Overcoming Management Resistance with Human Factors and Cost-Benefit Analysis
Paterson points readers to appendix material on root-cause techniques and persuading management through human factors and cost-benefit arguments. The referenced audit cases are not included in this passage.
THE IDEA
Other Materials That May Be of Use
While written primarily for a management and second‐line audience (e.g. risk and compliance functions), Appendix B provides some helpful information concerning:
- Different RCA techniques to use, with their pros and cons.
- Thematic analysis and commonplace GRC improvement areas.
Concerning winning cost/benefit arguments to overcome a reluctance to act, Supplement C2 of this appendix provides two examples where audit teams have encountered resistance from management and then been able to overcome it by thinking in terms of human factors and cost/benefit. Those cases and their methods are not supplied here; the examples below are illustrative.
When to use it
When management is hesitant to implement audit recommendations due to perceived high costs.
In risk and compliance functions where human behavior significantly impacts the effectiveness of controls.
During internal audit engagements to build a persuasive business case for change, especially in cost-conscious organizations.
When addressing non-financial risks (e.g., safety, culture) that require justification in financial terms to gain approval.
FROM THEORY TO EVERYDAY LIFE
In practice
Audit Team Convincing Management to Implement a Security Upgrade
As an illustrative scenario, an audit team proposes a security upgrade and management questions its cost. The team compares implementation costs with plausible breach consequences, makes assumptions explicit, and discusses how employees would use the controls. This is not one of the supplied appendix cases.
Overcoming Resistance to Process Changes in Operations
As an illustrative scenario, auditors propose changing a manual approval process. They ask managers what disruptions they anticipate, examine workload and error evidence, and compare transition costs with possible savings. Whether management accepts the proposal remains open.
A MOMENT TO REFLECT
Put it to work.
Think of a time when your recommendation was rejected. How could you frame it using human factors and cost-benefit arguments to gain buy-in?
What psychological biases might cause management to resist audit findings, and how can a cost-benefit analysis address them?
Identify a situation where focusing solely on financial costs would miss key human factors that actually drive decision-making.
CONTINUE THE CONVERSATION
Source texts
- Beyond the Five Whys Root Cause Analysis and Systems Thinking (James C. Paterson)