Annals of Operations Research

, Volume 237, Issue 1–2, pp 281–300 | Cite as

Optimizing enterprise risk management: a literature review and critical analysis of the work of  Wu and Olson



Risks exist in all aspects of our lives. Using data in both Scopus and ISI Web of Science, this review paper identifies pioneer work and pioneer scholars in enterprise risk management (ERM). Being ranked the first based on the review data, Desheng Wu has been active in this area by serving as a good academic network manager on the global research network, His global efforts with diverse networking have enabled him to publish outstanding papers in the field of ERM. Therefore, this paper also conducts a literature review of his papers and critical analysis of the work of Wu and Olson, from the perspective of the ERM, to glean implications and suggestions for the optimization and customization of the ERM.


Enterprise risk management (ERM) Risk elements W-O ERM model Value at risk (VaR) Customization 



This work is partially supported by NFSC grant (Grant # 71471055), the 100-Talents plan Program at Chinese Academy of Sciences and 1000-Talents plan Program for the Young Scientists.


  1. Arena, M., Arnaboldi, M., & Azzone, G. (2010). The organizational dynamics of enterprise risk management. Accounting Organizations and Society, 35(7), 659–675.CrossRefGoogle Scholar
  2. Arena, M., Arnaboldi, M., & Azzone, G. (2011). Is enterprise risk management real? Journal of Risk Research, 14(7), 779–797.CrossRefGoogle Scholar
  3. Arnold, V., Benford, T., Canada, J., & Sutton, S. G. (2011). The role of strategic enterprise risk management and organizational flexibility in easing new regulatory compliance. International Journal of Accounting Information Systems, 12(3), 171–188.CrossRefGoogle Scholar
  4. Baranoff, E. G. (2004). Risk management: A focus on a more holistic approach three years after September 11. Journal of Insurance Regulation, 22(4), 71–82.Google Scholar
  5. Beasley, M. S., Clune, R., & Hermanson, D. R. (2005). Enterprise risk management: An empirical analysis of factors associated with the extent of implementation. Journal of Accounting and Public Policy, 24(6), 521–531.CrossRefGoogle Scholar
  6. Beasley, M., Pagach, D., & Warr, R. (2008). Information conveyed in hiring announcements of senior executives overseeing enterprise-wide risk management processes. Journal of Accounting, Auditing & Finance, 23(3), 311–332.Google Scholar
  7. Bell, L. W., & Moore, A. D. (2012). Integrated crop-livestock systems in Australian agriculture: Trends, drivers and implications. Agricultural Systems, 111, 1–12. doi: 10.1016/j.agsy.2012.04.003.CrossRefGoogle Scholar
  8. Blome, C., & Schoenherr, T. (2011). Supply chain risk management in financial crises–A multiple case-study approach. International Journal of Production Economics, 134(1), 43–57.CrossRefGoogle Scholar
  9. Chen, X., Wang, X., & Wu, D. D. (2010). Credit risk measurement and early warning of SMEs: An empirical study of listed SMEs in China. Decision Support Systems, 49(3), 301–310.CrossRefGoogle Scholar
  10. Choi, Y., & Lee, E. Y. (2009). Optimizing risk management for the sustainable performance of the regional innovation system in Korea through metamediation. Human and Ecological Risk Assessment, 15(2), 270–280.CrossRefGoogle Scholar
  11. COSO, I. (2004). Enterprise risk management-integrated framework. Committee of Sponsoring Organizations of the Treadway Commission.Google Scholar
  12. Dickinson, G. (2001). Enterprise risk management: Its origins and conceptual foundation. Geneva Papers on Risk and Insurance-Issues and Practice, 26(3), 360–366.CrossRefGoogle Scholar
