Causes and effects of enterprise risk management implementation

Introduction/background: This paper presents a detailed review of causes and effects of the Enterprise risk management (ERM) implementation, including results of the author’s own survey research. Aim of the paper: The purpose of the paper is to analyse the benefits of ERM implementation while taking into account the importance of the incentives that motivate the decision to implement ERM within enterprises. Materials and methods: On the basis of a detailed literature review and taking the results of author’s own survey research into account, an analysis of the causes and effects of ERM implementation is presented. Particular attention is paid to cases where enterprises implement ERM mainly due to stakeholder expectations. Results and conclusions: The described benefits related to the use of ERM are an important reason for the implementation of these systems in enterprises; the benefits exceed the financial costs related to the implementation and use of a risk management system. However, in many cases, the decision to implement ERM is also influenced by external factors. The influence of the organisation's environment on the decision to implement ERM is a positive phenomenon, but the willingness to meet stakeholder requirements should not be the only motivation for implementing ERM. In order to implement an effective risk management system, enterprises should implement such systems deliberately with the primary aim of achieving actual benefits, not just meeting the expectations of those within its environment.