Understanding Organisational Change in Implementing Enterprise Risk Management: A Comparative Case Study

Risk is an inherent part of sociology and development of risk requires consistency in understanding and implementation. Previous literature has provided undue significance to inconsistent practices and consistent practices have not yet explored such as what motivates two different firms in two substantially different markets to adopt same practices. The aim of this paper is to set out the understanding of organisational change in two insurance companies across different markets from the perspective of neo-institutional theory. The article presents a debate between revolutionary and evolutionary change in literature and practice. Enterprise Risk Management (ERM) considers all risk in holistic manner and many research have reported inconsistency of ERM practices across developing and developed markets. Therefore, a comparative case study has been carried out to understand reasons of adopting evolutionary and revolutionary change in developing market such as India and developed market such as UK. Case study involves interviews of over 20 senior management in two insurance companies. Both Companies are leading insurance companies in India and UK respectively and claimed to be pioneer in adopting ERM with evolutionary and revolutionary change in differing institutional pressure. Moreover, both companies adopted resilient ERM practices to gain business advantage visible in terms of cost efficiency and improving concentration of risks by exploiting niches and balancing portfolio risk by contrasting two different and opposite risks. Companies have improved cohesion and adaptability of risks but faced normative and behavioural resistance to change. The results indicated that adoption of revolutionary/evolutionary change is affected by institutional pressure within companies with an aim to survive in the market. Whether companies adopt evolutionary change or revolutionary change, the main objectives of the companies are to gain business advantage from the change so as to promote sustainability.