Dissertation: ERM, Networking, Financial Performance in Australia

This dissertation investigates the intricate relationships between enterprise risk management (ERM), self-organization, networking, and financial performance within the context of Australian private procurement contracts. The study employs a mixed-methods approach, gathering data from both primary and secondary sources, including a survey of 250 contractors, and utilizes SPSS analysis to determine correlations between ERM, networking, and financial performance. The research examines the impact of ERM on financial outcomes, the role of networking in mitigating risks, and the influence of self-organization on these dynamics. Findings reveal insights into the effectiveness of ERM practices, the significance of stakeholder relationships, and the influence of internal and external networks. The dissertation concludes by offering recommendations for enhancing risk management strategies and fostering financial success in procurement settings.

Dissertation
(Enterprise risk management, self-organization,
networking and financial performance in Australia
Private procurement contract)

ACKNOWLEDGEMENT
I would like to give a sincere thanks to supervisor for their guidance in completing this
research and for providing required information and direction.
I would also like to give special thanks to Head of Department who supported me in this
project and along with them I would also like to thank institute for providing me opportunity for
this research. I would also like to express gratitude towards friends and peers who helped me in
different ways for completing this research.

ABSTRACT
Introduction - This study has described about enterprise risk management, self-organization,
networking and financial performance in Australia Private procurement contracts. It has focused
on relationship between ERM, networking with financial performance. Besides that, it is
discussed in depth about ERM and how it plays vital role in procurement contracts.
Methods – The data is gathered from both primary and secondary sources of data in order to
answer research question. Also, sample size chosen from this sample frame is 250 contractors.
Besides that, SPSS analysis is used to determine relationship between ERM, networking and
financial performance. Alongside, anova test and one sample T test, scholar has determined the
association between variables.
Results- It is evaluated that P value obtained is P= .239 which states ongoing activities impact
on self organisation and risk management. Also, P value found is P= 0.00 that shows top
management does not get relevant data and info on managing risk. The P value is .000 so, there
is no significant relationship between intra and inter networking and their role in managing risk.
Discussion- It is discussed hat there is a strong relationship between ERM and financial
performance of an organization. Effective and proper relationship with financial performance can
help an organization in reducing risk associated with financial performance of a business. There
are various kinds of risk management techniques that can be used by organization. Moreover,
organization is required to have a strong relationship between Enterprise risk management and
networking as it helps them to reduce uncertain risk and also improves management of risk.
Conclusion - It is concluded that networking and financial performance are related to one
another. This is because in networking both internal and external stakeholder are there. They are
inter related to each other and form a network. They play vital role in maintaining financial
performance.

Table of Contents
CHAPTER 1: INTRODUCTION....................................................................................................6
Introduction:....................................................................................................................................6
Overview of research...................................................................................................................6
1.2 Research problem statement:...............................................................................................10
1.3 Justification for research......................................................................................................12
BACKGROUND.............................................................................................................14
AIMS AND OBJECTIVES.............................................................................................17
Research questions...........................................................................................................18
Research hypothesis.........................................................................................................18
1.4 Research methodology.........................................................................................................19
1.5 Outline of research...............................................................................................................19
1.6 Summary of findings...........................................................................................................20
1.7 Definition of key terms........................................................................................................20
1.8 Assumption, delimitation, and justification for the scope of research................................21
1.9 Conclusion...........................................................................................................................21
CHAPTER 2: LITERATURE REVIEW.......................................................................................22
2.0 Introduction..........................................................................................................................22
2.1 Enterprise Risk Management and Financial performance...................................................25
2.2 Enterprise risk management and self-organisation..............................................................30
2.3 Enterprises risk management and networking.....................................................................34
Risk Resilience................................................................................................................35
Risk management in decision making.............................................................................36
2.4 Self-organisation and networking........................................................................................37
2.5 Networking and financial performance...............................................................................40
2.6 Research problem gap..........................................................................................................44
Chapter 3 Hypothesis development...............................................................................................46
CHAPTER 4: RESEARCH METHODOLOGY...........................................................................57
3.0 Introduction..........................................................................................................................58
3.1 Research design...................................................................................................................59
3.2 Area of study........................................................................................................................65

3.3 Study population and Sampling Size...................................................................................66
3.4 Sampling Design and Procedure..........................................................................................68
3.5 Data Collection procedures..................................................................................................70
3.6 Sources of data.....................................................................................................................71
3.7 Measurement of variables....................................................................................................74
3.8 Validity and reliability of instrument..................................................................................75
3.9 Data process and analysis....................................................................................................77
3.10 Ethical consideration.........................................................................................................79
3.11 Conclusion.............................................................................................................................81
CHAPTER 5: FINDING AND RESULTS....................................................................................82
4.1 Introduction..............................................................................................................................82
4.2 Overview of data sample.........................................................................................................82
4.3 Descriptive, empirical and qualitative analysis.......................................................................82
4.4 Results from evidence for each research question...................................................................83
4.5 Conclusion.............................................................................................................................154
CHAPTER 6: DISCUSSION, CONCLUSION AND RECOMMENDATION..........................155
5.0 Introduction........................................................................................................................155
5.1 The relationship between Enterprise Risk management and Financial performance........156
5.2 The relationship between Enterprise Risk management and self-organization.................158
5.3 The relationship between Enterprise Risk management and networking..........................159
5.4 The relationship between self-organization and networking.............................................161
5.5 The relationship between Networking and supplier performance.....................................162
5.6 Conclusion.........................................................................................................................164
5.7 Recommendations..............................................................................................................165
5.8 Limitations to the study.....................................................................................................166
5.9 Areas for further research......................................................................................................168
REFERENCES............................................................................................................................169
APPENDIX..................................................................................................................................174
Appendix 1...................................................................................................................................174

Topic: Enterprise risk management, self-organization, networking and financial performance
in Australia Private procurement contracts 44600
CHAPTER 1: INTRODUCTION
Introduction:
Overview of research
This is the first chapter in the research study which comprises the research topic, aim, objective,
and questions. The chapter starts with the writing of an overview of the research topic and what
the research is all about and what exactly is going to be researched in the following dissertation.
This chapter consists of the background of the study as to what exactly the research is about and
how what is the structure of the whole thesis (Alexander, Gelderblom, & Kock, 2015). This
chapter narrows down the focus and defines the scope of the research. Moreover, the section also
describes the aim and objectives, with the rationale for choosing the specific topic. The
significance of this study is to provide a clear reflect why the study is conducted and assist to
gain knowledge related to the topic. Here, a discussion related to the state of existing research on
the topic is conducted and the relevance of the research is depicted to answer the research issue
in a border way. In this chapter, an overview of the dissertation structure is presented.
In recent times, many businesses are facing critical issues in procurement and due to this, they
are not able to grow and develop. However, the issues are related to quality, price, etc. besides
this, planning and controlling measures are effectively taken to manage risk but private firms can
mitigate impact only to some extent. Nowadays it is required for organizations to maintain
proper communication with internal and external stakeholders because it allows gathering
relevant data and info. In a procurement contract, the major risk is supply chain management.
Sometimes, ineffective supply of materials results in occurring of high risk. Therefore, it changes
the entire context and situation of procurement and the situation also changes due because risk
effect areas according to its degree. Basically, in the supply chain, there are various points or
processes where at the supplier end there is no risk but at companies end risk level is very high
(Berry-Stolzle & Xu, 2016). Similarly, the risk is at the supplier's end but not at companies end.
Along with this the present study will be also work in direction of establishing the impact of the
risk management process of the company over the performance and sustainability of the
company. This is pertaining to the fact that in case the risk within the company will not be

managed then this will affect the working of the company to a great extent. In addition to this the
current study will also outline the fact that the business plays a crucial role within the building
and management of the risk resilience and to determine the management of the natural resources
in order to result in sustainable development. Further the study will also outline the building of
the relationship between the private governance and the private business development along with
the promotion of the innovation by the government through procurement.
Risk management is the process of protecting those value-based areas. Thus, it is essential to
mitigate the impact of risk on that area so that value is aligned. This is because stakeholders are
not involved in measuring risk. However, procurement also faces the problem of risk
identification. It is stated that 8% of procurement organizations have measured risk in the supply
chain. But they have measured it from the external point of view (Lewis, 2001) thus, no proper
measures are taken to protect risk and improve supply chain outcomes. So, to get relevant
outcomes, it is necessary to identify resources from natural risk owners. However, only
determining risk is not beneficial until clear vision, action, etc. the risks are also occurred due to
insufficient info gathered by firms from stakeholders. If businesses are having an improper
network with the suppliers, the government, and with inter departments then there are high
chances of risk. Generally, a strong network of suppliers enables collecting relevant data. Apart
from it, the firm can easily switch from one supplier to another if the high-level risk is identified.
This results in impacting their financial performance. However, business productivity decreases
as well. A network is established through self-organization (Carnovale, Rogers, & Yeniyurt,
2019). So, by following process or methods communication is done and data and information are
shared.
Enterprise risk management (ERM) standpoint, there is a broader disconnect between evaluating
enterprise risk overall versus extending those risk factors in a cohesive manner out to the supply
chain and out to the supply base where contracts are signed that hopefully help mitigate most
supplier risks. ERM frameworks is assess to context in which it is operating which means
understanding the internal risk management environment of a firm and the interest of the
stakeholders (Sweeting, 2017). ERM framework is being defined as the risk management which
involves identification of the particular event relevant to the company. This framework assists

