Role Of Enterprise Risk Management Research Articles

Moderating role of enterprise risk management in the relationship between sustainability performance and a firm’s competitive advantage

The emergence of sustainable business practices has garnered interest among stakeholders. However, the question of whether sustainability performance provides companies with a competitive advantage is still being debated in the literature. This paper aims to examine the influence of sustainability performance – namely economic sustainability performance and environmental, social, governance (ESG) – on competitive advantage, with the effectiveness of enterprise risk management (ERM) as the moderating variable. This paper used 202 firm-year observations during 2015–2022 from non-financial sector companies listed on the Indonesia Stock Exchange. To test the hypotheses, panel data regression with a one-year time-lag analysis is conducted. The findings show that economic sustainability performance has no relationship with competitive advantage, while ESG has a positive effect. Furthermore, ERM effectiveness strengthens the effect of economic sustainability and ESG on competitive advantage. Further investigation used a two-year time-lag analysis for a long-term perspective. The analysis shows that economic sustainability performance and ESG have a positive impact on competitive advantage. In contrast, ERM effectiveness has no effect on the relationship between economic sustainability performance and competitive advantage. Moreover, additional analysis incorporates the effect of COVID-19 into the main model and shows that the pandemic did not affect competitive advantage; this is consistent with the main results. The findings encourage companies to improve their risk management and sustainability initiatives. The government may also take it into account when developing rules that promote the implementation of sustainable development. AcknowledgmentThis research was supported by the Ministry of Education, Culture, Research, and Technology of the Republic of Indonesia through the Center for Higher Education Fund (BPPT) and Indonesia Endowment Funds for Education (LPDP) for providing the Indonesian Education Scholarship (BPI-Beasiswa Pendidikan Indonesia).

The role of enterprise risk management in enabling organisational resilience: a case study of the Swedish mining industry

AbstractThis study empirically examines the role of enterprise risk management (ERM) in developing and maintaining resilience resources and capabilities that are necessary for an organisation’s strategic transformation towards sustainability. Data was collected through 25 semi-structured interviews, one non-participant observation, and secondary sources in the context of a Swedish mining company undergoing a high-risk strategic transformation towards full decarbonisation. Following the temporal bracketing approach (Langley in Academy of Management Review 24:691–70, 1999) and employing thematic analysis (Gioia in Organizational Research Methods 16:15–31), the data was structured and analysed according to three phases from 2012 to 2023. The findings show: first, different ERM practices, such as risk governance frameworks, risk culture, risk artefacts, and risk awareness, influence resilience resources and capabilities. Second, the evolution of risk management practices from traditional risk management to ERM is an ongoing developmental process to ensure that risk management continues to be aligned with the company’s strategy. Third, in tandem with strategic changes, resilience in terms of resources and capabilities emerges over time and develops through a series of events, gradually enhancing the company’s ability to manage risks and uncertainties associated with multidimensional sustainability challenges. These results contribute to the ERM literature that follows the dynamic capability approach and also focuses on the relationship between ERM and strategy by adding more detailed empirical evidence from the risk management literature in relation to resilience resources and capabilities. Additionally, the results contribute to the resilience literature that follows a developmental perspective.

Enhancing firm value: The role of enterprise risk management, intellectual capital, and corporate social responsibility

Enhancing firm value: The role of enterprise risk management, intellectual capital, and corporate social responsibility

Navigating global markets: The role of enterprise risk management and human resource management in SME international expansions

Research background: Since SMEs lack the financial and human resources required for internationalization, they face more obstacles than large firms. In this regard, their internal/controllable risk management capabilities based on the Resource-based View (RBV) theory might help them overcome internationalization barriers. Purpose of the article: This study aims to investigate the positive impact of internal/controllable risk management capabilities, such as strategic, operational, and personnel risk capabilities, on the export intention of SMEs. Moreover, this paper finds out whether the impacts of these risk management capabilities on export intention differ depending on the countries where SMEs operate. Methods: This research uses a random sampling method and shares an online questionnaire with survey respondents. It includes research samples from Czech, Slovakian, and Hungarian SMEs. The researchers analyze the effects of enterprise risk management capabilities on export by performing Binary Logistic Regression analyses. Findings & value added: While personnel risk management does not affect the export intention of SMEs, strategic risk management and operational risk management positively affect the export intention of SMEs, depending on the countries where SMEs are located. For this reason, there are international differences in the impacts of strategic and operational risk management capabilities on the export intention of SMEs. This paper provides a more holistic approach to managing internal/controllable risk factors and investigates this construct’s effect on internationalization. A country comparison in this specific effect has been only performed in this study. Moreover, the construct of managing internal/controllable risk factors is also linked with the dynamic capability of RBV only in this paper.

