The Impact of Workload on Operational Risk: Evidence from a Commercial Bank

Published Online:https://doi.org/10.1287/mnsc.2021.4019

References

  • Altman EI, Saunders A (1997) Credit risk measurement: Developments over the last 20 years. J. Bank. Finance 21(11):1721–1742.CrossrefGoogle Scholar
  • Anderson TW, Hsiao C (1981) Estimation of dynamic models with error components. J. Amer. Statist. Assoc. 76(375):598–606.CrossrefGoogle Scholar
  • Aral S, Brynjolfsson E, Van Alstyne M (2012) Information, technology, and information worker productivity. Inform. Systems Res. 23(3-part-2):849–867.Google Scholar
  • Ashby S (2010) The 2007-2009 financial crisis: Learning the risk management lessons. Financial Services Research Forum, Nottingham. https://www.nottingham.ac.uk/business/businesscentres/gcbfi/documents/researchreports/paper65.pdf.Google Scholar
  • Bank for International Settlements (2011) Operational risk-Supervisory guidelines for the advanced measurement approaches. Report, Bank for International Settlements. Basel, Switzerland.Google Scholar
  • Basel Committee on Banking Supervision (2001) QIS 2: Operational risk data report. Bank for International Settlements, Basel, Switzerland.Google Scholar
  • Basel Committee on Banking Supervision (2006) The first pillar-minimum capital requirements. Report, Bank for International Settlements, Basel, Switzerland.Google Scholar
  • Basel Committee on Banking Supervision (2011) Principles for the sound management of operational risk. Report, Bank for International Settlements, Basel, Switzerland.Google Scholar
  • Baum C, Christopher F (2006) An Introduction to Modern Econometrics Using Stata (Stata Press, College Station, TX).Google Scholar
  • Bendoly E (2011) Linking task conditions to physiology and judgment errors in RM systems. Production Oper. Management 20(6):860–876.CrossrefGoogle Scholar
  • Bendoly E, Prietula M (2008) In the ‘zone’: The role of evolving skill and transitional workload on motivation and realized performance in operational tasks. Internat. J. Oper. Production Management 28(12):1130–1152.CrossrefGoogle Scholar
  • Bendoly E, Donohue K, Schultz KL (2006) Behavior in operations management: Assessing recent findings and revisiting old assumptions. J. Oper. Management 24(6):737–752.CrossrefGoogle Scholar
  • Berry JJ, Tucker A (2016) Past the point of speeding up: The negative effects of workload saturation on efficiency and patient severity. Management Sci. 63(4):1042–1062.LinkGoogle Scholar
  • Bocker K, Kluppelberg C (2005) Operational VaR: A closed-form approximation. Risk-London-Risk Magazine Limited 18(12):90.Google Scholar
  • Buell RW, Campbell D, Frei FX (2016) How do customers respond to increased service quality competition? Manufacturing Service Oper. Management 18(4):585–607.LinkGoogle Scholar
  • Cachon G, Gallino S, Olivares M (2019) Does adding inventory increase sales? Evidence of a scarcity effect in us automobile dealerships. Management Sci. 65(4):1469–1485.LinkGoogle Scholar
  • Cakir A, Hart DJ, Stewart TFM (1980) Visual Display Terminals: A Manual Covering Ergonomics, Workplace Design, Health and Safety, Task Organization (Wiley, New York).Google Scholar
  • Campbell D, Frei F (2004) The persistence of customer profitability: Empirical evidence and implications from a financial services firm. J. Service Res. 7(2):107–123.CrossrefGoogle Scholar
  • Campbell D, Frei F (2010) Cost structure, customer profitability, and retention implications of self-service distribution channels: Evidence from customer behavior in an online banking channel. Management Sci. 56(1):4–24.LinkGoogle Scholar
  • Charron S, Koechlin E (2010) Divided representation of concurrent goals in the human frontal lobes. Science 328(5976):360–363.CrossrefGoogle Scholar
