Leveraging Integrated Information Systems to Enhance Strategic Flexibility and Performance: The Enabling Role of Enterprise Risk Management

International Journal of Accounting Information Systems 19: 1-16, 2015

Posted: 19 Dec 2015

See all articles by Vicky Arnold

Vicky Arnold

Norwegian School of Economics (NHH); University of Central Florida

Tanya Benford

Florida Gulf Coast University

Joseph Canada

Rutgers University

Steve G. Sutton

University of Central Florida; NHH Norwegian School of Economics

Date Written: September 1, 2015

Abstract

Enterprise risk management (ERM) has arguably become the dominant strategic management focus of organizations primarily due to a combination of factors — stakeholders’ aversion to uncertainty, volatility of the current marketplace, and compliance mandates such as the Sarbanes-Oxley Act. The purpose of this study is to develop and test a theory of the impact of ERM on two aspects of organizational performance, strategic flexibility and supply chain performance. The study is designed to examine conflicting views on the effect of increased levels of governance on organizations’ flexibility and supply chain performance, and determine whether ERM capability influences the observed differential effects. Building on theories related to the electronic integration perspective of firm agility and the role of knowledge integration on the activation of the link between strategic flexibility and performance, we develop a theory of ERM as an enabler of IT integration, flexibility, and performance. A cross-sectional field study of six companies illustrates the interrelationships and provides preliminary support for the theory. Subsequent testing using data from 155 Chief Audit Executives provides strong support for the theory. The results show that a broad-based, strategic approach to ERM enhances flexibility and strengthens the relationship between flexibility and performance. The results also provide evidence that enhanced IT integration is the mechanism through which ERM strengthens both flexibility and in turn performance.

Keywords: Strategic enterprise risk management, supply chain performance, business process control, information technology integration, organizational strategic flexibility

Suggested Citation

Arnold, Vicky and Benford, Tanya and Canada, Joseph and Sutton, Steve G. and Sutton, Steve G., Leveraging Integrated Information Systems to Enhance Strategic Flexibility and Performance: The Enabling Role of Enterprise Risk Management (September 1, 2015). International Journal of Accounting Information Systems 19: 1-16, 2015, Available at SSRN: https://ssrn.com/abstract=2705063

Vicky Arnold

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

University of Central Florida ( email )

University of Central Florida
P.O. Box 161400
Orlando, FL 32816-1400
United States
3217455000 (Phone)
32127 (Fax)

Tanya Benford

Florida Gulf Coast University ( email )

10485 FGCU Blvd S
Ft. Myers, FL 33965-6565
United States

Joseph Canada

Rutgers University ( email )

Camden, NJ 08102
United States

Steve G. Sutton (Contact Author)

University of Central Florida ( email )

4000 Central Florida Blvd
Orlando, FL 32816
United States

NHH Norwegian School of Economics ( email )

Helleveien 30
Bergen, NO-5045
Norway

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
1,406
PlumX Metrics