Impact of Financial Literacy on Firm Performance of SMEs in Sri Lanka: Mediating Role of Enterprise Risk Management

Small and medium enterprises (SMEs) can be recognized as a main role player in a country’s economy. This study mainly focuses on identifying a few factors that could lead to identifying a viable business strategy for SMEs in Colombo District, Sri Lanka. As a developing country, Sri Lanka needs to have lucrative business potential and sustainability of the business. It has been identified that financial literacy (FL) plays a crucial role in enhancing business performance, and enterprise risk management (ERM) is considered to be another important factor in the betterment of business performance. Therefore, in this deep study, it was mainly hypothesized that higher FL leads to the high performance of SMEs in Sri Lanka. Same time, ERM was formed to mediate the relationship between FL and SME performance. FL found three constructs which are Financial Knowledge (FK), Financial Behavior (FB) and Financial Attitude (FA), and ERM following the same decomposed into three constructs, namely Identification of Risk (IR), Facing Uncertainties (FU) and Risk Reaction (RR). Results confirmed that there is a positive and direct relationship between FL and SME performance and ERM has a mediate relationship between FL and SME performance.

The Role of Enterprise Risk Management in enhancing Firm Performance: does Strategic Renewal really matters?

This study aims to measure the impact of enterprise risk management (ERM) to improve firm performance in manufacturing companies in Indonesia. This study also examines the role of strategic renewal in ERM's influence on firm performance. The AMOS application's SEM analysis technique was used to evaluate the research model used in this study. Data from 207 different firms in Indonesia's manufacturing sector were obtained. The originality of this research is adding strategic renewal as a mediating variable that has not been widely used in previous research in analysing the relationship between the ERM and firm performance. The study's results show empirical evidence that internal resources in the form of ERM significantly affect firm performance. Additionally, according to the research findings, strategic renewal is the best way for businesses to deal with environmental uncertainty and dynamic changes. Companies are expected to have adequate resources, but they also need to make changes and implement strategies to turn those resources into better performance.

The Role Of Enterprise Risk Management And Digital Transformation On Sustainable Banking In Indonesia

This research investigates the role of Enterprise Risk Management and Digital Transformation in banking sustainability in Indonesia. Banking demands good performance from its owners and shareholders to carry out operational activities on an ongoing basis. In this study, the target population is the Indonesian Banking Sector, which has a digital banking transformation experience. The data was collected by administering questionnaires to the Director/Manager/Division Head/Branch Head of the company. Data were analyzed using descriptive and verification analysis using Partial Least Square (PLS) Structural Equation Modeling (SEM). Additional moderation analysis was also employed to examine the element of mediation. The findings reveal that Enterprises Risk Management and Digital Transformation Banking significantly and positively influence banking sustainability in Indonesia. The Moderation Variable used is that knowledge management cannot improve the relationship between Enterprises Risk Management and Digital Transformation Banking on Banking Sustainability in Indonesia. The issue of sustainability in the financial services involve many aspects; therefore, the key to the sustainability strategy is the awareness from the banking sector of relevant impacts and robust risk management. Technological developments in the banking sector have significant implications for banking which have an impact on corporate survival.

Sustainability reporting as strategic crisis response mechanism: An innovative approach

Most companies have been severely affected by various business risks due to the COVID-19 outbreak. Their limited resources during this adverse period have forced them to be more concerned with their companies’ survival than making sustainability initiatives that incur extra costs. Consequently, companies have faced a challenge in reporting imposed-sustainability statements. According to Wenzel et al. (2020) and Zharfpeykan and Ng (2021), companies can innovatively improvise the regular sustainability reporting to become a strategic tool to portray to stakeholders how companies respond to and address sustainable matters during a crisis period. Thus, this paper presents the concept of sustainability reporting as a strategic crisis response mechanism and proposes a model and matrix that maps the stakeholder engagement disclosure strategy with quality disclosure. Moreover, the paper discusses how this reporting can be influenced by internal governance mechanisms. The paper further suggests the moderating role of enterprise risk management (ERM) in this relationship. This concept can potentially guide managerial decisions on ideal sustainability practices that may not impair companies’ capacity to survive during future crises. It may act as an effective instrument in meeting stakeholders’ expectations of companies to perform their roles as good corporate citizens during a crisis