  13. Diers, D. (2011). Management strategies in multi-year enterprise risk management. The Geneva Papers on Risk and Insurance-Issues and Practice, 36(1), 107–125.CrossRefGoogle Scholar
  14. Gatzert, N., Schmeiser, H., & Schuckmann, S. (2008). Enterprise risk management in financial groups: Analysis of risk concentration and default risk. Financial Markets and Portfolio Management, 22(3), 241–258.CrossRefGoogle Scholar
  15. Gatzert, N., & Schmeiser, H. (2011). On the risk situation of financial conglomerates: Does diversification matter? Financial Markets and Portfolio Management, 25(1), 3–26.CrossRefGoogle Scholar
  16. Gordon, L. A., Loeb, M. P., & Tseng, C. Y. (2009). Enterprise risk management and firm performance: A contingency perspective. Journal of Accounting and Public Policy, 28(4), 301–327.CrossRefGoogle Scholar
  17. Ho, C. T. B., Wu, D. D., Chou, C., & Olson, D. L. (2009). A risk scoring model and application to measuring Internet stock performance. International Journal of Information Technology & Decision Making, 8(1), 133–149.CrossRefGoogle Scholar
  18. Hoyt, R. E., & Liebenberg, A. P. (2011). The value of enterprise risk management. Journal of Risk and Insurance, 78(4), 795–822.CrossRefGoogle Scholar
  19. Huang, S. M., Hung, W. H., Yen, D. C., Chang, I. C., & Jiang, D. N. (2011). Building the evaluation model of the IT general control for CPAs under enterprise risk management. Decision Support Systems, 50(4), 692–701.CrossRefGoogle Scholar
  20. Koutoupis, A. G., & Tsamis, A. (2009). Risk based internal auditing within Greek banks: A case study approach. Journal of Management & Governance, 13(1–2), 101–130.CrossRefGoogle Scholar
  21. Kretzschmar, G., McNeil, A. J., & Kirchner, A. (2010). Integrated models of capital adequacy–Why banks are undercapitalised. Journal of Banking & Finance, 34(12), 2838–2850.CrossRefGoogle Scholar
  22. Kuhn, J. R, Jr, & Sutton, S. G. (2010). Continuous auditing in ERP system environments: The current state and future directions. Journal of Information Systems, 24(1), 91–112.CrossRefGoogle Scholar
  23. Liu, J. Y., Low, S. P., & He, X. (2011). Current practices and challenges of implementing enterprise risk management (ERM) in Chinese construction enterprises. International Journal of Construction Management, 11(4), 49–63.CrossRefGoogle Scholar
  24. Markowitz, H. (1952). Portfolio selection*. The Journal of Finance, 7(1), 77–91.Google Scholar
  25. McShane, M. K., Nair, A., & Rustambekov, E. (2011). Does enterprise risk management increase firm value? Journal of Accounting, Auditing & Finance, 26(4), 641–658.CrossRefGoogle Scholar
  26. Mikes, A. (2009). Risk management and calculative cultures. Management Accounting Research, 20(1), 18–40.CrossRefGoogle Scholar
  27. Mills, E. (2009). A global review of insurance industry responses to climate change. The Geneva Papers on Risk and Insurance-Issues and Practice, 34(3), 323–359.CrossRefGoogle Scholar
  28. Moore, A. D., Bell, L. W., & Revell, D. K. (2009). Feed gaps in mixed-farming systems: Insights from the Grain & Graze program. Animal Production Science, 49(10), 736–748. doi: 10.1071/AN09010.CrossRefGoogle Scholar
  29. Nakata, A., Ikeda, T., Takahashi, M., Haratani, T., Fujioka, Y., Fukui, S., et al. (2005). Sleep-related risk of occupational injuries in Japanese small and medium-scale enterprises. Industrial Health, 43(1), 89–97. doi: 10.2486/indhealth.43.89.CrossRefGoogle Scholar
  30. Nakata, A., Ikeda, T., Takahashi, M., Haratani, T., Hojou, M., Fujioka, Y., et al. (2006). Impact of psychosocial job stress on non-fatal occupational injuries in small and medium-sized manufacturing enterprises. American Journal of Industrial Medicine, 49(8), 658–669.CrossRefGoogle Scholar
