A model for operationalizing ERM in project-based operations through dynamic capabilities
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 27 May 2014
Abstract
Purpose
This paper aims to propose a model, to operationalize the idea of enterprise risk management (ERM), relying on the concept of capabilities. The proposed model, labelled “Spring model”, is specifically tailored to the characteristics of project-based organisations, where risk is to be managed transversally to different organizational levels (enterprise, project portfolio, functions, projects).
Design/methodology/approach
A case study methodology is used to exemplify the functioning of the proposed model and display the suitability of the concept of capabilities, as means whereby companies can manage their risk. Data were collected from different sources over a time frame of three years: semi-structured interviews, official documents and presentations, archives, direct observation and internal document usually not available to the public.
Findings
The “Spring model” explains how risk can impact different organizational levels (enterprise, project portfolio, functions, projects), and how risk can be effectively managed, at different organizational levels, through the organization's capabilities.
Practical implications
The paper gives concrete guidance on the operational elements that project-based organisations should consider for managing risks in a comprehensive and integrated way and discusses potential analysis/insights that could be derived embracing the capability perspective. The empirical testing, performed in a leading oil and gas company, provides an example of its functioning.
Originality/value
The paper represents an attempt to apply ERM concepts and tools to operations, making a connection between research in corporate governance and finance, where the ERM concept originated, and research in project management, where attention of researchers tended to concentrate on specific types of risk management practices.
Keywords
Citation
Arena, M., Azzone, G., Cagno, E., Silvestri, A. and Trucco, P. (2014), "A model for operationalizing ERM in project-based operations through dynamic capabilities", International Journal of Energy Sector Management, Vol. 8 No. 2, pp. 178-197. https://doi.org/10.1108/IJESM-09-2012-0008
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited