Adoption of Enterprise Risk Management Practices in Organization: A Review

Abstract

Risk Management is a process that analyzes uncertainties faced by organization and assigns the effective management for treating such exposure. The aim of this paper is to review current literatures concerning to the adoption of Enterprise Risk Management (ERM) as well as its determinant factors that influence the adoption in organization and the benefit and impact to business performance while managing risks to survive in this competitive world. A thorough review from previous studies was gathered. The review is focused on the impacts, the implementations and the encouraged indicators to the adoption of ERM system in the organization. This study concludes that the ERM practices can be seen as sparse due to the lack of knowledge on this matter among entities in organization. However, certain company already identified the determinant factors to adopt ERM and believe that the implementation would be a part of steps toward the realization of company’s goals and finally achieve the sustainable rewards. The finding of this paper is a proposed conceptual model which is consist of two elements of ERM namely, the driver to ERM adoption in organization and its impact on company’s performance.