  • Chen C, Sandino T (2012) Can wages buy honesty? The relationship between relative wages and employee theft. J. Accounting Res. 50(4):967–1000.CrossrefGoogle Scholar
  • Chernobai AS, Rachev ST, Fabozzi FJ (2007) Operational Risk: A Guide to Basel II Capital Requirements, Models, and Analysis (John Wiley & Sons, New York).Google Scholar
  • Chuang HH, Oliva R, Perdikaki O (2016) Traffic-based labor planning in retail stores. Production Oper. Management 25(1):96–113.CrossrefGoogle Scholar
  • Clark JR, Huckman RS, Staats BR (2013) Learning from customers: Individual and organizational effects in outsourced radiological services. Organ. Sci. 24(5):1539–1557.LinkGoogle Scholar
  • Cruz MG (2002) Modeling, Measuring and Hedging Operational Risk (John Wiley & Sons, New York).Google Scholar
  • Dalton AN, Spiller SA (2012) Too much of a good thing: The benefits of implementation intentions depend on the number of goals. J. Consumer Res. 39(3):600–614.CrossrefGoogle Scholar
  • Deci EL, Connell JP, Ryan RM (1989) Self-determination in a work organization. J. Appl. Psych. 74(4):580.CrossrefGoogle Scholar
  • Deloitte (2013) Directors, CFOs share views on risk, but diverge on time spent. Accessed March 1, 2021, http://deloitte.wsj.com/riskandcompliance/2013/04/16/.Google Scholar
  • Dimmock SG, Farizo J, Gerken WC (2020) Misconduct and fraud by investment managers. Alexander C, Cumming D, eds. Corruption and Fraud in Financial Markets: Malpractice, Misconduct and Manipulation (John Wiley & Sons, Chichester, UK), 327–358.Google Scholar
  • Donahue EM, Robins RW, Roberts BW, John OP (1993) The divided self: Concurrent and longitudinal effects of psychological adjustment and social roles on self-concept differentiation. J. Personality Soc. Psych. 64(5):834–846.CrossrefGoogle Scholar
  • Dowd K (2007) Measuring Market Risk (John Wiley & Sons, New York).Google Scholar
  • Fisher M, Gallino S, Netessine S (2020) Setting retail staffing levels: A methodology validated with implementation. Manufacturing Service Oper. Management, ePub ahead of print, October 7, https://doi.org/10.1287/msom.2020.0917.Google Scholar
  • Frachot A, Georges P, Roncalli T (2007) Loss distribution approach for operational risk. Preprint, submitted November 26, https://dx.doi.org/10.2139/ssrn.1032523.Google Scholar
  • French KR, Schwert WG, Stambaugh RF (1987) Expected stock returns and volatility. J. Financial Econom. 19(1):3–29.CrossrefGoogle Scholar
  • Friedman JH (1991) Multivariate adaptive regression splines. Ann. Statist. 19(1):1–67.CrossrefGoogle Scholar
  • Greenland S, Mansournia MA, Altman DG (2016) Sparse data bias: A problem hiding in plain sight. BMJ 352:i1981.CrossrefGoogle Scholar
  • Guegan D, Hassani BK (2013a) Operational risk: A Basel II++ step before Basel III. J. Risk Management Financial Inst. 6(1):37–53.Google Scholar
  • Guegan D, Hassani BK (2013b) Using a time series approach to correct serial correlation in operational risk capital calculation. J. Oper. Risk 8(3):31–56.CrossrefGoogle Scholar
  • Guo Z, Small D (2016) Control function instrumental variable estimation of nonlinear causal effect models. J. Machine Learn. Res. 17(1):3448–3482.Google Scholar
  • Hausman JA (1996) Valuation of new goods under perfect and imperfect competition. The Economics of New Goods (University of Chicago Press, Chicago), 207–248.Google Scholar
  • Healy P, Serafeim G (2019) How to scandal-proof your company a rigorous compliance system is not enough. Harvard Bus. Rev. 97(4):42–50.Google Scholar
  • Hitt LM, Frei FX (2002) Do better customers utilize electronic distribution channels? The case of PC banking. Management Sci. 48(6):732–748.LinkGoogle Scholar
  • Holmstrom B, Milgrom P (1991) Multitask principal-agent analyses: Incentive contracts, asset ownership, and job design. J. Law Econom. Organ. 7:24–52.CrossrefGoogle Scholar
