Enterprise Risk Management Research Articles

Risk management of small and medium-sized enterprises (SMEs) for upcoming research priorities

PurposeThis paper aims to present a comprehensive assessment of the literature about the research agenda for future studies on risk management in small and medium-sized businesses (SMEs) with a research agenda for bibliometric analysis. The author's goals are to point out inconsistencies and gaps in the literature and to suggest directions for future study.Design/methodology/approachA total of 147 papers were analyzed in terms of bibliographic information, research design, and findings. These included publication by year, most cited documents, citation by year, publication by authors, publication by subject area, publication by country, publication by affiliation, funding sponsor, network representation of keyword co-occurrence, and cluster visualization of keyword co-occurrence. This study used bibliometric analysis methods, keyword searches, and suitability assessment for bibliometric analysis.FindingsThe bibliometric research revealed a number of potential risk categories for small and medium enterprises (SMEs). In addition, an analysis of the risk-related elements aimed to avoid or reduce their adverse effects, the published study highlights how crucial a risk management procedure is for SMEs. Risk factors were also shown to be unavoidable; as a result, everyone needs to practice social responsibility in order to reduce the detrimental effects on the economy.Research limitations/implicationsFuture studies are required on risk identification, analysis, plan implementation, and control in the context of small and medium-sized enterprise risk management.Originality/valueThis work represents the first in a bibliometric analysis of risk management in small and medium-sized enterprises (SMEs) for the future research agenda.

Design and research of enterprise risk management avoidance system based on KGN-LLM algorithm

With the increasing complexity of enterprise asset management, traditional risk management methods have become inadequate to meet the demands of real-time monitoring and efficient decision-making. In order to improve the efficiency and security of enterprise asset management, this paper proposes a method for reasoning the avoidance of enterprise asset flow management risks based on the KGN-LLM algorithm. It primarily involves the field of financial risk avoidance, including preprocessing and analysis of enterprise asset flow data, constructing a knowledge graph of enterprise asset flow data using the KGN-LLM model, monitoring real-time asset management data, identifying and analyzing risks, evaluating identified risks, and implementing asset management risk avoidance decisions. It is demonstrated that this method of reasoning the avoidance of enterprise asset flow management risks based on the KGN-LLM algorithm can effectively improve the efficiency and security of enterprise asset management.

Analisis Risiko Operasional Berdasarkan Pendekatan Enterprise Risk Management (ERM) Pada Roti Kukus Manju Cabang Tuasan

In running a business there are definitely risks. Risks that arise from the internal and external environment of the business can result in the business experiencing losses. This research method uses a qualitative descriptive research method with data collection techniques originating from observations and interviews with the owner of the Manju Steamed Bread business, Tuasan Branch. This research will use Enterprise Risk Management (ERM), where ERM implementation is usually implemented by identifying risks, assessing and controlling risks. Businesses that use Enterprise Risk Management (ERM) can get risks ranging from low (low), medium (medium), high (high). This research aims to identify risks that may occur in the Manju Steamed Bread business, Tuasan Branch, then create a risk matrix to determine the worst risks that must be prioritized in control. The research results show that there are operational risks, namely employees not following steaming machine operating procedures, lack of maintenance of the machine and bread steaming equipment by employees and delays in the arrival of raw materials. This risk will affect the quality of taste, service, and can result in losses due to shop closures due to delays in the arrival of raw materials, so risk management is needed which aims to reduce operational risks that may occur.

