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Enterprise Risk Management: Economic And Competitive Environments Essay Example

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Enterprise Risk Management: Economic And Competitive Environments

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Enterprise Risk Management: Economic And Competitive Environments. Enterprise risk management is beneficial to the business as it creates a teamwork methodology that includes Board governance, employees and mid-level and senior management so that the entire organization is engaged in identifying potential risks for the purpose of managing these threats to many different business units. Many organizations that have well-developed ERM programmes link risk management with sales and marketing, logistics, customer service, human resources, information technology, and manufacturing as well (Widup, 2010). What generally occurs in enterprise risk management is creating risk management teams that already specialize in their own business unit practices and assigns responsibilities to these groups who will then take proactive steps toward risk mitigation and report their findings throughout the entire organization, whether it is centralized or decentralized.

An ERM programme must take into consideration all business divisions in order to be successful. According to Mehta (2010, p.35), a common problem with ERM is that many organizations consider such programmes to be only effective in compliance issues and fail to identify risks attached to operational units. “If this happens, the CEO will inevitably lose interest, the program will not work and all efforts to implement ERM will be essentially futile” (Mehta, 2010, p.36). All of the literature on enterprise risk management seems to reinforce that without an entire business focus, risk management efforts will be unsuccessful and will not provide much long-term value to the organization.  One problem with ERM is that there are no solid benchmarks by which organizations can develop their own effective enterprise risk management strategy. A recent survey of 460 senior managers in multiple industries identified that 54.6 percent of respondents looked toward the COSO framework model for their ERM programmes, not always finding effective results through this benchmarking effort (Beasley, Branson & Hancock, 2010). . Enterprise Risk Management: Economic And Competitive Environments.

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References

Aon.com. (2010). [internet] Global enterprise risk management survey, AON Analytics. [accessed 3.3.2011 at http://www.aon.com/attachments/2010_global_ERM_survey.pdf]

Beasley, M., Branson, B. & Hancock, B. (2010). Are you identifying with your most significant risks?, Strategic Finance. 92(5), pp.29-36.

Casact.org. (2003). [internet] Overview of enterprise risk management, Casualty Actuarial Society, Enterprise Risk Management Committee. [accessed 3.6.2011 at http://www.casact.org/research/erm/overview.pdf]

Cavanaugh, B.B. (2009). Risking the enterprise, Best’s Review, Oldwick. 109(12), pp.44-48.

Chitakornkijsil, P. (2010). Enterprise risk management, International Journal of Organisational Innovation. 3(2), pp.309-338.

De La Rosa, S. (2007). Moving forward with ERM, The Internal Auditor. 64(3), pp.50-56.

Kimmel, B. & Anderson, G. (2010). ERM myths & truths, Financial Executive. 26(10), pp.48-51.

Kusserow, R. (2007). Enterprise risk management: the next evolutionary step in compliance, Journal of Health Care Compliance. 9(4), pp.53-55.

Lenckus, D. (2006). Industries continue to apply ERM plans successfully, Business Insurance. 40(19), pp.18-20.

Makomaski, J. (2008). So what exactly is ERM?, Risk Management. 55(4), pp.80-83.

Mehta, S. (2010). It’s time for ERM, Financial Executive. 26(9), pp.34-38.

Moody, M. J. (2009). ERM: clash of cultures, Rough Notes. 152(8), pp.26-28.

Moore, J.W. (2010). From phishing to advanced persistent threats: the application of cybercrime risk to the enterprise risk management model, The Review of Business Information Systems. 14(4), pp.27-37.

Muzzy, L. (2008). Approaching enterprise risk management, Financial Executive. 24(8), pp.59-62.

Widup, R.E. (2010). An ESRM model for brand protection, Security. 47(12), pp.38-40.

Appendix A: Value provided by ERM models

Source: http://www.ucop.edu/riskmgt/erm/documents/protiviti_faqguide.pdf

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