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Benefits of Enterprise Risk Management: A Systematic Review of Literature

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  • Ch V V S N V Prasad

    (BITS Pilani K K Birla Campus, Zuarinagar, 403726, Goa, India Author-2-Name: Sankalp Naik Author-2-Workplace-Name: BITS Pilani K K Birla Campus, Zuarinagar, 403726, Goa, India Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)

Abstract

Objective - In an enhanced climate of risk complexities, the firm's stakeholders desire a risk management framework that promises the benefits of efficiencies, transparencies, and solutions for interrelated risks. Enterprise risk management (ERM) is widely seen as a suitable instrument to address these issues. However, not all are convinced of ERM's benefits. This necessitates a review of extant literature and collating it to generate interrelated insights. This paper reviews articles on ERM from the management and finance domain and catalogs the benefits of ERM. Methodology/Technique: � This paper reviews 129 articles addressing ERM benefits. It examines the academic disciplines of journals publishing ERM studies by looking into their H Indices, SJR scores, and ABDC rankings to assess ERM's impact and acceptability among scholars. The research articles are analyzed for their subject domains, geographic scope, and methodology used in exploring the relationship between ERM adoption and its benefits to the firm. Collating and reviewing these articles enables the mitigation of data gaps. These studies were primarily from accounting, finance, management, corporate governance, and strategy domains. Findings � Improved cost-effectiveness, earnings stability, increased profitability, improved decision making, better risk communication, competitive advantage, better resource allocation, enhanced firm value, and performance are the key benefits of ERM adoption identified in this study. A knowledge gap is presented around assessing ERM benefits and extending ERM research scope to developing countries like India. Novelty � The study catalogs the benefits of ERM and makes a strong case for ERM adoption among firms. Type of Paper - Review

Suggested Citation

  • Ch V V S N V Prasad, 2021. "Benefits of Enterprise Risk Management: A Systematic Review of Literature," GATR Journals jfbr181, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:jfbr181
    DOI: https://doi.org/10.35609/jfbr.2021.5.4(3)
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    References listed on IDEAS

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    1. Michael McShane, 2018. "Enterprise risk management: history and a design science proposal," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 19(2), pages 137-153, March.
    2. Power, Michael, 2009. "The risk management of nothing," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 849-855, August.
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    More about this item

    Keywords

    Enterprise risk management (ERM); firm value; firm performance; ERM benefits; Covid19;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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