Behind the Façade: Unveiling the Reality of ERM

Sammanfattning

This study explores the practical implementation and managerial influence on Enterprise Risk Management (ERM) in a Swedish manufacturing firm. Although ERM frameworks such as COSO (2017) and ISO 31000:2018 are widely promoted, their real-world application often diverges from formal prescriptions, raising questions about their impact. This issue is particularly salient given that most prior research is centered around the financial industry, underscoring the need for more context-sensitive research. Adopting a qualitative single-case study approach and applying agency theory as an analytical lens, this paper examines how risk management is shaped by managerial discretion, internal control systems, and organizational culture. The findings reveal that risk management practices can be driven by intuition, experience, and informal delegation rather than quantitative measures or formal risk appetite. Moreover, the study highlights how ERM may serve as a symbolic tool, creating a façade of control whilst actual practices rely on interpersonal trust and selective oversight. By extending ERM research into the manufacturing sector, this paper contributes to a better understanding of risk management, revealing the tension between formal structure and interpretative managerial practices in shaping risk management.