Literature Review on Building Cyber Resilience Capabilities to Counter Future Cyber Threats: The Role of Enterprise Risk Management (ERM) and Business Continuity (BC)

Literature Review on Building Cyber Resilience Capabilities to Counter Future Cyber Threats: The Role of Enterprise Risk Management (ERM) and Business Continuity (BC)

The Effect of Corporate Governance on Corporate Value: The Role of Enterprise Risk Management

In order to determine the effect of corporate governance on the corporate value, then moderating the relationship with enterprise risk management (ERM) is the aim of this study. This study collected secondary data from financial statements and annual reports for the 2016-2020 period of 87 companies as the sample and used panel regression as the analysis method. The results showed a significant positive effect of the audit committee on corporate value, while an independent commissioner had a significant negative effect. This study also shows no significant effect on the corporate value of managerial ownership, institutional ownership, board size, and board director. However, ERM moderated the relationship between the audit committee and corporate value and between managerial ownership and corporate value.
 Keyword: Corporate governance, corporate value, ERM.

The Effect of Green Innovation on Organizational Performance: Role of Enterprise Risk Management As A Mediation Variable

The purpose of this study was to examine and determine the effect Enterprise Risk Management (ERM) on Organizational Performance at PT Armada in 2022. Testing the effect of implementing ERM and Green Innovation, as well as the mediation function of Enterprize Risk Management. towards Green Innovation towards the company's organizational performance. The population in this study were all employees at PT Armada. Data were collected by questionnaires according to the list of questions and study documentation. This study uses PLS-SEM with the help of data processing using the SmartPLS 3 application software. The results show that the implementation of Enterprize Risk Management (ERM) affects Organizational Performance, Green innovation affects ERM, green innovation does not affect organizational performance, green innovation through enterprize risk management mediation affects organizational performance indirectly.

The Role of Enterprise Risk Management on SMEs Performance: A Review Paper

SMEs have proved their ability to contribute to economic growth and become Malaysia's most prominent business economy. As a result, many Malaysians, particularly the younger generation, are involved in this field because they believe that entrepreneurship will help them improve their living standards and income level. Furthermore, government support is one of the reasons why young Malaysians want to be entrepreneurs. However, many Malaysian entrepreneurs have struggled to survive in the first five years of business operation due to the risks and challenges. As a result, using comprehensive literature review, this paper aim to review some of the previous papers on the importance of risk management in SMEs and find gaps from these papers. This review paper can help grasp new research opportunities that can be conducted in the future. Thus, this paper suggested implementing an enterprise risk management index to help entrepreneurs measure their readiness before entering the entrepreneur field.

Exploring Corporate Crisis Communication after COVID-19: The Role of Enterprise Risk Management in (Re)Building Trust

Exploring Corporate Crisis Communication after COVID-19: The Role of Enterprise Risk Management in (Re)Building Trust

Does internal control process and firm characteristics improve firm value? An empirical analysis in the manufacturing sector.

The purpose of this research is to investigate the role of enterprise risk management (ERM), Big4 auditors and firm characteristics on firm value. This population study was conducted in the Indian manufacturing sector. Annual panel data for 11 years (2007–2017) was collected from 60 firms on the National Stock Exchange (NSE). Empirical findings prove that there is variation in Tobin’s Q but no difference in return on assets (ROA) and return on equity (ROE) among firms that have implemented ERM and included Big4 audit firms. The study documents that Q was influenced by the implementation of ERM, liquidity, firm age and firm size. Findings reveal that ERM, firm size, leverage, firm age, liquidity and firm complexity impacted ROA. The study outcome also shows ROE was affected by leverage, firm size, liquidity and firm complexity. This study is a valuable addition to the existing studies on the Indian manufacturing sector and has contributed incredible insights to the empirical literature on firm value from the multidimensional outlook of the purchasers, management, and investors. The findings have several implications for investors, managers and researchers.

