ResearchPod Summary
This paper investigates the organizational dynamics of Enterprise Risk Management (ERM) by examining how it is implemented and translated within three non-financial companies over a seven-year period (2002–2008). While ERM is often promoted as a universal, holistic framework for managing uncertainty, the authors find that its actual practice is highly variable. Rather than a uniform adoption of COSO-style guidelines, ERM is shaped by the specific organizational setting, pre-existing control practices, and the professional roles of those tasked with its implementation.
The study uses an institutional perspective to analyze how ERM interacts with existing organizational logics. The authors identify three key elements that drive this process: risk rationalities (the discursive frameworks used to conceptualize uncertainty), uncertainty experts (the professionals, such as CROs or internal auditors, who manage the process), and technologies (the specific tools and procedures used to identify and evaluate risk).
When ERM enters an organization, it encounters pre-existing systems—such as IT security or operational budgeting—that already manage uncertainty. The authors observe a continuum of outcomes:
This research highlights that the "success" of ERM is not determined by the adoption of a specific framework, but by how it is translated into the daily mindset of managers. The study demonstrates that when ERM is linked to performance metrics and supported by interactive social processes, it can become a powerful tool for navigating uncertainty. Conversely, when it is relegated to a peripheral compliance function, it fails to provide meaningful strategic value. These findings are critical for researchers and practitioners who seek to understand why ERM initiatives often struggle to move beyond formal, superficial implementation.
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