This thesis is structured into seven chapters as outlined in Figure 1.3. The overview of each chapter is presented below.
Chapter One: This chapter presents an overview of this research. It describes the background information of this study. It highlights the importance and challenges of the Pakistan banking industry. It provides description of the aim, objectives, research questions, rational and significance of the study and also presents an outline of the methodology employed in this research.
Chapter Two: The purpose of second chapter is to undertake detailed literature review on risk management and its effectiveness for banks. It describes the functions and roles of banks, the different types of banking risks and possible classification of these risks. This chapter states the background and rationale for risk management by considering both banking regulation as well as bank management. A detail discussion on the risk management guidelines issued by domestic (SBP) and international bodies (Basel Committee) is also reported in the current chapter. It also presents the theoretical considerations for this study covering the relevance of banking risk management function and its relationship with the performance of banks. Different methods along with selected method to measure the performance of banks are also discussed in detail. Furthermore, this chapter provides an avenue to explore the potential gaps in the existing literature which serve the basis of this study.
Chapter Three: Third chapter intends to provide details about the research methodologies that are applied to achieve the objectives of the research. It describes the research philosophy, research approach, research strategies, research design and
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time horizon of this study. A brief description of the study population and selected sampling technique is discussed in this chapter.
Chapter Four: This chapter describes a broad explanation of the systems thinking approach. A brief description on the purpose and use of systems thinking approach is provided in this chapter. This chapter explains interviews data collection procedures and analysis results. It also demonstrates the qualitative system dynamics model of the risk management system of Pakistani banks in terms of sub- system causal loop diagrams as well as a generic causal loop diagram.
Chapter Five: This chapter intends to examine relationship between risk management practices and different aspects of risk management. It provides a brief detail of the research instrument and study hypotheses. Different descriptive as well inferential statistics analysis results are reported in this chapter. Bedsides, a detail discussion of the questionnaire data analysis results is also presented in it to answer the particular research questions of this study.
Chapter Six: This chapter aims to examine the relationship between risk management and performance of banks in Pakistan. This chapter presents a thorough explanation of the particular study variables used to investigate the relationship between risk management and performance. This chapter provides the results of descriptive as well inferential statistics analysis. It also discusses the results of two stage data envelopment analysis in order to test the study hypothesis and to achieve the particular objective of this study.
Chapter Seven: The final chapter of this thesis presents a summary of findings and an overall conclusion from the analysis conducted in the preceding chapter. In order to draw down the final findings and discussion, the key results from the both qualitative (Chapter Four) as well as quantitative methods (Chapter Five and Six) are brought together in Chapter Seven. Various limitations of this study and several recommendations for the future research are also discussed.
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Figure 1.3: Structure of the thesis Introduction and Context of Study
Background of the Study, Research Aim and Objectives, Research Questions, Rational of the
Study, Significance of the Study
(Chapter One)
(Chapter 1)
Data Analysis, Results and Discussion (Chapter Four, Five and Six)
Qualitative System Dynamics Model of
the Risk Management System of
Pakistani Banks (Chapter Four) Different Aspects of Risk Management Practices in Pakistani Banks
(Chapter Five)
Risk Management and Performance
(Chapter Six) Literature Review
Definition, Functions and Role of Banks, Banking Risk and Classification, Risk Management in
Banks, Risk Management and Performance
(Chapter Two)
(Chapter 1)
Conclusion
Summary of Key Findings, Contribution of Research, Limitations of Research, Recommendations
of Future Prospect
(Chapter Seven)
(Chapter 1)
Research Methodology
Research Philosophy, Research Approach, Research Strategy, Research Design, Population and Sampling, Primary as well as Secondary Data Collection and Analysis Procedures
(Chapter Three)
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Chapter Two Literature Review
2.1 Introduction
The initial search and review of existing literature help researchers to generate and refine their research ideas (Saunders, Lewis and Thornhill, 2012). Therefore, this chapter intends to provide a detailed literature review on risk management practices and their impact on the performance of banks. The available literature in banking field has been dominated by the design and adoption of different risk management frameworks and their implications on banks performance, using different theoretical perspectives and methodologies over the last two decade (Stan-Maduka, 2010). A detailed discussion on existing literature and the relative dearth of research on risk management and banking performance specifically in Pakistan is provided in this chapter. The current chapter of this thesis is presented in different key sections to cover the definition, functions and roles of banks, classification of different banking risks, risk management practices and their effectiveness for banks. In addition, the conclusion of this chapter in terms of a summary is also provided in Section 2.9.