The Role of Enterprise Risk Management in Business Continuity and Resiliency in the Post-COVID-19 Period

The Role of Enterprise Risk Management in Business Continuity and Resiliency in the Post-COVID-19 Period

BEST PRACTICE OF ENTERPRISE RISK MANAGEMENT: THE IMPACT ON RURALS’ BANK PERFORMANCE

This research aims to examine the role of enterprise risk management (ERM) on rural banks' performance. ERM is measured by the structure, governance, and process in the risk management process. The bank performance as the dependent variable use measurement both financial and non-financial. The study sample is the rural banks in Riau Island provinces, consisting of 63 questionnaires as the data for further analysis. The result showed that ERM enhances the rural banks' performance, both financial and non-financial. It showed that the practice of ERM does well when the rural bank is well-established.

The role of enterprise risk management on disclosure transparency in the international financial reporting standards period

This research empirically investigates the role of the enterprise risk management system implementation level in capturing firm managerial incentives. The system plays an important role in understanding the association between international financial reporting standards and the capital market. Listed firms in the Australian market were used for the period 2000-2010 for this purpose. The study results imply that implementing higher levels of ERM by Australian firms during the mandatory IFRS adoption period does not capture firm incentives in IFRS period. Consequently, these results suggest that the implementation of ERM by Australian firms does not reduce the contractual costs between investors and management, whilst adopting IFRS does. Future research may use other techniques and/or strategies other than ERM, to capture the firm incentives, and as a result, may have economic consequences.

Retail 4.0 adoption and firm performance among Malaysian retailers: the role of enterprise risk management as moderator

PurposeThe purpose of this study was to ascertain the determinants of firm performance for Malaysian retailers.Design/methodology/approachAn online survey was conducted to collect responses from members of the Malaysian Retailers' Chain Association. A total of 126 responses were obtained. Data analysis was done by using the PLS-SEM method.FindingsThe results of the study indicate that Retail 4.0 adoption is able to improve retailers' performance as-a-whole by improving the four perspectives of firm performance as given in the Balanced Scorecard, i.e. the finance perspective, the customer perspective, the internal processes' perspective and also learning and growth perspective. Further, enterprise risk management was found to have a positive moderating effect on retailers' performance as-a-whole and also on the finance and customer perspectives of performance.Research limitations/implicationsThe study was conducted only in Malaysia and so, it might be geographically limited. Besides, it is cross-sectional in nature and therefore, the impact might be different if the study had been conducted over a longer period.Practical implicationsThis study provides a useful framework for retailers who are seeking to improve firm performance.Originality/valueThis is one of the first studies to show the impact of Retail 4.0 adoption on firm performance. Besides, this is also the first time, enterprise risk management has been introduced as a positive moderator on the impact of technology adoption on retailers' performance.

The Role of Enterprise Risk Management as a Moderation in Increasing Company Value

We try to explain the role of enterprise risk management as a moderation in increasing firm value (empirical study on manufacturing companies that have been listed on the Indonesia Stock Exchange (IDX) for the period of 2016-2018. in this study are manufacturing companies listed on the Indonesia Stock Exchange (BEI) during the period 2016 to 2018. Samples using the purposive sampling method, there are 14 companies as samples.The analytical tool used is multiple linear regression analysis with Moderated Regression Analysis (MRA) which aims to analyze the influence of corporate social responsibility (CSR), managerial ownership, independent commissioners and audit committees on firm value with enterprise risk management as a moderating variable using SPSS v.22 software The results of the study show evidence that: (1) Corporate social responsibility sponsibility has a positive and significant effect on firm value. (2) Managerial ownership has a positive and significant effect on firm value. (3) Independent commissioners have a positive and significant effect on company value. (4) The audit committee has a positive and significant effect on the value of the company. (5) Enterprise risk management is able to moderate the influence of corporate social responsibility on corporate value. (6) Enterprise risk management is able to moderate the influence of managerial ownership on firm value. (7) Enterprise risk management is able to moderate the influence of independent commissioners on company value. (8) Enterprise risk management is able to moderate the influence of the audit committee on the company's value.

Board Gender Diversity and Corporate Sustainability Performance: Mediating Role of Enterprise Risk Management

Board Gender Diversity and Corporate Sustainability Performance: Mediating Role of Enterprise Risk Management