Overreliance, self-herd effect and internal control, risk management of organization

The article first constructed a dynamic excessive reliance network model and presented a theory “self-herd effects of excessive reliance”, exploring that the principal´s overreliance on the agents even resulting in his self-herd effect has great worse impacts on the organizations´ internal control and risk management from the psychological perspective basing on the reality in which almost existing literatures are all from the perspective of institutional rule to research enterprises´ internal control and risk management. Then I analyzed deeply its consequences by using domestic a few famous and typical cases, and further deepen the conclusion that because of the principal´s excessive reliance on the agent even leading his self-herd effect on his misuse of competent people decision or not replacement employees periodically, the organization go to wreck finally. The article also presented some policy recommendations to avoid the above risks.