Enterprise Risk Management: Re-Conceptualizing the Role of Risk and Trust on Information Sharing in Transnational Alliances

2014 ◽  
Vol 28 (2) ◽  
pp. 257-285 ◽  
Author(s):  
Vicky Arnold ◽  
Tanya S. Benford ◽  
Clark Hampton ◽  
Steve G. Sutton
Keyword(s):  
Risk Management ◽  
Theoretical Model ◽  
Strategic Management ◽  
Information Sharing ◽  
Enterprise Risk Management ◽  
Equation Modeling ◽  
Research Model ◽  
Sensitivity Testing ◽  
Enterprise Risk ◽  
Competing Models

ABSTRACT Globalization places greater emphasis on the development of transnational alliances. The greatest benefits from alliances are derived from high-level information sharing, but vulnerability escalates with information sharing. This study examines risk in transnational alliances based on a theoretical model drawing from enterprise risk management (ERM) as a strategic management effort. This theoretical model posits that ERM strategies focus on business risk as the primary determinant of alliance partner selection and continuity, particularly within global relationships, whereas prior management control research focused on trust. The purpose of this study is to examine the influence of ERM on risk and trust associated with transnational alliances and the resulting impact on interorganizational information sharing. Survey data are gathered from 200 senior-level managers monitoring transnational alliances. Structural equation modeling is used to test the hypothesized relationships. Results provide strong support for the research model, showing that high ERM is associated with decreased risk, increased trust, and enhanced information sharing. Given the ongoing debate over the relationship directionality between trust and risk, we conducted additional sensitivity testing. Competing models focusing on trust as the key control mechanism are tested to assess the strength of our research model. Our risk-oriented research model demonstrates stronger explanatory power than competing models. Overall, our results show ERM substantially alters strategic management of transnational alliances, and has become a major influence on interorganizational risk, trust, and information sharing.

scholarly journals The Effect of Enterprise Risk Management on Ameliorating Competitive Advantage: A Cross-Sectional Study of Software Houses in Pakistan

2021 ◽  
Vol 29 (4) ◽  
pp. 2525-2543
Author(s):  
Sameeta Javaid ◽  
Faheem Aslam
Keyword(s):  
Risk Management ◽  
Organizational Culture ◽  
Competitive Advantage ◽  
Structural Equation ◽  
Enterprise Risk Management ◽  
Primary Data ◽  
Equation Modeling ◽  
Validity And Reliability ◽  
Cross Sectional ◽  
Enterprise Risk

In the current dynamic environment, organizations need a more anticipatory and effective risk management system. Implementing the holistic Enterprise Risk Management (ERM) process will perceive, analyze, and assess risks as they must be regarded from the entire enterprise’s perspective. The research aims to empirically analyze the effect of ERM practices on the Competitive Advantage (CA) and examine the moderating role of Organizational Culture (OC) in the Software industry of Pakistan. The primary data were obtained from 250 respondents through the questionnaire method. The validity and reliability were analyzed by using Structural Equation Modeling Analysis, PLS Algorithm, and Bootstrapping. The results show that the implementation of ERM has a significant effect on firms’ competitive advantage. The analysis supports the hypothesis and identifies the positive moderating effect of organizational culture in carrying out ERM programs, which can enhance organizational competitiveness. This study is useful for managers to help them in the planning and decision-making phase so that they can act responsibly in a rapidly changing environment and consider organizational culture as one of the key factors of the ERM program that helps accomplish organizational competitiveness.

scholarly journals INTERACTION EFFECT OF SUSTAINABILITY REPORTING AND ENTERPRISE RISK MANAGEMENT ON BUSINESS PERFORMANCE

2021 ◽  
Vol 5 (1) ◽  
pp. 91-114
Author(s):  
Michael Goman ◽  
Fransiskus Eduardus DAROMES ◽  
Paulus Tangke
Keyword(s):  
Risk Management ◽  
Business Performance ◽  
Sustainability Reporting ◽  
Enterprise Risk Management ◽  
Coefficient Of Determination ◽  
Significant Positive Effect ◽  
Research Model ◽  
Enterprise Risk ◽  
The Relationship ◽  
Positive Effect

This study provides empirical evidence of the interaction of sustainability reporting and Enterprise risk management on business performance. A number of previous literature has found a significant positive effect of ERM implementation on overall business performance, however, the number of studies investigating the interaction of sustainability reporting and ERM is still limited. We build this research model based on modern portfolio theory and stakeholder theory. Data testing was carried out using the moderation regression method in examining the three variable relationships above. The results showed that there was a significant positive effect of ERM on business performance as measured using EVA. Meanwhile, sustainability reporting, although able to strengthen the coefficient of determination relationship between ERM and EVA, does not have a significant moderating effect on the relationship between the two variables.

scholarly journals Aligning Corporate Governance with Enterprise Risk Management Adoption in the Nigerian Deposit Money Banks

2017 ◽  
Vol 1 (2) ◽  
pp. 4-14
Author(s):  
Ishaya John Dabari ◽  
Sini Fave Kwaji ◽  
Mohamad Zulkurnai Ghazali
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Structural Equation ◽  
Internal Audit ◽  
Policy Formulation ◽  
Enterprise Risk Management ◽  
Equation Modeling ◽  
Survey Method ◽  
Cross Sectional ◽  
Enterprise Risk

