Implementation of Enterprise Risk Management (ERM) Framework in Enhancing Business Performances in Oil and Gas Sector

Abstract

This study empirically investigated the ERM Implementation model and proposed framework to identify and manage risks in Oil and Gas Sector in Malaysia. The study examined the role of ERM framework implementation in improving business performance by utilizing Economic Value Added as a measurement tool. The study also provides insights to the Oil and Gas Sector to gain higher profit returns, reduce cost of capital, and improve shareholders value. Moreover, it contributes significantly in the field of Enterprise risk management in Malaysia. The identification and management of risk is significant to organizations in managing risks efficiently. Expectations of stakeholders of the organization are high from executives and board of directors in managing the risk effectively. Linear regression analysis is utilized in analyzing the data obtained from the data collection performed for this paper. Purposive sampling has been employed in order to select the firms that are operating in Malaysian oil and gas sector. Primary data has been utilized to collect data with the help of structured questions and interview techniques that involve semi structured questions. The results of the regression analysis conducted for in this study suggested that a significant and positive relationship between Enterprise Risk Management with operational risk; market risk; political risk; health, safety and environmental risk; and, also business performance.

Enterprise Risk Management Practices and Firm Performance, the Mediating Role of Competitive Advantage and the Moderating Role of Financial Literacy

“…It facilitates a firm to develop a unique strategy to minimize the potential losses and open a door for the exploitation of new opportunities (Radner and Shepp 1996). ERM helps top management to manage different types of risk effectively (Annamalah et al 2018). Effective ERM practices help to reply to unexpected threats, to ensure flexibility and to take the benefits of opportunities which in turn facilitate firms to gain competitive advantage (Armeanu et al 2017).…”

Risk Mitigation Using Integration Enterprise Risk Management and Balanced Scorecard model : A Case Study In A Consulting Services Company in Indonesia

“…The relationship between ERM and company performance is introduce (Soltanizadeh et al, 2016); ; (Ali et al, 2019); (Shad et al, 2019) and (Nasr et al, 2019). Results study of (Annamalah et al, 2018) is a significant and positive relationship between ERM and business performance. ERM meets the needs of stakeholders to realize broader management in ensuring a well-managed organization (Rasid et al, 2017).…”

“…The COSO ERM has become a standard and de facto risk management framework for large companies (Weeserik & Spruit, 2018). The COSO ERM consists of eight components, namely the determination of the risk context (objectives), risk assessment, event identification, risk assessment, risk response, control activities, information and communication, and monitoring, meanwhile the traditional risk management system consists of five components, namely identification, analysis, evaluating, managing and monitoring risk (Annamalah et al, 2018). According to (Frigo, 2009) three ERM COSO elements relate to the strategy ERM deals directly with the determination of the strategy and becomes effective if embedded and connected directly with the development of the company strategy, ERM design to identify events that may affect the company strategy performance; the objective of ERM is to assure that the company achieves the strategic objective.…”

The emerging importance of risk management and enterprise risk management strategies in the Indian hospitality industry

“…Research in the last few years has emphasized the importance of ERM practices among firms. ERM helps top management to manage different types of risk effectively (Annamalah et al , 2018). Armeanu et al (2017) argue that effective ERM practices help with responses to unexpected threats, to ensure flexibility and make the most of benefits arising which in turn, facilitates competitive advantage.…”