  31. O’Donnell, E. (2005). Enterprise risk management: A systems-thinking framework for the event identification phase. International Journal of Accounting Information Systems, 6(3), 177–195.CrossRefGoogle Scholar
  32. Olson, D. L., & Wu, D. D. (2008). Enterprise risk management (Vol. 1). Singapore: World Scientific.Google Scholar
  33. Olson, D. L., & Wu, D. (2011a). The impact of distribution on value-at-risk measures. Mathematical and Computer Modelling, 58(9), 1670–1676.Google Scholar
  34. Olson, D. L., & Wu, D. (2011b). Multiple criteria analysis for evaluation of information system risk. Asia-Pacific Journal of Operational Research, 28(01), 25–39.Google Scholar
  35. Olson, D. L., & Wu, D. (2011c). Risk management models for supply chain: A scenario analysis of outsourcing to China. Supply Chain Management–An International Journal, 16(6), 401–408.Google Scholar
  36. Olson, D. L., & Wu, D. (2013). Extreme-event risk management: A review of “Lee, B., Preston, F. 2012. Preparing for High-impact, Low-probability Events: Lessons from Eyjafjallajokull. London: Chatham House”. Journal of Cleaner Production, 53, 67–68.Google Scholar
  37. Paape, L., & Speklè, R. F. (2012). The adoption and design of enterprise risk management practices: An empirical study. European Accounting Review, 21(3), 533–564.Google Scholar
  38. Pagach, D., & Warr, R. (2011). The characteristics of firms that hire chief risk officers. Journal of Risk and Insurance, 78(1), 185–211.CrossRefGoogle Scholar
  39. Raiborn, C. A., Butler, J. B., & Massoud, M. F. (2009). Outsourcing support functions: Identifying and managing the good, the bad, and the ugly. Business Horizons, 52(4), 347–356.CrossRefGoogle Scholar
  40. Robertson, M. J., Lawes, R. A., Bathgate, A., Byrne, F., White, P., & Sands, R. (2010). Determinants of the proportion of break crops on Western Australian broadacre farms. Crop and Pasture Science, 61(3), 203–213.CrossRefGoogle Scholar
  41. Serrat, O. (2009). Social network analysis. Knowledge Solutions No 28, Asian Development Bank, Manila.Google Scholar
  42. She, S. X., Ma, C. Q., & Wu, D. D. (2010). General probability-time tradeoff and intertemporal risk-value model. Risk Analysis, 30(3), 421–431.CrossRefGoogle Scholar
  43. Sutton, S. G. (2006). Extended-enterprise systems’ impact on enterprise risk management. Journal of Enterprise Information Management, 19(1), 97–114. doi: 10.1108/17410390610636904.CrossRefGoogle Scholar
  44. Walker, R. (2013). Winning with risk management. Singapore: World Scientific.CrossRefGoogle Scholar
  45. Wei, J., Zhou, L., Wang, F., & Wu, D. (2015). Work safety evaluation in Mainland China using grey theory. Applied Mathematical Modelling, 39(2), 924–933.CrossRefGoogle Scholar
  46. Wu, D. D. (2011). Introduction to the special SERRA issue on risks, uncertainties and the environment. Stochastic Environmental Research and Risk Assessment, 25(3), 301–304.CrossRefGoogle Scholar
  47. Wu, D. D., & Birge, J. R. (2012). Serial chain merger evaluation model and application to mortgage banking. Decision Sciences, 43(1), 5–36.CrossRefGoogle Scholar
  48. Wu, D. D., Chen, S. H., & Olson, D. L. (2014a). Business intelligence in risk management: Some recent progresses. Information Sciences, 256, 1–7.CrossRefGoogle Scholar
  49. Wu, D. D., Luo, C., Wang, H., & Birge, J. R. (2014b). Bi-level programing merger evaluation and application to banking operations. Production and Operations Management.Google Scholar
  50. Wu, D., & Olson, D. L. (2008). Supply chain risk, simulation, and vendor selection. International Journal of Production Economics, 114(2), 646–655.CrossRefGoogle Scholar
  51. Wu, D. D., & Olson, D. L. (2009a). Enterprise risk management: Small business scorecard analysis. Production Planning & Control, 20(4), 362–369.CrossRefGoogle Scholar