The alarming rate of corporate failures as seen universally has necessitated this study apparently; the failures have known no boundary as it cuts across both the very big organizations and the very small corporate entities especially financial industries. The objective of this study is to align corporate governance (CG) with Enterprise Risk Management (ERM) adoption in the Nigeria Deposit Money banks (DMBs). The study adopted cross-sectional research design, survey method and questionnaire technique to collect data in 21 Nigerian DMBs. A total of 722 questionnaires were distributed, out of which 435 were found usable for further analysis. The research adopted Structural Equation Modeling in Stata for the data analysis. Empirical evidence suggests that internal audit effectiveness, human resource competency and top management commitment were positively significant. This implies that there is a significant positive relationship between CG and ERM adoption. Conclusively, the study has provided insightful results for the banking industry, regulators, practitioners and academia that will potentially assist in policy formulation, implementation and evaluation. Thus, a clarion calls for all the stakeholders in the industry to guarantee broad implementation of ERM in all the banks in compliance with the CBN Code of corporate governance.

scholarly journals Determinants of enterprise risk management disclosures: Evidence from insurance industry

Accounting ◽  
2021 ◽  
Vol 7 (6) ◽  
pp. 1331-1338 ◽  
Author(s):  
Dirvi Surya Abbas ◽  
Tubagus Ismail ◽  
Muhamad Taqi ◽  
Helmi Yazid
Keyword(s):  
Risk Management ◽  
Stock Exchange ◽  
Enterprise Risk Management ◽  
Ownership Concentration ◽  
Insurance Companies ◽  
Equation Modeling ◽  
Management Committee ◽  
Enterprise Risk ◽  
Business Size ◽  
Risk Management Committee

The aim of this study is to determine if there is a relationship between the number of commissioners on the committee, ownership concentration, the Risk Management Committee, business size, and leverage on enterprise risk management. Take, for example, insurance companies listed on the Indonesia Stock Exchange. Purposeful sampling was used in the sampling process. Supplementary data was obtained from the website of the Indonesia Stock Exchange. Panel data regression analysis was used as the research method. Although business size had an effect on enterprise risk management transparency, board size, stake concentration, the risk management committee, and leverage had little effect. By integrating the variables Board of Commissioners Size and Ownership Concentration, as well as employing dynamic equation modeling to examine the above relationships, which have been overlooked in previous analyses, and analyzing more recent evidence from a developed world perspective, this study contributes to the management accounting literature and organization theory. The findings would be useful to Indonesian practitioners, especially those in management positions in insurance companies and financial institutions.

scholarly journals A Theoretical Framework for Enterprise Risk Management and Organizational Performance

2021 ◽  
Vol 14 (5) ◽  
pp. 63
Author(s):  
Mohamed Santigie Kanu
Keyword(s):  
Risk Management ◽  
Strategic Planning ◽  
Organizational Performance ◽  
Business Environment ◽  
Enterprise Risk Management ◽  
Empirical Literature ◽  
Equation Modeling ◽  
Academic Literature ◽  
Enterprise Risk ◽  
Risk Culture

The implementation of holistic risk management, enterprise risk management (ERM), is believed to contribute significantly to the successful performance of modern-day organizations that operate in an increasingly volatile and dynamic environment. In an environment of scarce resources and information uncertainty, ERM, risk culture, and strategic planning is required to face an unstable business environment to achieve organizational goals. Several conceptual and empirical studies have provided mixed evidence on the value relevance of ERM. Scholars have also demonstrated that the effects of ERM on performance are contingent upon certain contextual variables. Currently, the academic literature is silent on the joint relationship of ERM, risk culture, strategic planning, and organizational performance. The purpose of this study is to uncover this research gap by analytically reviewing pertinent conceptual and empirical literature to establish the possibility that the impact of ERM on organizational performance is transmitted through risk culture and strategic planning. This paper advances these evolving suggestions, which hinges on the conclusion that the direct effect of ERM on organizational performance is debatable and hence inconclusive due to the possible mediating influence of risk culture and strategic planning. A framework is conceptualized to examine the mediating effects of these two constructs on the relationship. The study proposes partial least squares structural equation modeling for statistical analysis using the unexplored multiple mediation analysis in the ERM academic literature. This paper’s postulations would guide empirical research in various contexts to address the knowledge gaps in the extant literature.

scholarly journals Influence of Family Culture on Enterprise Risk Management in Brazilian Companies

2021 ◽  
Vol 25 (6) ◽  
Author(s):  
Elisane Brandt ◽  
Márcia Zanievicz da Silva ◽  
Franciele Beck
Keyword(s):  
Risk Management ◽  
Family Involvement ◽  
Structural Equation ◽  
Management Practices ◽  
Family Businesses ◽  
Enterprise Risk Management ◽  
Family Influence ◽  
Equation Modeling ◽  
Family Culture ◽  
Enterprise Risk

ABSTRACT Context: family involvement creates specific goals that include family interests and values, and is used to pursue the family’s vision, creating effective corporate governance and risk management practices. Objective: our objective is to evaluate the relationship between family influence and enterprise risk management in Brazilian family businesses. Method: data from 142 family businesses was analyzed using descriptive statistics and structural equation modeling. The construct of enterprise risk management comprised: identification, evaluation, response, and communication. Family influence was captured by power, experience, and culture. Results: the results broaden the understanding that, among the three family dimensions investigated, culture is the one that better explains risk management practices. Conclusions: we concluded that the higher the level of family culture, the higher the level of attention to enterprise risk management.

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