The integration between enterprise risk management and performance management system: managerial analysis and conceptual model to support strategic decision-making process

Hristov, Ivo; Camilli, Riccardo; Chirico, Antonio; Mechelli, Alessandro

doi:10.1080/09537287.2022.2140086

Cited by 10 publications

(10 citation statements)

References 70 publications

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“…The construction and structuring of the instrument took into account previous studies (Hristov et al 2022a(Hristov et al , 2022bEvans III et al 2015;Block 1997;Danielson and Scott 2006;Graham and Harvey 2001;Lazaridis 2004), duly adapted to the Portuguese context. Although many authors analyze SMEs, the Portuguese situation was taken into account as it presents different characteristics from other studies, being based on small family companies, which may interfere with knowledge and application of capital budgeting practices.…”

Section: Methodsmentioning

confidence: 99%

Capital Budgeting Practices: A Survey of Two Industries

Mota

Moreira

2023

JRFM

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This research examines the capital budgeting practices used by small and medium-sized firms (SMEs) in two Portuguese industries, footwear and metalworking, aiming at answering the following research questions: How much knowledge do managers have about capital budgeting practices? What are the most used practices? How much importance do they attribute to applying them? The research was conducted through an online survey with a response rate of 14.9%. The results document that most companies in both industries are familiar with capital budgeting practices, despite differences between the two. The footwear industry recognizes the importance of these indicators but makes little use of them, and many companies prefer using payback period (PBP). The metalworking industry, on the other hand, makes greater use of capital budgeting practices, with net present value being the favored indicator and PBP being used as supplementary. This study contributes to the capital budgeting literature in two ways: first, by focusing on SMEs instead of only large firms, and second, by exploring data from two industries rather than multiple, heterogeneous industries.

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Section: Methodsmentioning

confidence: 99%

Capital Budgeting Practices: A Survey of Two Industries

Mota

Moreira

2023

JRFM

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“…ERM identifies, evaluates, and reduces risks, enhancing organizations' ability to handle uncertainty and seize opportunities. This synergy optimizes resource allocation, informs choices, and creates a resilient work environment (Hristov et al 2022). This cooperative interaction promotes sustainability and adaptation, enabling businesses to generate value, cultivate stakeholder trust, and succeed in today's fast-paced business environment.…”

Section: Erm and Strategic Managementmentioning

confidence: 96%

“…The article discusses the challenges and solutions of implementing ERM, emphasizing the importance of clear roles, open communication and a robust risk culture for long-term success. (Hristov et al 2022) This article interviews 75 managers to identify risk dimensions and drivers in the supply chain, proposing a conceptual model that combines ERM and Performance Management System.…”

Section: (Olaniyi Et Al 2023)mentioning

confidence: 99%

Understanding the significance of risk management in enterprise management dynamics

Shrivastava,

Balasubramanian,

Katyal

et al. 2024

Multidiscip. Rev.

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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.

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“…Other sources of value creation through effective risk management include lowering a firm's overall cost of capital (Samanta et al 2004;Hoyt and Liebenberg 2011;Shad et al 2022), signaling the firm's overall risk profile (Hoyt and Liebenberg 2011), optimizing executive compensation (Grace et al 2014), enhancing risk diversification, benefiting from natural hedges, and improving governance of the enterprise's risk (Nocco and Stulz 2006;McShane et al 2011;Hoyt and Liebenberg 2011;Beasley et al 2005), among others. More recently, Hristov et al (2022) used semi-structured interviews with a total of 75 senior and middle managers from 25 different Italian companies to provide an approach to integrate enterprise risk management (ERM) and a performance management system (PMS). They find that PMS processes, built on a specific set of key risk indicators (KRIs), could enable the companies to achieve economically and environmentally sound performance.…”

Section: Erm Literature Reviewmentioning

confidence: 99%

Triangulating Risk Profile and Risk Assessment: A Case Study of Implementing Enterprise Risk Management System

Jalilvand,

Moorthy

2023

JRFM

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Establishing an enterprise risk management (ERM) system is widely viewed as providing firms with the tools and processes needed to build resilience and expertise, enabling them to manage the consequences of crises that have led to the collapse of major firms across different industries globally. Intended for use in advanced accounting, auditing, and finance courses, this case study (of a true event) describes the development and implementation of an ERM system for a U.S. multinational nonprofit firm during the 2015–2021 period. The case study’s main learning objectives are several-fold. First, couched within the recent economic environment, it informs students on some of the more important academic and applied research on corporate risk management. Second, students will learn to analyze the content of a questionnaire designed to capture the integrated effects of the firm’s risk culture, risk structure, risk governance, and control for establishing its risk profile. Third, they will learn to create and apply multi-dimensional risk indices to measure and prioritize the firm’s risk exposures. Finally, the last learning outcome focuses on strategies to triangulate the firm’s overall risk profile and risk prioritization results to construct mitigation strategies that build resilience and create value through risk diversification, information signaling, the exploitation of natural hedges, and enhancing the board’s governing efficiency. The nonprofit nature of the firm in this case study introduces no methodological or conceptual constraints or limitations in applying the proposed risk management methodologies to for-profit or publicly traded firms.

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The integration between enterprise risk management and performance management system: managerial analysis and conceptual model to support strategic decision-making process

Cited by 10 publications

References 70 publications

Capital Budgeting Practices: A Survey of Two Industries

Capital Budgeting Practices: A Survey of Two Industries

Understanding the significance of risk management in enterprise management dynamics

Triangulating Risk Profile and Risk Assessment: A Case Study of Implementing Enterprise Risk Management System

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