  52. Wu, D. D., & Olson, D. L. (2009b). Introduction to the special section on “Optimizing risk management: Methods and tools”. Human and Ecological Risk Assessment: An International Journal, 15(2), 220–226. doi: 10.1080/10807030902760967.CrossRefGoogle Scholar
  53. Wu, D., & Olson, D. L. (2010a). Enterprise risk management: Coping with model risk in a large bank. Journal of the Operational Research Society, 61(2), 179–190.CrossRefGoogle Scholar
  54. Wu, D. D., & Olson, D. (2010b). Enterprise risk management: A DEA VaR approach in vendor selection. International Journal of Production Research, 48(16), 4919–4932.CrossRefGoogle Scholar
  55. Wu, D. D., & Olson, D. L. (2010c). Introduction to special section on “Risk and technology”. Technological Forecasting and Social Change, 77(6), 837–839.CrossRefGoogle Scholar
  56. Wu, D. S. D., & Olson, D. L. (2013). Computational simulation and risk analysis: An introduction of state of the art research. Mathematical and Computer Modelling, 58(9–10), 1581–1587.CrossRefGoogle Scholar
  57. Wu, D. D., & Olson, D. L. (2014). A system dynamics modelling of contagion effects in accounts risk management. Systems Research and Behavioral Science, 31(4), 502–511.CrossRefGoogle Scholar
  58. Wu, D., Wu, D. D., Zhang, Y., & Olson, D. L. (2013). Supply chain outsourcing risk using an integrated stochastic-fuzzy optimization approach. Information Sciences, 235, 242–258.CrossRefGoogle Scholar
  59. Wu, D. D., Xie, K., Chen, G., & Gui, P. (2010a). A risk analysis model in concurrent engineering product development. Risk Analysis, 30(9), 1440–1453.CrossRefGoogle Scholar
  60. Wu, D. D., Xie, K. F., Hua, L., Shi, Z., & Olson, D. L. (2010b). Modeling technological innovation risks of an entrepreneurial team using system dynamics: An agent-based perspective. Technological Forecasting and Social Change, 77(6), 857–869.CrossRefGoogle Scholar
  61. Wu, D. D., Zhang, Y. D., Wu, D. X., & Olson, D. L. (2010c). Fuzzy multi-objective programming for supplier selection and risk modeling: A possibility approach. European Journal of Operational Research, 200(3), 774–787.CrossRefGoogle Scholar
  62. Wu, D. D., Zheng, L., & Olson, D. L. (2014c). A decision support approach for online stock forum sentiment analysis. IEEE Transactions on Systems Man and Cybernetics, 44(8), 1077–1087.CrossRefGoogle Scholar
  63. Wunder, H. F. (2009). Tax risk management and the multinational enterprise. Journal of International Accounting, Auditing and Taxation, 18(1), 14–28.CrossRefGoogle Scholar
  64. Xu, K. Q., Liao, S. S., Li, J. X., & Song, Y. X. (2011). Mining comparative opinions from customer reviews for competitive intelligence. Decision Support Systems, 50(4), 743–754.CrossRefGoogle Scholar
  65. Yow, S., & Sherris, M. (2008). Enterprise risk management, insurer value maximisation, and market frictions. Astin Bulletin, 38(1), 293.CrossRefGoogle Scholar
  66. Zhao, F., Dash, Wu, & D., Liang, L., & Dolgui, A., (2014). Cash flow risk in dual-channel supply chain. International Journal of Production Research, 1–14, doi: 10.1080/00207543.2014.986302.
  67. Zhao, X., Hwang, B.-G., & Low, S. P. (2013). Developing fuzzy enterprise risk management maturity model for construction firms. Journal of Construction Engineering and Management, 139(9), 1179–1189.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • Yongrok Choi
    • 1
  • Xiaoxia Ye
    • 2
  • Lu Zhao
    • 2
  • Amanda C. Luo
    • 3
  1. 1.College of Economics and International TradeInha UniversityIncheonKorea
  2. 2.Stockholm Business SchoolStockholm UniversityStockholmSweden
  3. 3.Department of MathematicsUniversity of TorontoTorontoCanada

Personalised recommendations