Today at the starting days of the 21st century, technology we are now living in the 21st and it brings with it enterprises with innovative, complicated technologies and everyone in an entity has some responsibility for enterprise risk management. The underlying premise of and Enterprise risk management (ERM) is that every entity exists to provide value for its stakeholders. Value is maximized when management sets strategy and objectives to strike an optimal balance between growth and return goals and related risks, and efficiently and effectively deploys resources in pursuit of the entity’s objectives. The purpose of risk management is to identify potential pitfalls or problems before they happen so that risk-handling actions may be put into place and enforced accordingly on the course of the product or project to prevent adverse outcome and minimize its effects on the enterprise.
Risk management objectives: Protect employees for hazards resulting to injuries or even deaths; Due attention given to cost of handling risks; Effective utilization of resources; and maintain good relationship with colleagues and the community.
1. Examine and discuss the benefits of risk management within an enterprise.
Risk management yields benefits to the employees, the project, and stakeholders / enterprise. Benefits are:
The Term Paper on Control and Risk Management
... Enterprise risk management (ERM) – A framework for risk management, which involves identifying particular events relevant and capable of affecting an organization’s objectives (both risks ... on the accounts, such as every fortnight. Benefits: • A more objective view of the company’s performance • ... A: Acceptance letter Appendix B: Entity Level Business Model Entity Level Business Model for Dragon ...
* Improve the identification of opportunities and threats.
* Encourage proactive management.
* Improve stakeholder confidence and trust.
* Minimize losses.
* Effectively allocate and use resources for risk treatment.
* Improve operational effectiveness and efficiency.
* Enhance safety performance and environmental protection.
* Improve loss prevention and incident management.
* Improve organizational learning ad resilience.
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2. Examine and discuss each of the following risk management components explaining how they relate to the overall role of the ‘risk management’ function.
Risk management is carried out as a holistic, organization-wide activity that addresses risk from the strategic level to the tactical level, ensuring that risk-based decision making is integrated into every aspect of the enterprise. There are eight pertinent risk management components that I have gathered, these are the following:
* Internal environment is the people, risk management philosophy and risk gusto, integrity and ethical values, and the environment in which they function as one.
* Objective Setting – objectives must exist before management can identify potential events affecting their achievement. A set of objectives must be in place and that the chosen objectives support and align with their mission and are consistent with its risk gusto.
* Event Identification
* Risk Assessment – A risk assessment is a careful examination of what, in the work, could cause harm to people, so that you can weigh up whether you have taken enough precautions or should do more to prevent harm. It not only helps one to evaluate the risk but also help in measuring and reviewing the risk.
* Risk Response – is to provide a consistent, organization-wide, response to risk by: developing alternative course of action for responding to risk; evaluating the alternative courses of action; determining appropriate courses of action consistent with organizational risk tolerance; and implementing risk responses (i.e., accepting, avoiding, mitigating, sharing or transferring risk) based on selected courses of action.
The Term Paper on Risk Management 3
... achievement of an organization’s objectives. ” Risk has many disguises. Inadequate risk management can lead to exposing ... structural network. This network enables quick response and automatic control reporting through the ... required to fulfill the action(s) in the Action Plan. Action Plans start the implementation ... and refining strategic planning. CIOs can improve the entire enterprise, their IT ...
* Control Activities – policies and procedures are established and implemented to help ensure the risk responses are effectively carried out.
* Information and Communication – pertinent information is identified, captured and communicated in a form and timeframe that enable people to carry out their responsibilities. Effective communication also occurs in a broader sense, flowing down, across, and up the entity.
* Monitoring – the entirety of enterprise risk management is monitored and corrections made as necessary. Monitoring is achieved through ongoing management activities, separate evaluations or both.
Enterprise risk management is not strictly a serial process, where one component affects only the next. It is a multidirectional, iterative process in which almost any component can and influences another.