Analisis Risiko Operasional Berbasis Pendekatan Enterprise Risk Management Pada Usaha Thrift Online Yodhsi Fashion Cirebon

The Thrifting Shop has become one of the Small and Medium Enterprises (SMEs) that have experienced significant development over the past few years. The current era of globalization has led to consumer behavior influencing the lives of the general public. This is influenced by changing habits and lifestyles. This behavior requires a larger budget, as it is no longer just about meeting needs but also about satisfying desires. Currently, there is a trend towards second-hand clothing (fashion thrift) to meet the increasing demand of consumers, considering that times have changed, buying second-hand clothes has become a trend and a lifestyle that is growing rapidly in Indonesia. Therefore, many new business owners are trying to venture into this thrift business through online platforms like live e-commerce. When discussing the sustainability of a business, it is undeniable that it will face risks. These risks are not only caused by internal factors but also by external factors that force us to be more vigilant in facing these risks. These risks do not only appear in large businesses but also in small-scale businesses like SMEs. This study aims to identify operational risks, their causes, and their impact on business activities and find solutions to address operational risks that occur. The research object is Yodshi Fashion, which is one of the online thrift stores in Cirebon. This study uses a qualitative method with data collection techniques through online observation and interviews with business owners, as well as an analysis based on Enterprise Risk Management (ERM). The research results show that there are operational risks, such as the mismatch between the quality of clothes and stock with customer demand, fluctuations in live traffic on e-commerce, high administrative costs on e-commerce, intense competition among online thrift sellers, a large number of PHP customers during live sales, and the cancellation of COD orders by customers. These risks include internal and external operational risks with a high risk level that occurs in Yodshi Fashion Cirebon. These operational risks can affect the quality of products presented and disrupt the service process for customers. Risk management is crucial for operational activities to minimize and prevent the possibility of risks that can cause losses for Yodshi Fashion Cirebon.

Exploring the effect of enterprise risk management for ESG risks towards green growth

PurposeDespite the growing emphasis on sustainability and the need to manage environmental, social, and governance (ESG) risks, the direct relationship between enterprise risk management (ERM) and green growth (GG) has not been investigated. This study seeks to fill this gap by examining the effect of ERM on the GG of oil and gas (O&G) companies in Malaysia.Design/methodology/approachThe study used panel data regression models to analyze panel data from 2012 to 2021. For computing GG, we adapted the Organization for Economic Cooperation and Development’s (OECD) GG framework. ERM is computed using COSO and WBCSD guidelines for ESG-related risks. Weighted content analysis is used to measure ERM and GGFindingsThe findings derived from the content and descriptive statistics analyses indicate a consistent and ongoing rise in the adoption of ERM practices over time. However, some companies are still in the initial stages of incorporating ERM to address ESG risks. The study’s findings unequivocally establish a substantial and positive relationship between ERM and GG. ERM drives GG by significantly influencing its environmental and resource productivity dimensions. The study further reveals that the impact of ERM on economic opportunities and policy responses, as well as the natural asset base, is statistically significant, albeit with relatively lower coefficient values.Practical implicationsTo enhance the legitimacy of organizations and foster positive stakeholder relationships, regulators, governments, and policymakers should actively promote the adoption of ERM standards that specifically address ESG risks, as outlined by COSO and WBCSD. This strategic alignment with risk management practices will ultimately contribute to improving green growth for organizations.Originality/valueTo the best of the authors' knowledge, this is the first study examining ERM’s effect on GG. The study adds to the existing literature by focusing on ERM’s role in a company’s GG. It clarifies ERM’s significant effect on diminishing emerging ESG risks and advancing GG

Optimizing firm performance through contingency factors, enterprise risk management, and intellectual capital in Southeast Asian mining enterprises

Enterprise risk management (ERM) is a crucial aspect of corporate operations. This study examines the impact of environmental uncertainty, industry competition, and firm complexity on Enterprise Risk Management implementation and firm performance in the Southeast Asian mining industry. Utilizing data from 205 mining companies listed on Southeast Asian stock exchanges from 2016 to 2022, the analysis employs panel data regression methods. The findings reveal that environmental uncertainty does not significantly affect ERM, while industry competition positively influences ERM but negatively impacts firm performance. Firm complexity positively affects both ERM and performance. ERM mediates the relationships between industry competition, firm complexity, and performance, while intellectual capital moderates the effect of ERM on performance. These results underscore the strategic importance of integrating ERM practices and developing intellectual capital to enhance firm performance amidst competitive and complex business environments. The study contributes to the literature by providing empirical evidence on the nuanced relationships between these variables in the context of the Southeast Asian mining sector and offers practical insights for policymakers and industry leaders.

Enterprise Risk Management Practices in Malaysian Small and Medium-Sized Enterprises: An Overview

SMEs are crucial to the economic growth of many countries, particularly developing ones like Malaysia. SMEs have contributed significantly to economic growth but they also often struggle with problems related to poor management, which increases the risk of failure and closure. Effective risk management is essential in sustaining the long-term sustainability of SMEs and improving managerial performance. This study investigates the enterprise risk management (ERM) practices used by Malaysian SMEs in the manufacturing sector. The factors influencing the risk management behaviors and practices of SME manufacturing workers and their compliance with risk management protocols are examined in this study using a mixed-methods approach. This study focuses on employee behavior to better understand how organizational culture affects risk management techniques in SMEs. To design effective reward and recognition programs, this research also examines the psychological components of risk management while accounting for the organizational, societal, and financial challenges that followed the 2008 financial crisis. The study also examines the impact of organizational structure on the efficacy of risk management initiatives in small and medium-sized enterprises. The practical findings of the study are expected to demonstrate the extent to which ERM influences organizational effectiveness in Malaysia's SME manufacturing sector. This study intends to equip industry participants with the knowledge and confidence necessary to implement ERM successfully in their operations by offering insights into the factors that encourage and impede ERM adoption and its impact on organizational performance. This research advances ERM practices among SMEs and strengthens Malaysian businesses' resilience and risk awareness.

The Role of Corporate Governance in Enterprise Risk Management (ERM) Disclosure

The purpose of this study is to determine the effect of the existence of the risk management committee, the reputation of the auditor, and the size of the board of commissioners on the disclosure of enterprise risk management (ERM). The existence of the risk management committee is measured by a dummy variable proxy, Which is used to gauge auditor reputation, and the total number of commissioners on the board is used to gauge the board's size. The measurement of ERM disclosure as a dependent variable is measured by disclosure items based on the ERM Framework issued by COSO (2004). Using the purposive sample approach, this study examined a subset of businesses that were listed in the LQ45 Index from 2012 to 2014. The data used is obtained from the annual report listed on the Indonesia Stock Exchange. There were 15 companies during 2012-2014 that met the criteria. The analysis method used is multiple linear regression analysis. The results showed that the existence of the risk management committee and the reputation of the auditor had a significant effect on the disclosure of enterprise risk management, while the size of the board of commissioners did not have a significant effect on the disclosure of enterprise risk management.

Integrating ERM with HACCP for Enhanced Efficiency in SME Beverage Manufacturing: The Case of SME Beverage Manufacture Company in Rembang, Indonesia

This study presents an approach to determining the most impactful risks faced by an SME beverage manufacturing company in Rembang, Indonesia. Indonesia’s food and beverage market is highly competitive, especially for small and medium-sized enterprises (SMEs) that aim to sustain and grow their businesses. Focusing more on their business strategy, these SMEs often overlook risk management, which can lead to significant losses. The study employs a methodology that combines Enterprise Risk Management (ERM) with Hazard Analysis Critical Control Points (HACCP) to detect and evaluate potential risks in the production process, ultimately providing recommendations for the best possible corrective actions to manage these risks. The ERM framework highlighted three major risks associated with defective products, water shortage, and blackout, while the HACCP analysis pinpointed five critical control points (CCPs) in the production process of boiling, cooling, mixing, filling/bottling, and packaging. Based on these results, the study suggests corrective actions of installing backup generators, securing additional water supplies, and implementing homogenizers will benefit the company.

Enterprise financial sharing and risk identification model combining recurrent neural networks with transformer model supported by blockchain

The objective of this study is to investigate methodologies concerning enterprise financial sharing and risk identification to mitigate concerns associated with the sharing and safeguarding of financial data. Initially, the analysis examines security vulnerabilities inherent in conventional financial information sharing practices. Subsequently, blockchain technology is introduced to transition various entity nodes within centralized enterprise financial networks into a decentralized blockchain framework, culminating in the formulation of a blockchain-based model for enterprise financial data sharing. Concurrently, the study integrates the Bi-directional Long Short-Term Memory (BiLSTM) algorithm with the transformer model, presenting an enterprise financial risk identification model referred to as the BiLSTM-fused transformer model. This model amalgamates multimodal sequence modeling with comprehensive understanding of both textual and visual data. It stratifies financial values into levels 1 to 5, where level 1 signifies the most favorable financial condition, followed by relatively good (level 2), average (level 3), high risk (level 4), and severe risk (level 5). Subsequent to model construction, experimental analysis is conducted, revealing that, in comparison to the Byzantine Fault Tolerance (BFT) algorithm mechanism, the proposed model achieves a throughput exceeding 80 with a node count of 146. Both data message leakage and average packet loss rates remain below 10 %. Moreover, when juxtaposed with the recurrent neural networks (RNNs) algorithm, this model demonstrates a risk identification accuracy surpassing 94 %, an AUC value exceeding 0.95, and a reduction in the time required for risk identification by approximately 10 s. Consequently, this study facilitates the more precise and efficient identification of potential risks, thereby furnishing crucial support for enterprise risk management and strategic decision-making endeavors.

Unlocking Firm Value Indonesia's Intellectual Capital Triumphs, Risk Management Falters

This study examines the impact of Intellectual Capital Disclosure (ICD) and Enterprise Risk Management Disclosure (ERMD) on the value of mining companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2021, with financial performance as an intervening variable. Using purposive sampling, data from 12 companies were analyzed with SPSS 26. The results show that ICD positively affects both firm value and financial performance, while ERMD negatively impacts both. Financial performance enhances firm value but does not mediate the ICD-firm value relationship; it does mediate the ERMD-firm value relationship. These findings highlight the importance of ICD for improving firm performance and value, suggesting areas for future research to extend the study period and include more variables. Highlight: ICD Impact: ICD significantly boosts firm value and financial performance. ERMD Effect: ERMD negatively influences firm value and financial performance. Financial Mediation: Financial performance mediates ERMD-firm value but not ICD-firm value. Keywoard: Intellectual Capital Disclosure, Enterprise Risk Management, Financial Performance, Firm Value, Mining Companies

Концептуальные вопросы создания систем управления рисками промышленных предприятий

The article reveals the fundamental issues of creating risk management systems for industrial enterprises and provides a brief description of the main approaches to identifying risks and related goals and assessment methods. The aim of the study is to summarize modern foreign theoretical approaches to the creation of enterprise risk management system. Using the method of bibliographic analysis, an overview of modern main conceptual foreign approaches to understanding enterprise risks and risk management is given. The interrelation between risk reduction (elimination) activities and the types of risks undertaken is elucidated. Various applications of risk management systems within companies are presented, along with examples of the most common risk management systems employed by industrial enterprises and a synthesis of the experience in applying the most effective risk management methods. The conclusion emphasizes the necessity of meticulous risk identification and analysis in building corporate risk management systems. Moreover, the presented examples of successful risk management systems serve as valuable benchmarks for industry practitioners seeking to enhance their risk mitigation capabilities. Moving forward, continued research and refinement of risk management methodologies are essential for adapting to evolving business landscapes and ensuring the resilience of industrial enterprises in the face of uncertainty. Ultimately, proactive risk identification and analysis remain pivotal in fostering a culture of risk-awareness and resilience within organizational frameworks.

