^aNational Institute of Bank Management, Pune, Maharashtra, India

Correspondence: Anjan Roy, National Institute of Bank Management, NIBM Road, Kondhwa Khurd, Maharashtra, Pune 411048, India. E-mail: aroy@nibmindia.org

Abstract

Organization structure plays an important influence on the elicitation of the desired risk-taking behavior in banks. Risk taking can be viewed as the susceptibility to problems such as moral hazard, conflict of interest and adverse selection that are precipitated due to the decision context and availability of information. Different structural forms have different informational properties and, therefore, the capacity to facilitate transparency and risk control. This study reviews the organization structure and risk types in banking and explores the possible links between the structural contingency and incidence of risk. The findings may assist decisions regarding organization structure of banks.