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The Role of Enterprise Risk Management (ERM) in Supporting Strategic Decision-Making Processes in the Energy Sector
Subject area: Science,Engineering and Technology · Area of research: Risk Management
Abstract
This article explores the critical role of Enterprise Risk Management (ERM) in supporting strategic decision-making processes within the energy sector. The complexity and volatility of the global energy landscape necessitate a robust framework for managing risks, and ERM provides a holistic approach that integrates risk management with organizational strategy. This article discusses the evolution of ERM from traditional risk management practices, highlighting its key components and principles. It further examines the importance of ERM in enhancing decision-making, particularly in the context of managing uncertainties, regulatory compliance, and sustainability challenges. Case studies from the energy sector demonstrate the effectiveness of ERM tools in improving strategic outcomes and organizational resilience. The article also addresses the challenges of implementing ERM, such as cultural and organizational barriers, regulatory complexities, and market volatility. Moreover, it explores the potential of ERM to foster innovation and sustainability, especially as companies navigate the transition to renewable energy and digital transformation. The article emphasizes the need for energy companies to embrace ERM as a strategic tool that not only mitigates risks but also creates value through proactive management and long-term planning. Leadership plays a crucial role in driving ERM adoption and fostering a risk-aware culture across the organization. The article concludes by offering recommendations for enhancing ERM capabilities and highlights the continued relevance of ERM in shaping the future of energy companies in an increasingly complex and uncertain environment.
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How to cite this paper
@article{1706226,
author = {Munashe Naphtali Mupa, Florence R. Chiganze, Tapiwa I. Mpofu, Regis Mangeya, Maxwell Mubvuta},
title = {The Role of Enterprise Risk Management (ERM) in Supporting Strategic Decision-Making Processes in the Energy Sector},
journal = {Iconic Research And Engineering Journals},
year = {2024},
volume = {8},
number = {2},
pages = {826-848},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1706226.pdf},
abstract = {This article explores the critical role of Enterprise Risk Management (ERM) in supporting strategic decision-making processes within the energy sector. The complexity and volatility of the global energy landscape necessitate a robust framework for managing risks, and ERM provides a holistic approach that integrates risk management with organizational strategy. This article discusses the evolution of ERM from traditional risk management practices, highlighting its key components and principles. It further examines the importance of ERM in enhancing decision-making, particularly in the context of managing uncertainties, regulatory compliance, and sustainability challenges. Case studies from the energy sector demonstrate the effectiveness of ERM tools in improving strategic outcomes and organizational resilience. The article also addresses the challenges of implementing ERM, such as cultural and organizational barriers, regulatory complexities, and market volatility. Moreover, it explores the potential of ERM to foster innovation and sustainability, especially as companies navigate the transition to renewable energy and digital transformation. The article emphasizes the need for energy companies to embrace ERM as a strategic tool that not only mitigates risks but also creates value through proactive management and long-term planning. Leadership plays a crucial role in driving ERM adoption and fostering a risk-aware culture across the organization. The article concludes by offering recommendations for enhancing ERM capabilities and highlights the continued relevance of ERM in shaping the future of energy companies in an increasingly complex and uncertain environment.},
month = {August},
}