Impact of ERM and Capital Structure on Firm Value in Indonesia

This study examines the impact of enterprise risk management (ERM) and capital structure on firm value, with firm age and size as moderating factors, using data from 47 banking companies listed on the Indonesian Stock Exchange (2019-2021). Utilizing quantitative methods and Moderate Regression Analysis with SPSS, the results indicate that ERM does not affect firm value, while capital structure has a positive effect. Firm age weakens the impact of ERM but strengthens the effect of capital structure on firm value. Conversely, firm size enhances the impact of ERM but weakens the effect of capital structure. These insights are crucial for investors in the banking sector. Highlight: ERM does not significantly impact firm value. Capital structure positively influences firm value. Firm age and size moderate these effects. Keyword: enterprise risk management, capital structure, firm value, firm age, firm size

The role of managerial ownership, independent commissioners, and corporate social responsibility, moderated by enterprise risk management, on company value in the pharmaceutical industry listed on the Indonesia Stock Exchange (IDX) from 2018 to 2022

This study aims to investigate the influence of Managerial Ownership, Independent Commissioners, and Corporate Social Responsibility, both partially and collectively, with Enterprise Risk Management moderation on Company Value. Company value is measured using Tobins'q method. The research was conducted in the Pharmaceutical Industry listed on the Indonesia Stock Exchange (IDX) for the period 2018-2022. The research method used is quantitative. The population of the study consisted of 11 companies. Samples were determined using purposive sampling technique, obtaining samples from 10 companies with 5 years of observation, resulting in 50 samples. Hypothesis testing analysis was conducted using Moderated Regression Analysis (MRA) with SPSS 25.0 software for Windows. The results of the study indicate that: 1) Managerial Ownership has a negative and non-significant partial effect on Company Value, 2) Independent Commissioners have a positive but non-significant partial effect on Company Value, 3) Corporate Social Responsibility has a positive and significant partial effect on Company Value, 4) Enterprise Risk Management moderates positively but non-significantly the effect of Managerial Ownership on Company Value, 5) Enterprise Risk Management moderates positively and significantly the effect of Independent Commissioners on Company Value, 6) Enterprise Risk Management moderates positively and significantly the effect of Corporate Social Responsibility on Company Value, 7) Managerial Ownership, Independent Commissioners, Corporate Social Responsibility together with Enterprise Risk Management moderation have a significant effect on Company Value.

NEXUS BETWEEN ENTERPRISE RISK MANAGEMENT PRACTICES AND BUSINESS PERFORMANCE METRICS: EVIDENCE FROM SELECTED PHARMACEUTICAL COMPANIES IN LAGOS STATE, NIGERIA

Enterprise risk management practices are key instrument for enhancing the business performance metrics of any business entity, especially pharmaceutical firms. This study examined the nexus between enterprise risk management techniques and business performance metrics (financial perspectives, customers’ perspectives, internal business process, and learning and growth perspectives) among selected pharmaceutical companies in Lagos State. The study adopted a cross-sectional survey design cum double sampling techniques comprising purposive and convenience. The study further employed a structured questionnaire to gather data from a sample size of one hundred and sixty-four (164) participants. For descriptive statistic, simple regression technique was adopted in the data analysis. The study revealed the positively low relationship between enterprise risk management practices and business performance metrics of selected pharmaceutical companies in Lagos State, Nigeria. The study recommended that pharmaceutical companies should develop ERM framework that would provide a systematic method for detecting, evaluating, controlling, and overseeing risks. Furthermore, it is crucial to foster a culture of risk consciousness inside these organisations, wherein senior executives exhibit their dedication to risk management as an integral aspect of the business ethos. These officials should promote cooperation and transparent communication with different departments and external stakeholders, such as regulators, customers, and suppliers, to aggressively tackle risks.