the company in assessing them in terms of the likelihood and the magnitude of the impact of the
risk and to determine the response strategy and in addition to this monitoring process. In addition
to this with help of effective identifying and addressing the risk and opportunities and the
business enterprises try to protect the stakeholders and create value for the betterment of the
stakeholders. In addition to this ERM can also be defined as the risk based approach in order to
manage the enterprise in effective manner. The enterprise is being set within the external
environment and there are many different risks which the business may face. Hence, it is very
essential for them to manage these risks in proper and effective manner.
To manage risk, private firms are using many techniques. It has enabled in improving processes
or methods through which risk is managed. Alongside, the major area where risk has occurred is
procurement and due to it, the supply chain is impacted to a great extent. At present time,
organizations are focusing on improving their financial performance because it benefits them in
maintaining growth and development. Also, by analysing data from stakeholders such as
suppliers, investors, customers, etc. (Creswell & Poth, 2018) financial performance is improved,
and the self-organization also plays a significant role. It consists of processor methods that are
used or implemented through self-organization as well financial performance can be improved.
This change is done in the process or new methods are implemented. It enables improving their
efficacy and strengthening networking. With help of it, the operational process is changed, and
proper monitoring is done where the firm develops a new process that supports managing
activities and tasks.
The private firms are not able to maintain financial performance, it may be due to several reasons
or factors. The main reason is a high risk, and it is difficult for businesses to identify risk and
mitigate its impact. Generally, supplier management plays a vital role in the value chain in
procurement. However, the occurrence of risk in many areas is directly integrated with finance.
So, there is a decrease in firm investment and capability to grow and expand. By installing ERM
in procurement risk can be easily identified and then managed. In that strategies are developed to
deal with it. Moreover, there is proper evaluation and auditing of risk provides insight into the
type and degree of risk that can occur. They are: - Credit Risk, it is also called Default Risk.
Credit Risk is related to borrowed money and the amount of risk involved in giving money to the

borrower is financially defined as Credit Risk. If the borrower of the money gets default in
repaying the borrowed money the credit risk goes high (Duan, Bhaumik, Palinkas, & Hoagwood,
2015) the investor suffering from high credit risk also faces a decline in the income from loan
repayment and the borrower also face a rise in debt. The minimum credit risk always motivates
the financial organization to invest more money in the market and it gives more freedom to the
financial organization for doing their business. Market Risk also called Systematic Risk is
associated with the financial market in which financial organization conducts their operations.
The level of market risk will always drive the financial market and market risk involves market
stability. The policies of the government about the financial structure of the company create an
impact on the market risk of the financial organization. If the market is stable and the policies of
the governments are not fluctuating, and the cash flows are suitable the market risk for the
financial organization will be minimum. Liquidity Risk- It involves the cash flows in the
market. If the cash flows are appropriate in the market and the company has his resources to pay
all its debt then the liquidity risk will be not high (Etikan, Musa, & Alkassim, 2016). Liquidity
risk also involves two factors one is a market liquidity risk and the second factor known as
funding liquidity risk. If the securities are unable to sell in the market quickly due to more sellers
than buyers, this situation is called market liquidity risk and in the case of funding liquidity risk
the shortage of funds becomes the reason behind liquidity risk. Operational Risk- It arises due
to a lack of operational planning in the organization and based on the company's internal defaults
in planning, organizing, and proper utilization of the funds. Operational risk creates a negative
impact on the company's growth and sustainability. Financial resources are minimum, and a
company needs to plan optimistically about all its financial capabilities so it can sustainably
grow in the market. High operational risk will always portrait a negative image in front of the
shareholders of the company because it directly reflects the company's internal structure
especially regarding policymaking.
In procurement usually, decisions are taken at a low level and this is because the main thing
considers here is that by eliminating risk at a low level it is easy to manage it at a high level. On
other hand, risk management is considered strategic and all decisions regarding it are taken.
Here, risk management strategies are integrated with procurement.

