Paper Title
Implementation of Enterprise Risk Management in A New Era
Abstract
We are living in an era, where the time has been measured in minutes, instead of days and weeks as we had before. These phenomena came from the big quantity of innovations, we have faced and as consequence the life cycle of these innovations has been lower and lower. The globalization of the trade is the trigger for innovations in our days and the environment of enterprises are much more complex than before. One of the aspects of this complexity is the high degree of uncertainty present on all organizational levels of the firm. These facts induce companies to be exposed for a bigger quantity of risks and as consequence it becomes important for companies have a holistic vision of the risks which they are facing and the need to integrate risk management into their overall and operational strategies. However, it can be seen that there is no integrative tool that allows them to take into account the different dimensions of risk and to mitigate their effects on the company profitability. This is a major issue for companies, especially those operating in several geographically dispersed sectors with different risk environments. ERM is the risk management approach intended to provide a holistic vision of the risks exposition, allowing companies to be effective in evaluating, embracing, and managing these risks. ERM have been embraced by a number of large and medium-sized organizations worldwide. However, many of those companies, while they still believe in the concept of ERM, are frustrated by implementation issues that have impeded the expected benefits of ERM. This paper aims to develop a theoretical framework that identifies social and technical factors that are critical to achieving successful ERM implementation, specifically from the perspective of ERM as a complex innovation process. More deeply, this research addresses the significant question: What factors are critical to achieving successful ERM implementation? Our conceptualization of ERM implementation is based on three theoretical perspectives: the socio technical, the mutual adaptation and the dynamic capability perspective to frame our theoretical foundation. Yet, theories of process-based innovation suggest that an array factors combine together in influencing the extent to which complex business processes such as Enterprise Risks Management are successfully implemented. The findings bring light on the role of particular socio-technical variables that influence the successful implementation of ERM and extend our understanding of ERM beyond its current narrow financial view, and related its implementation more closely to the challenges of management practice.
Keywords - Enterprise Risk management, Innovation Implementation, Sociotechnical Perspectives, Dynamic Capabilities, Mutual Adaptation.