The impact of digital transformation on firm performance: a perspective from enterprise risk management

The impact of digital transformation on firm performance: a perspective from enterprise risk management

Understanding the significance of risk management in enterprise management dynamics

In the complex landscape of modern business, risk management is a critical factor in deciding whether organizations succeed or fail. This review delves into the significance of risk management in enterprise dynamics, exploring its evolution, conceptual framework and the categories of risks organizations face. The study emphasizes the importance of risk identification, assessment, response and continuous monitoring. Additionally, it categorizes enterprise risks, including financial, operational, strategic, compliance and reputational risks. This work highlights the pivotal role of risk management in strategic decision-making, stakeholder confidence, operational resilience, value creation, and innovation, as well as cost reduction. Furthermore, it investigates the emergence of Enterprise Risk Management (ERM) and its integration with management science. Empirical findings underscore the positive impact of ERM on organizational risk evaluation and management. The study concludes with thoughts on the objectives of ERM, risk assessment, group impacts, preference consistency, risk management frameworks and potential implementation obstacles that organizations may encounter. The integration of ERM with strategic management is emphasized, providing a comprehensive understanding of organizational dynamics and promoting long-term success.

THE IMPACT OF USING INTERNAL CONTROL UNDER THE ELECTRONIC OPERATING SYSTEM

Internal control tools constitute one of the modern frameworks approved by the Committee of Sponsoring Organizations (COSO). "And the one which takes into account setting the objectives first, then estimating the possibility of those objectives being exposed to threats, then internal control procedures are designed that reduce the risks, and at the same time provide reasonable guarantees for achieving the organization's objectives and introducing all modern developments into the system. The contemporary trend of internal control focuses on the integration between managing the risks to which the organization is exposed and the internal control frameworks (Enterprise Risk Management- Integrated Framework) and its abbreviation (ERM), which provides the organization Management in conditions of uncertainty related to risks and their probabilities to be able to create and preserve value. The continuous developments in internal control systems, on the one hand, and competition between economic units, on the other hand, have led to many challenges through the use of modern technology and the innovation of new methods of development, which required the development of all sub-systems of control, including internal control systems, and then review the internal control structure and the extent of its acceptance of this computer-based technology and the effectiveness of its devices in providing information that supports the system's ability to adopt it. Based on this, the research topic was divided into five sections. The first section dealt with the research methodology, the second section dealt with the theoretical framework of the internal control system, and the third section dealt with the problems and limits of using electronic computers. The fourth section was devoted to studying the impact of using computers. The electronic section focuses on the components of the internal control system, while the fifth section is dedicated to stating the most important conclusions and recommendations.

Analysis on tax management and risk control of enterprise management decision

In today's complex and changeable business environment, enterprises are faced with many business decision-making problems. As an important part of enterprise management, tax plays a key role in enterprise management decision-making. Tax management involves tax planning, tax compliance and tax risk management of enterprises, which directly affects the operating results and profits of enterprises. At the same time, risk control is a factor that can not be ignored in business decision-making, and enterprises must make a balance between risk and return. Therefore, it is of great significance to study the relationship between tax management and risk control for improving the effect of enterprise management decision.

The Practice of Enterprise Risk Management and Sustainable Performance in Jordan

The primary objective of any organization is to minimize risks and losses while optimizing values, revenues and returns. Therefore, risk management, which is often referred to as risk identification, likelihood of occurrence, and impact on the business, is essential. Recent corporate catastrophes have brought to light how inadequately corporations handle risks. In reaction to these challenges, organizations have shifted from separate and personalized procedures to a more comprehensive and integrated enterprise risk management (ERM) perspective in their risk management strategies. To address these new global sustainable challenges which include hunger, poverty, high unemployment, climate change, and related issues, businesses should place a strong priority on environmental preservation and social responsibility. Jordan is one of the countries dealing with several issues related to sustainability. The sustainable performance of Jordanian firms deserves further attention. Managers in Jordanian industrial businesses must keep a close eye on how the company's environmental environment is being improved to reduce air pollution, the usage of hazardous materials, and other difficulties. Therefore, companies in Jordan must adopt strategies that will allow them to face this issue to improve their social, environmental, and economic performance. Jordan's manufacturing and service industries should be at the forefront of a comprehensive approach to risk management and board monitoring, given the growing concerns regarding the environment, society, and economy. Since ERM is a relatively new concept, its implementation in Jordanian industrial and service companies is still in its early stages. Moreover, there is a lack of comprehensive research regarding the ERM in Jordan.