1.2 Research problem statement:
Problem: The problem statement for the present study is to determine the impact of
implementing risk management process within an organization. This in turn helps to improve the
business performance and run in effective sustainable ways regarding the business cooperation,
good performance and safety. Further, it is also examined that entire research is based upon
enterprise risk management and through this, different private procurement agencies have
increased their scrutiny on the risk management process and that is why the study also highlights
the significance of using ERM by the companies to manage risk. Therefore, the main reason for
choosing the specific topic is that scholar have their own interest to study on the topic and that is
why, while researching on this topic, they gain or enhance their knowledge and learn different
terms related to the topic (Shatnawi, Hanefah, & Eldaia, 2019).
Issue: The present research will discuss the issue regarding impact of risk management process
in an organization. Along with this, it also helps to determine the natural resources for
contributing towards sustainable development. In addition to this, through the research, scholar is
able to develop an ability to manage risk which assists companies to act more confidently in their
future business decision making. Currently, they face a risk which does not provide various
options in order to deal with the problem. That is why, to minimize the issue, present study will
be used to provide outcomes about what are different high and low-level risks for private firms in
procurement. Also, it will be able to determine the impact of each risk on procurement contracts
(Arena, Arnaboldi, & Palermo, 2017). Alongside, companies will get an overview about what
type of financial risk can occur that is market, operational, liquidity, etc. and how risk can be
managed in this.
Relevance: The problem statement of the research is such that to show the importance of risk
management process within an organization and determine the role of business in risk resiience
while facing any natural disaster. The relevance of the study will reflect on that how ERM can
affect self-organization, networking, and financial performance. It will show that how
networking can affect financial performance and what loss can occur. Besides this, how self-
organization can also lead to a company's overall financial performance. In this many other
things included in the study that relate to the topic. The research will find out what type of
natural disaster risk are being faced by communities. Moreover, what is the role of management

in providing data and information about risk? Additionally, research will discuss the relation
between private governance and business development. It will briefly the role of policies and
procedures for private companies.
Objectives:
In order to address the problem of the research, different objectives has been set that
helps to answer the research problem. Such that:
 To examine the role off business while build risk resilience communities in order to face
natural disaster.
 To identify the management approaches of a business that contribute to sustainable
development.
 To determine the relationship shared between the private governance as well as private
business development for sustainability.
Therefore, through the research, researcher learn different terms related to the topic, and
therefore, the knowledge will help to grab better future opportunities as well. In addition to this,
it is also analysed that studying the topic will help to investigate the impact of establishing a risk
management process within an organization and determine how the performance is affected by
comparing present condition to the future.
Another rationale for choosing the topic is such that scholar wants to enhance their knowledge
related to business and risk and that is why it is essential to study on this. Moreover, enhancing
current knowledge will help the researcher to use that in their near future so that the chances of
attending opportunities will be increased. Even, in this competitive era, every firm faces issues
and risks and that is why they implement different strategies to minimize the risk and it also
ensures that the financial performance is also managed.
In this, it will also be described that how changing process or methods in self-
organization is beneficial. Moreover, how with help of an effective network financial
performance is improved. Usually, in procurement risk arise due to quality, price, or suppliers. It
changes many things related to the contract.

1.3 Justification for research
The research serves the purpose of informed action. The dissertation pursues to contextualize its
findings within the larger body of research. This research serves high quality to produce
knowledge that is applicable outside of the research setting. Furthermore, the results of the study
have implications for policy and future project implementation that helps to leads a business
towards success (Salloum, Jobbour, & Mercier-Suissa, 2019). Moreover, through this researcher,
scholars will also gain knowledge related to the topic and determine different ways of managing
risk as well.
Moreover, by the study on the topic, the researcher also identifies enterprise risk
management and current issues as well as changes that impact business performance as well as
gain knowledge related to sustainability as well. In this modern era, every company needs to be
more focused on the sustainability goals so that it will easily identify how the communities risk
resilience faces some disaster within the firm and how to cope up with the issue as well. On the
other side, it is also analysed that another sign of the study is to analyse the impact of different
enterprise risk management that creates a positive or negative impact upon the business's overall
performance. Further, studying the topic will help the researcher to use some tools that help to
mitigate the risk and lead a business towards success. The study will also provide a detailed
insight into how ERM is applied or followed by private firms. Besides this, what is the
relationship between ERM and self-organization that is how risk can be managed by improving
processes or methods in self-organization? Moreover, how the change in self-organization
impact ERM. Along with it, the private firms will be able to implement processes or methods to
manage risk. Furthermore, by evaluating the outcomes companies will understand the
relationship between ERM and financial performance. Then, on basis of it proper measures and
strategies are formed (Tucker, Luu, & Poulsen, 2016). Therefore, the organization will get
insight into the type of impact that occurs and in what way financial performance is degraded. In
addition to it, firms get to know what type of decision or strategies will be formed to minimize
financial performance. However, there are many other things as well the business will benefit if
from research. Furthermore, the study will provide outcomes that how ERM is related to
networking. The organization will analyse the role and importance of the internal and external
network in ERM and will find out areas of improvement. Furthermore, in the future private firms
will be able to strengthen their network.