Enterprise risk management: Impact on performance of private higher educational institutions in Malaysia; [Zarządzanie ryzykiem przedsiębiorstwa: Wpływ na działalność prywatnych instytucji wyższego kształcenia w malezji]

• Published in: Polish Journal of Management Studies
• Main Author: Setapa M.; Mamat M.; Bakar H.A.; Yusuf S.N.S.; Kazemian S.
• Format: Article
• Language: English
• Published: Czestochowa University of Technology 2020
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85099411288&doi=10.17512%2fpjms.2020.22.1.31&partnerID=40&md5=519316280c5baf192d7091d3df6e8080

Risk management is not something new. It is traceable as a valid decision-making process in companies in the late 1940s and early 1950s. A “silo” or “stovepipe” approach was practiced in traditional risk management where risks are usually managed individually without accepting the interrelationship of each risk. However, Enterprise Risk Management (ERM) was introduced as a new, board-supervised method that intends to identify, evaluate and manage corporate risks in an integrated structure. Specifically, in Malaysia, a few private higher educational institutions (PHEIs) were in trouble due to many causes such as management, finance and marketing. In relation to this main idea and the current issues regarding PHEIs, the aim of this study is to develop a conceptual framework of ERM drivers and its impact on the performance of Malaysian PHEIs. Using probability sampling techniques namely simple random sampling, the questionnaires were distributed to 510 respondents from top managerial posts. However, an exact sample size required was 217. Independent variables were identified as internal factor, size and types of institution, and external factor. The dependent variable was the performance in the particular institution which consisted of three elements (e.g.: management, finance and marketing). Knowledge management was chosen as a mediator in this study. Data were analysed using SPSS statistical tool and SmartPLS 3.0. Results indicated that both internal factor and size and types of institution were related with performance in the particular institutions, and the external factor showed a negative relationship with performance. It was also found that only internal factor was mediated by knowledge management in terms of their performances. Finally, it was suggested for future research to use multiple methods and multiple sources to avoid any possibility of common method bias and to enhance the findings to be generalised, which can prevent overestimate of the structural model. Indeed, at present, general research in ERM is well established, but it is still in its infancy for educational institutions. © 2020, Czestochowa University of Technology. All rights reserved.