Organizational Risk Prioritization Using DEMATEL and AHP towards Sustainability

Organizational Risk Prioritization Using DEMATEL and AHP towards Sustainability

2024 | Eliana Judith Yazo-Cabuya, Jorge A. Herrera-Cuartas, Asier Ibeas
This article presents a comprehensive approach to prioritizing organizational risks focused on sustainability, using the Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytic Hierarchy Process (AHP) methods. The study characterizes five types of organizational risks—geopolitical, economic, social, technological, and environmental—and proposes sub-risks for each. A group of experts from various sectors was surveyed to assess these risks and sub-risks, and the responses were used as input for the DEMATEL and AHP methods. The DEMATEL method identified the following risk priorities: economic, geopolitical, social, technological, and environmental. The AHP method prioritized sub-risks within each risk type, such as massive data fraud or theft incident (technological risk), deficit in economic growth (economic risk), water depletion (environmental risk), lack of ethics in business conduct (geopolitical risk), and chemical safety (social risk). Sensitivity analysis revealed that positive variations did not significantly alter the rankings, while negative variations indicated a notable decrease in the relative importance of certain sub-risks. The study highlights the importance of multi-criteria decision-making (MCDM) methods in addressing the complexity of sustainability risks and provides a robust methodology for organizations to manage and prioritize these risks effectively.This article presents a comprehensive approach to prioritizing organizational risks focused on sustainability, using the Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytic Hierarchy Process (AHP) methods. The study characterizes five types of organizational risks—geopolitical, economic, social, technological, and environmental—and proposes sub-risks for each. A group of experts from various sectors was surveyed to assess these risks and sub-risks, and the responses were used as input for the DEMATEL and AHP methods. The DEMATEL method identified the following risk priorities: economic, geopolitical, social, technological, and environmental. The AHP method prioritized sub-risks within each risk type, such as massive data fraud or theft incident (technological risk), deficit in economic growth (economic risk), water depletion (environmental risk), lack of ethics in business conduct (geopolitical risk), and chemical safety (social risk). Sensitivity analysis revealed that positive variations did not significantly alter the rankings, while negative variations indicated a notable decrease in the relative importance of certain sub-risks. The study highlights the importance of multi-criteria decision-making (MCDM) methods in addressing the complexity of sustainability risks and provides a robust methodology for organizations to manage and prioritize these risks effectively.
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