  • Hora M, Klassen RD (2013) Learning from others’ misfortune: Factors influencing knowledge acquisition to reduce operational risk. J. Oper. Management 31(1):52–61.CrossrefGoogle Scholar
  • Jarrow RA (2008) Operational risk. J. Banking Finance 32(5):870–879.CrossrefGoogle Scholar
  • Jarrow RA, Turnbull SM (1995) Pricing derivatives on financial securities subject to credit risk. J. Finance 50(1):53–85.CrossrefGoogle Scholar
  • Jarrow RA, Oxman J, Yildirim Y (2010) The cost of operational risk loss insurance. Rev. Derivatives Res. 13(3):273–295.CrossrefGoogle Scholar
  • Kaplan RS, Mikes A (2012) Managing risks: A new framework. Harvard Bus. Rev. 90(6):48–60.Google Scholar
  • KC DS (2013) Does multitasking improve performance? Evidence from the emergency department. Manufacturing Service Oper. Management 16(2):168–183.Google Scholar
  • KC DS, Terwiesch C (2009) Impact of workload on service time and patient safety: An econometric analysis of hospital operations. Management Sci. 55(9):1486–1498.LinkGoogle Scholar
  • KC DS, Terwiesch C (2012) An econometric analysis of patient flows in the cardiac intensive care unit. Manufacturing Service Oper. Management 14(1):50–65.LinkGoogle Scholar
  • Kennedy P (2003) A Guide to Econometrics (MIT Press, Cambridge, MA).Google Scholar
  • Kesavan S, Mani V (2015) An overview of industry practice and empirical research in retail workforce management. Agrawal N, Smith S, eds. Retail Supply Chain Management, International Series in Operations Research & Management Science, vol. 223 (Springer, Boston), 113–145.CrossrefGoogle Scholar
  • KPMG (2007) China’s city commercial banks: Opportunity knocks? http://www.kpmg.com.cn/en/virtual_library/Financial_advisory_services/Chin_comm_bank/Opportunity_knocks.pdf.Google Scholar
  • Kuntz L, Mennicken R, Scholtes S (2014) Stress on the ward: Evidence of safety tipping points in hospitals. Management Sci. 64(1):754–771.Google Scholar
  • Lapré MA, Nembhard IM (2011) Inside the organizational learning curve: Understanding the organizational learning process. Foundations Trends® Tech. Inform. Oper. Management 4(1):1–103.Google Scholar
  • Latham GP, Locke EA (1979) Goal setting: A motivational technique that works. Organ. Dynam. 8(2):68–80.CrossrefGoogle Scholar
  • Leippold M, Vanini P (2003) The quantification of operational risk. Preprint, submitted December 30, http://dx.doi.org/10.2139/ssrn.481742.Google Scholar
  • Lind T, Mehlum H (2010) With or without U? The appropriate test for a U-shaped relationship. Oxford Bull. Econom. Statist. 72(1):109–118.CrossrefGoogle Scholar
  • Locke EA (1968) Toward a theory of task motivation and incentives. Organ. Behav. Human Performance 3(2):157–189.CrossrefGoogle Scholar
  • Lupien SJ, Maheu F, Tu M, Fiocco A, Schramek TE (2007) The effects of stress and stress hormones on human cognition: Implications for the field of brain and cognition. Brain Cognition 65(3):209–237.CrossrefGoogle Scholar
  • Macchiavello R, Morjaria A (2015) The value of relationships: Evidence from a supply shock to Kenyan rose exports. Amer. Econom. Rev. 105(9):2911–2945.CrossrefGoogle Scholar
  • Mani V, Kesavan S, Swaminathan JM (2015) Estimating the impact of understaffing on sales and profitability in retail stores. Production Oper. Management 24(2):201–218.CrossrefGoogle Scholar
  • Manning C, Schutze H (1999) Foundations of Statistical Natural Language Processing (MIT Press, Cambridge, MA).Google Scholar
  • Marrison C (2002) The Fundamentals of Risk Measurement (McGraw Hill Professional).Google Scholar
  • McKinsey (2020) The future of operational-risk management in financial services. https://www.mckinsey.com/business-functions/risk/our-insights/the-future-of-operational-risk-management-in-financial-services.Google Scholar
