Enterprise-wide risk management and organizational fit: a comparative study

Abstract

Purpose – The purpose of this paper is to analyse enterprise risk management (ERM), its organizational translation and fit, investigating in particular its impact on a major control process: budgeting. Design/methodology/approach – The research was carried out with a multiple case study approach including three companies in the UK. This approach was chosen to gain a deeper understanding of the nature of ERM within each of the organizations and the factors shaping its achievements. Findings – Three main issues emerged. The first is related specifically to ERM implementations and its variety in practice. Second, ERM champions emerged as central in shaping the managerial usefulness of ERM. Third, the cases showed diversity of practice in term of integration with budgeting which range from a voluntary full integration to an voluntary separation. Practical implications – The cases analysed highlighted that the integration between risk and other control processes is a challenge but also a strategic choice. Although conceding that ERM implementation is not linear, companies should reflect upon the type of relations they would like to have between different processes of control. Originality/value – The results of the paper explored ERM organizational fit, evidencing variety in practice and theoretically discussing how this diversity is linked to organizational and technical issues.