Enterprise Risk Management (ERM) Practices to Achieve Long Term and Sustainable Organization’s Goals: Case of Institut Teknologi Bandung (ITB)

Johan Candra

doi:10.47191/ijcsrr/v4-i12-16

Abstract

Every choice made in the pursuit of objectives has its risks. From day-to-day operational decisions to the fundamental trade-offs in the boardroom, dealing with uncertainty in these choices is a part of the organizational lives. A strategy is nothing more than a commitment to a set of coherent, mutually reinforcing policies or behaviours aimed at achieving a specific competitive goal. In order to ensure the implementation of efforts and the allocation of resources to achieve strategic goals, top management should conduct integrated risk management practices to all activities/initiatives of the organization’s management, both individually and collectively. Risk management is an intrinsic part of business planning and decision making. No direction is taken without looking at the potential risks and comparing them against the organization’s risk appetite. This paper aims to research in general the practice of enterprise risk management within Institut Teknologi Bandung (ITB) as a well-known and public-state-owned university in Indonesia. This research concludes that the enterprise risk management implementation is not fully implemented yet within ITB as an enterprise. Almost all respondents agree that the implementation of enterprise risk management has a positive and significant influence on the organization’s objectives achievement. Improving university performance overall will require an effective enterprise risk management practice. Author highly recommends ITB to adopt risk management practice based on ISO-31000 standard, and it can be combined with other risk management standards available nowadays if necessary. ITB needs to start the implementation at the soonest as possible, in order to maintain its strategic position as a top university in Indonesia, increase its competitive advantages to compete in the global scale, and at the same time achieving its vision and mission in a long-term and sustainable manner.

Highlights

Institut Teknologi Bandung (ITB) is a united collective form of all intellectuals, who have high dedication in advancing science, technology, art, as well as social and humanities, through the Three Pillars of Higher Education
This paper aims to research in general the practice of enterprise risk management within Institut Teknologi Bandung (ITB) as a well-known and public-state-owned university in Indonesia
As-is analysis is being done by using questionnaire and interviews, the best practices is being performed by interviewing the subject matter experts and referring to ISO-31000 – RM, COSO – enterprise risk management (ERM), text book, and benchmarking to other top universities in Indonesia and Singapore

Summary

Introduction

Institut Teknologi Bandung (ITB) is a united collective form of all intellectuals, who have high dedication in advancing science, technology, art, as well as social and humanities, through the Three Pillars of Higher Education. ITB has contributed to the birth of many crucial roles in Indonesia. ITB is a comfortable and steady place for distinct intellectual and cultural activities. ITB provides an academic atmosphere that is open to ideas and experiences, critical and visionary thoughts, accompanied by attitudes that uphold academic freedom in scientific and cultural diversity. In order with the Indonesian community's hopes as well as all ITB people, ITB Academic Senate has assembled the ITB Development Master Plan 2020-2025, which provides the directions for development to make the campus as "a Globally Respected and Locally Relevant". ITB must always be an adaptive learning organization to achieve long-term and sustainable goals

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