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Modeling firm resources –enterprise risk management relationships: An empirical finding using PLS-SEM

Noraznira Abd Razak (Faculty of Business Management, University Teknologi MARA, Malacca, Malaysia)
Zuriah Ab Rahman (Arshad Ayub Graduate Business School (AAGBS), University Teknologi MARA, Malacca, Malaysia)
Halimahton Borhan (Faculty of Business Management, University Teknologi MARA, Malacca, Malaysia)

World Journal of Entrepreneurship, Management and Sustainable Development

ISSN: 2042-5961

Article publication date: 14 March 2016

2369

Abstract

Purpose

The purpose of this paper is to focus, explore, and provide an in-depth analysis of the relationship between company resources and the process of enterprise risk management (ERM) in order to strengthen corporate structures against emerging uncertainties.

Design/methodology/approach

This paper proposes a strategic risk management framework for the development and sustainability of corporate performance by focussing on the dimension of firm resources extracted from the resources-based theory. This paper focussed on using Malaysia listed firms under Malaysian Bourse as sample frame using the random sampling technique whereby questionnaire were distributed among head of risk management department. Of the 600 questionnaires distributed, 223 were returned completed.

Findings

The survey results indicate that intangible resources play a significant roles in resources – performance relationship while the other two main dimension that are tangible resources and capabilities have shown contradictory results.

Research limitations/implications

This paper only focussed on using Malaysia listed firms under Malaysian Bourse as sample frame.

Practical implications

The management of risk is a dynamic phenomenon and the change of management that parallel with its evolution demand a revisiting and revamping over and over again promptly. In order to adapt and survive the volatile environment time and again, the effort to ensure long-term sustainability has to be made by the firm as success and failure can quickly replace one another in a relatively short period. The results highlight the various insight that might be helpful to managers in terms of managing the performance of the firm by concentrating entirely on its risk management and resources managements process.

Originality/value

Overall it was shown that only certain dimension of resources within the firm has strong relationship with the performance variation. As such, the company has to ensure that deployment of resources has to be optimized accordingly by focussing on the types of resources that matters so that possibility of improving the outcome of the firm in the volatile global environment can be realized.

Keywords

Acknowledgements

This research was part of a research project fully funded by Fundamental Research Grant Scheme (FRGS) from Ministry of Education, Malaysia.

Citation

Abd Razak, N., Ab Rahman, Z. and Borhan, H. (2016), "Modeling firm resources –enterprise risk management relationships: An empirical finding using PLS-SEM", World Journal of Entrepreneurship, Management and Sustainable Development, Vol. 12 No. 1, pp. 35-49. https://doi.org/10.1108/WJEMSD-05-2015-0026

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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