  • Neil M, Fenton N, Tailor M (2005) Using Bayesian networks to model expected and unexpected operational losses. Risk Anal. 25(4):963–972.CrossrefGoogle Scholar
  • Oliva R, Sterman JD (2001) Cutting corners and working overtime: Quality erosion in the service industry. Management Sci. 47(7):894–914.LinkGoogle Scholar
  • Olson DL, Wu DD (2007) Enterprise Risk Management (World Scientific Publishing Company).CrossrefGoogle Scholar
  • Parkinson C (1958) Parkinson's Law: The Pursuit of Progress (Penguin, New York).Google Scholar
  • Perdikaki O, Kesavan S, Swaminathan JM (2012) Effect of traffic on sales and conversion rates of retail stores. Manufacturing Service Oper. Management 14(1):145–162.LinkGoogle Scholar
  • Peters LH, O’Connor EJ (1980) Situational constraints and work outcomes: The influences of a frequently overlooked construct. Acad. Management Rev. 5(3):391–397.CrossrefGoogle Scholar
  • Powell A, Savin S, Savva N (2012) Physician workload and hospital reimbursement: Overworked physicians generate less revenue per patient. Manufacturing Service Oper. Management 14(4):512–528.LinkGoogle Scholar
  • PwC (2016) First Take: Basel’s Standardized Measurement Approach for Operational Risk (PwC Financial Services Risk and Regulatory Practice). https://www.pwc.com/us/en/industries/financial-services/regulatory-services/library/basel-operational-risk-proposal-march-2016.html.Google Scholar
  • Sasser W, Klug J (1972) Benihana of Tokyo (Harvard Business School Publishing, Boston).Google Scholar
  • Scharfman JA (2008) Hedge Fund Operational Due Diligence: Understanding the Risks (John Wiley & Sons, New York).Google Scholar
  • Schmidt AM, DeShon RP (2007) What to do? The effects of discrepancies, incentives, and time on dynamic goal prioritization. J. Appl. Psych. 92(4):928.CrossrefGoogle Scholar
  • Setyawati L (1995) Relation between feelings of fatigue, reaction time and work productivity. J. Human Ergology (Tokyo) 24(1):129–135.Google Scholar
  • Shah R, Ball GP, Netessine S (2017) Plant operations and product recalls in the automotive industry: An empirical investigation. Management Sci. 63(8):2439–2459.LinkGoogle Scholar
  • Simonsohn U (2016) Two-lines: The first valid test of u-shaped relationships. Working paper, University of Pennsylvania, Philadelphia.Google Scholar
  • Society of Actuaries (2010) A new approach for managing operational risk. Accessed, https://www.soa.org/globalassets/assets/Files/Research/Projects/research-new-approach.pdf.Google Scholar
  • Staats BR, Gino F (2012) Specialization and variety in repetitive tasks: Evidence from a Japanese bank. Management Sci. 58(6):1141–1159.LinkGoogle Scholar
  • Tan TF, Netessine S (2014) When does the devil make work? An empirical study of the impact of workload on worker productivity. Management Sci. 60(6):1574–1593.LinkGoogle Scholar
  • Ton Z, Huckman RS (2008) Managing the impact of employee turnover on performance: The role of process conformance. Organ. Sci. 19(1):56–68.LinkGoogle Scholar
  • UFJ Holdings (2003) Combining internal loss data, scorecards and scenario analysis. Accessed March 1, 2021, https://www.newyorkfed.org/medialibrary/media/newsevents/events/banking/2003/con0529o.Google Scholar
  • Wooldridge JM (2010) Econometric Analysis of Cross Section and Panel Data (MIT Press, Cambridge, MA).Google Scholar
  • Xu K, Chan J, Ghose A, Han S (2017) Battle of the channels: The impact of tablets on digital commerce. Management Sci. 63(5):1469–1492.LinkGoogle Scholar
  • Xue M, Hitt LM, Harker PT (2007) Customer efficiency, channel usage and firm performance in retail banking. Manufacturing Service Oper. Management 9(4):535–558.LinkGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.