Skillful Use of Enterprise Risk Management (ERM) in Leveraging Strategy Success and Holistic BSC-based Hotel Performances

Abstract

Realizing that enterprise risk management (ERM) is not a straightforward topic or a competence to master, it is important empirical research can find a way to convince the management team to adapt ERM. This research exploits the concept of strategic management, underpinning on a logic that a strategic match of both internal management focus and external environmental condition is crucial for strategy success. Based on the structural equation model (SEM) model tests using Maximum Livelihood (ML) function, it confirms that, as the competitive environment becomes more challenging, the roles of mission clarity and core value communicated to the organizational members, and establishing risk governance system and cultures, become very important and should be aligned. This research extends beyond this fundamental concept, stressing that risk management can function to reduce loss possibility of strategy execution, which leads to SEM confirming ERM as a significant mediator. Besides, this research contributes further to exhibit linkages of both strategy success and ERM to BSC-based performances, which makes the ERM and strategic management more holistic in nature. The accomplishment was based on 215 valid returned participations of the hotels located in Uttaradit and Phitsanulok, Thailand. Besides the theoretical contributions, this research makes use of statistical comparative analyses of many demographic variables (i.e. position, type of job, number of hotel rooms, service types, HR and hotel operations) to offer a rich spectrum of practical implications.