A Model for Managing Risk Tolerance and Risk Capacity at Defense Industry Enterprises in the Production of Dual-Use Products

Abstract

The article discusses the current problem of risk management at enterprises of the military-industrial complex (MIC) that produce dual-use products (DUP) based on assessing the level of risk tolerance and risk intensity. The specific nature of these enterprises, which operate at the intersection of government regulation and market competition, requires new approaches to risk management that go beyond classical paradigms. Objective. The purpose of the study is to develop a comprehensive model that integrates risk resilience management (the ability to withstand negative impacts) and risk capacity (the ability to consciously accept risks in order to achieve strategic advantages) in the import substitution of dual-use products. Aim and tasks. The tasks that need to be solved in order to achieve the goal are to develop a comprehensive management model that integrates the concepts of risk tolerance and risk capacity; to adapt the proposed model to the specific requirements of defense industry enterprises that produce DUP; to develop criteria for assessing the levels of risk tolerance and risk capacity of production processes; to test the proposed model based on the analysis of current data (foreign trade of the Russian Federation for 2024-2025) and identify systemic risks based on the results of the analysis, as well as to assess the external environment from the perspective of the developed model. Methods. (The approaches and methods used to conduct the research). Theoretical Synthesis. Combining two distinct concepts - risk resilience (defensive capacity) and risk capacity (proactive/strategic capacity) - into a single, unified management framework. Model Development Designing a structured model with defined components for managing both resilience and capacity. Contextual Adaptation: Tailoring the model to the unique environment of MIC enterprises, which operate at the intersection of strict government regulation and market competition. Empirical Validation: The text implies the model will be tested (e.g., through analysis of trade data, case studies, or expert assessment) to identify systemic risks and evaluate the external environment. Results. The specific outcomes and findings of the study. A novel, comprehensive model for integrated risk management that simultaneously addresses risk resilience and risk capacity. A set of defined criteria for assessing an enterprise’s level of risk resilience and risk capacity. Findings from the model’s application that identify systemic risks and provide an assessment of the external business environment from a dual perspective (resilience and capacity). A tailored framework ready for implementation in MIC enterprises engaged in import substitution. Conclusions. The broader implications and significance of the study’s findings. Classical risk management paradigms are insufficient for MIC enterprises producing DUP due to their unique operating environment. An integrated approach that balances defensive (resilience) and offensive (capacity) risk strategies is essential for achieving strategic advantages, particularly in import substitution. The developed model provides a practical tool for enhancing strategic decision-making and overall enterprise effectiveness in conditions of sanction pressure and geo-economic instability. The scientific novelty lies in the synthesis of two opposing risk concepts - risk resilience and risk capacity - into a single, adaptive management model specifically designed for the high-stakes, hybrid (state-market) environment of the military-industrial complex. This moves beyond traditional risk management that often treats these concepts separately. Risk Resilience Management: Focused on enhancing the enterprise’s ability to withstand, absorb, and recover from negative impacts and shocks (e.g., sanctions, supply chain disruptions). Focused on building the enterprise’s ability to consciously accept and manage calculated risks to seize opportunities and achieve strategic advantages (e.g., developing new technologies, entering new markets for import substitution). The model is designed to be flexible and adaptive to the specificities of the MIC and the challenges of producing dual-use products. Strategic Orientation: It is not just about mitigating threats but is fundamentally linked to achieving strategic goals, making it a tool for competitive advantage in a volatile environment.