Research Results Summary

Dissertation Paper Title

Applying the Balanced Scorecard Method to Explore the Value of Enterprise Risk
Management - A Proposed Framework with Turner and Townsend

Research Background

This research aimed at exploring whether Enterprise Risk Management (ERM)

could bring value to project performance. In pursuit of this aim, the paper reflected
upon the theoretical aspects of ERM, and how it differs from traditional risk
management. An overview of the academic literature and empirical research on ERM
value provided insight into how the topic has been approached in academic and
empirical work. A research gap was highlighted in the form of insufficient focus on
the intangible aspects of ERM value, and an inconsistent approach to measuring the
value of ERM, since different researchers used different value proxies (such as ROE,
Tobin’s Q etc.). Inconsistency in the use of value proxies lead to disparate results,
which border with inconclusive. Therefore, the research aimed at adopting a
framework for viewing ERM value in the broadest sense possible. In order to address
this gap, this research focused on expanding the concept of ERM value from financial
value to value in terms of reputation, governance, improved risk management
competencies, compliance and control, communication, as well as performance.
Additionally, although ERM is a system most frequently practiced at business
level, this research focuses on its value-contribution at project level. Therefore, the
notion of project performance was discussed, with the conclusion that the traditional
way of viewing project performance (through the lens of the “iron triangle” of time,
cost and quality) is obsolete (Kerzner, 2011; Atkinson, 2009), especially in project-
based organisations, where projects are the main drivers of overall organisational
performance (Todorovic et al., 2013). The need to view project performance in a
broad sense was linked with the need to view ERM value in a broad and
comprehensive sense, which resulted in the decision to adopt the Balanced Scorecard
as a framework for exploring ERM value in the context of project performance, as per
Acharyya’s (2008) proposal.
Given that the research was set in the real-world, and focused on exploring a
phenomenon (ERM value) at great depth, a case study methodology was adopted.
The research was set within an independent professional services company that
specialises in programme and project management, cost management and consulting
– Turner and Townsend.
Given the selected methodology, the rich theory on ERM had to be condensed into a
model that could be used in the real world, encompassing the key components of
ERM as a system. Additionally, the research had to find a way of implementing the
BSC as a framework for exploring ERM value. Thus, the following research questions
emerged:
• What are the essential components of ERM as a system?
• How can the BSC be used to explore ERM value to project performance?
• Can ERM bring value to project performance?

Research Execution

This research had a qualitative research design, and an inductive approach. In other
words, the researcher relied solely on qualitative data, and aimed at answering the
aforementioned research questions, rather than introducing hypotheses.
Data collection and data analysis were conducted in two phases:
Phase one entailed conducting seven one-to-one semi-structured interviews with
project managers in the company; and phase two entailed unstructured interviews /
discussions with the Head of Major Programmes Advisory Group, a Director in the
Major Programmes Advisory Group, and a Senior Project Manager. In the second
phase of the research, the application of Soft Systems Methodology was seen as a
means of bridging the gap between the theory and practice of ERM. In other words,
introducing a ‘generic’ concept of ERM (based on input from Deloach, 2000; COSO
ERM, 2016; and ISO 31000, 2013), enabled a discussion on the value of ERM in
general, rather than a particular ERM framework or standard.