The mediating effect of enterprise risk management implementation on operational excellence in the Malaysian oil and gas sector: a conceptual framework

Abstract

Globally, the challenges of the oil and gas industry are unique due to the nature of its operations that is full of risks. Issues like volatile market prices, health and safety, environmental performance and high cost of production are affecting the operational performance of the sector. These problems if left unchecked could change the level of production and revenue generation to the Malaysian government and would as well influence the country's regional position in oil and gas production. As a result, many oil and gas firms including PETRONAS adopted operational excellence strategy, but some of the challenges kept re-occurring. It is against this circumstance that this research is aimed at determining the effect of enterprise risk management determinants on operational excellence in the Malaysian oil and gas industry. It is also aimed at exploring the mediating effect of enterprise risk management implementation on such a relationship. The article used a conceptual approach where journal articles, conference papers, professional reports, thesis and term papers were reviewed. Conceptual and theoretical frameworks were proposed in this paper, and literature was reviewed to lay a foundation for empirical research that would establish the relationship between the postulated variables in the study. Dimensions and measurement of the variables in the current study were drawn from earlier researches and recommendations. However, data were not collected, and a result of the analysis was not presented in the paper.

Conceptualizing Corporate Sustainability Reporting and Risk Management Towards Green Growth in the Malaysian Oil and Gas Industry

“…Furthermore, firm's competitive advantage can be enjoyed specifically when alignment of the risk management practices is done to its core goals and overall strategy ; (Shad & Lai, 2015b). According to Tasmin and Muazu (2017) ERM is deemed as pertinent to achieve sustainable competitive advantage and higher business performance. It also helps the O&G industry to achieve operational excellence and improve productivity (Tasmin, Muazu, Aziati, & Zohadi, 2020).…”

“…According to Tasmin and Muazu (2017) ERM is deemed as pertinent to achieve sustainable competitive advantage and higher business performance. It also helps the O&G industry to achieve operational excellence and improve productivity (Tasmin, Muazu, Aziati, & Zohadi, 2020). The operational excellence in return leads to create sustainable improvement and assists in productive assets and capital utilization, environmental protection as well as create value to all relevant stakeholders.…”

Moderating Effect of Enterprise Risk Management on the Relationship Between Board Structures and Corporate Performance

“…The board of directors as part of board structure is the advocates of risk management in a corporate and has the final decision about the risk management implementation (Dabari & Saidin, 2016b;Annamalah et al, 2018). Several studies have been carried out on factors that influence ERM implementation in the firms (Ahmed & Manab, 2016a;Dabari & Saidin, 2016b;Tasmin & Muazu, 2017;Annamalah et al, 2018). These reports identified numerous variables that affect ERM implementation and also employed different measures to investigate the level of ERM implementation.…”

Enterprise Risk Management Implementation and Firm Performance: Evidence from the Malaysian Oil and Gas Industry

“…Because risk exists in every single operation in upstream and downstream, even down to refining and to retailing at the filling stations. In addition, O&G industry is relatively sensitive to and volatile with political, economic, social, technological, legal and environmental development (Tasmin & Muazu, 2017). An integrated risk management programs therefore are crucial to consider for multiple risks and demanding regulatory compliance in this industry.…”

“…As such in Malaysia, the O&G industry is the main player of the economy and of strategic importance in supporting future sustainable development plans of the Malaysian economy. There exist a number of risks such as the regulatory compliance, workplace health and safety, environmental and social issues, apart from the primary operational risk of the business itself (Osabutey et al, 2013;Tasmin & Muazu, 2017). Therefore, more risk management efforts are required in this industry to improve the firm's overall value.…”