The relationship between organizational culture and enterprise risk management

Abstract

This article contributes to insights regarding the role of organizational culture in the implementation of risk management across an enterprise. Enterprise risk management is a systematic approach to managing all forms of risk faced by an organization, including those in the purview of an engineering manager. The literature discusses organizational culture’s importance in ERM implementation, but there is scant empirical evidence regarding this connection. This research combined a culture measurement instrument with gauges of ERM implementation. The results were correlated, and the analysis supports the hypothesis that organic cultures tend to make greater progress in their ERM programs. An engineering manager can use this article to identify potential cultural strengths and barriers prior to implementing ERM. © 2009 by the American Society for Engineering Management.