Journal of Korean Society of Industrial and Systems Engineering (산업경영시스템학회지)

Society of Korea Industrial and System Engineering (한국산업경영시스템학회)
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Analysis of the Impact of Enterprise Risk Management (ERM) on the Project Success through PRM Process: Focused on the Overseas Construction Projects

전사적 리스크 관리(ERM)가 프로젝트 리스크 관리(PRM) 향상을 통해 프로젝트 성과에 미치는 영향 분석: 해외 건설사업을 중심으로

  • Received : 2024.06.03
  • Accepted : 2024.06.17
  • Published : 2024.06.30
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Abstract

As the complexity and uncertainty of international construction projects increase, the importance of risk management capabilities in the construction industry has become more pronounced. Accordingly, Enterprise Risk Management (ERM) has become a widely adopted approach among organizations as a new way for more effective risk management. Despite its growing application, research related to ERM is still in its infancy, and most of the existing studies have been limited to financial industries. Therefore, this study aims to empirically examine the influence of ERM's core elements on project risk management (PRM) and project performance within construction firms. Our findings indicate that the key ERM components-organization, policy, and culture-significantly enhance PRM processes, underscoring their critical role and importance. Additionally, effective PRM positively affects project outcomes, highlighting its significance for construction companies engaged in international projects. While ERM does not directly impact project performance, it indirectly improves outcomes through enhanced PRM capabilities. It suggests that ERM will contribute to the firm's performance by improving the firm's PRM capability through policies and a risk-focused culture corresponding to the adopted ERM organization and system..

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Acknowledgement

This work was supported by the research fund of Hanyang University(HY-202300000003547).

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