to, with specific analysis how each risk interwinds with organizational strategy and its strategic goals, but also how different types of risks are interconnected. The first step in strategic risk management is risk analysis. This means that risks need to be identified, assessed and prioritized in order for adequate mitigation actions to be formulated and implemented. In this paper we provide an approach to risk analysis in HEI that combines the best practices from the decision-making theory and strategic risk management. In order to comply with this aim, we present a case study how risk analysis has been conducted on an example of HEI by using a merged approach that combines integrated risk analysis methods and the analytic hierarchy process (AHP). The steps we use include: identification of risks HEI is exposed to based on its development strategy, experts’ brainstorming in order to identify additional emerging risks, conduction of SWOT and PESTLE methods, assessing each risk’s probability of impact and severity and using the AHP method, based on experts’ judgments, to prioritize the identified risks. There are two relevant contributions of this paper. Firstly, we present how strategic risk management may be used in HEI, as it is a field with very scarce evidence in scientific community. Secondly, we integrate the AHP and integrated risk analysis methods in HEI’s risk analysis on a provided example, thus leading to scientific contribution, but also offering a valuable practical insight for HEIs’ management.

Keywords:

Strategic risk management, HEI management, the AHP, integrated risk analysis.