Relationships among risk and performance management: a comparative investigation

In the last decades risk management shifted from a narrow focus on technical analysis to holistic approaches that aim at contributing to long-term sustainability. This entailed the wide-spread diffusion of a more or less standardized set of practices (e.g., enterprise risk management systems, risk committees, risk officers, risk maps). Academic research has recently started to investigate how this escalation of risk practices may affect management control systems and calls for further investigation have been made. In this paper, we aim at contributing to this debate by examining the relationship between risk and performance management. More specifically, we investigate how Enterprise-wide Risk Management (ERM) enters in the domain of planning and controlling performances by analysing two telecommunication companies operating in different contexts (UK and Italy). The cases reveal two dimensions that affect risk and performance management and their relationships: the degree of interaction and the time-frame embraced in the use of risk and performance processes. Based on these evidence, the paper aims at contributing to management accounting research and practice in two ways. First it adds on the growing body of literature on the relationship between risk and performance management; second, it provides a first attempt to investigate differences in the use of risk-based organizational forms across different institutional settings.