Risk Management Practices and Firm Performance with a Mediating Role of Business Model Innovation. Observations from Jordan

Abstract

This study focused on scrutinizing the influence of Enterprises Risk Management (ERM) on firm performance with a mediating role of Business Model Innovation (BMI). For the purpose, data from 228 Jordanian firms was collected and analyzed. The results indicated that the ERM practices have a significant influence on BMI and financial firm’s performance. The BMI significantly contributed to the financial and nonfinancial performance, whereas it displayed insignificant effects regarding environmental performance. The BMI fully mediated the relationship between ERM practices and financial performance, where a partial mediating effect was observed for the path between ERM practices and nonfinancial performance, while showed no mediating role between the ERM practices and environmental performance. Economies of countries like Jordan are hereby urged to implement the formal ERM practices and to financially educate their top management teams to apply the BMI to gain first-rate performance. This study also encourages the researchers from other countries to extend this model to their economies to unleash useful insights.

Enterprise Risk Management and Bank Performance: A Study of the Indonesian Banking Industry

“…According to Malik, Zaman, and Buckby (2020), the precise application of risk management helps the managers to capture the opportunities matching their strategic goals and identify potential risks to be evaluated through the standard process to make the correct decision. Therefore, this research supports the work of Suttipun et al (2018), Damayanti and Augustine (2019), Sleimi (2020), Olayinka et al (2017), Soliman and Adam (2017), as well as Al-Nimer et al (2021). With this positive impact of ERM on bank performance, this study suggests that banks should focus on the governance and culture supporting the attainment, the strategy and goal settings, the review of the performance-based risk, the information, communication, and report related to sustainable risk management.…”

The Moderating Role of Organizational Culture on the Relationship between Enterprise Risk Management Dimensions and Financial Performance in Manufacturing Companies: A Theoretical Framework

“…According to Bainbridge (2008), ERM is the procedure through which a company's upper management explains the company's aims and strategies in order to "create an ideal balance between growth and return targets and related risks". When properly implemented, ERM should help businesses better manage risks within an acceptable range, so boosting their productivity and financial performance (Hameed et al, 2020;Rimin et al, 2021;Kanu, 2021;Saeidi et al, 2021;Adam et al, 2021;Al-Nimer et al, 2021). Various empirical studies into the influence of ERM on company performance have been conducted on the back of the theoretical expectation that doing so will assist organisations in improving their performance.…”

“…As a result of the interplay between technological advancements, legal and regulatory frameworks, shifting consumer preferences, and intense competition, the global economy is vulnerable to a wide range of threats (Ali et al, 2020;Anton & Nucu, 2020). Therefore, both medium-and large-scale manufacturing firms face a number of risks that threaten their ability to achieve their goals and maintain their competitive edge (Berry-Stölzle et al, 2018;Al-Nimer et al, 2021). As a result, manufacturing firms are under pressure to devise measures to lessen the impact of risks and uncertainty on their financial performance (Naseem et al, 2020;Ehiedu & Toria, 2022).…”

Business Model Innovation Based on New Technologies and Its Influence on a Company’s Competitive Advantage

“…Some of them refer both to H1 and H2 (general boundary conditions) while others refer either to H1 or H2 (specific boundary conditions). One of the general boundary conditions refers to risk [80]. Because many BMI initiatives fail [81], both H1 and H2 assume that companies under investigation have reasons (e.g., BMI's market potential or company's differentiated fields of activity, etc.)…”