Responses to peer ERM Discussion 3
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Reply to two peer post which is in the attachement, 150-300 words each. Please add more intext citations. Follow the APA format. Complete by Sunday afternoon
The two substantive posts will do at least TWO of the following:
Ask an interesting, thoughtful question pertaining to the topic
Answer a question (in detail) posted by another student or the instructor
Provide extensive additional information on the topic
Explain, define, or analyze the topic in detail
Share an applicable personal experience
Provide an outside source (for example, an article from the UC Library) that applies to the topic, along with additional information about the topic or the source (please cite properly in APA 7)
Make an argument concerning the topic.
At least one scholarly source should be used in the initial discussion thread. Be sure to use information from your readings and other sources from the UC Library. Use proper citations and references in your post.
Week 3 Discussion
Venkata Madhu Manaswini Vinnakota
ERM
Enterprise Risk Management (ERM) is an emerging process that can serve many purposes: a tool for risk management, strategic planning, and identification of emerging opportunities and potential competitive advantages. The purpose of this case study is to describe the processes used by three different companies in different industries to illustrate the ways these companies have integrated ERM in the context of their strategy. These case studies are based on real-life examples of how companies have attempted to incorporate their ERM process within their strategic planning process. The three cases reveal the variety of methods that can be used based on a company’s strategic objectives, business model, culture, and maturity in ERM implementation. This report also highlights critical takeaways as points of comparison when assessing the level of integration between ERM and the strategic planning and implementation process.
Mitchell Industries Case study was very interesting. It provides a brief knowledge about information and technology. Mitchell Industries is a global aerospace, defense, and information technology company (Esa, Ibrahim, Salwa, Mohd Ishak, Riazi & Riazi, 2018). They provide a broad range of management, engineering, technical, scientific, logistics, and information services. The company was founded in 1985 and has grown organically and through several acquisitions. Headquartered in Chicago, Illinois, and incorporated in Delaware, the company conducts most of its business with the U.S. Government, principally the Department of Defense (DoD) and intelligence community. The company has 120 locations worldwide, including 72 international offices, approximately 24,000 employees, and customers in 150 countries. Overview of ERM Mitchell Industries views risk management as critical to its success. Risk management is embedded in business processes such as executive planning, program/contract management, research, and development, etc.
However, following the financial crisis, there was an increased focus on risk oversight practices (Muslih, 2019). Credit rating agencies, such as Standard and Poor’s, began assessing enterprise risk management processes as part of their corporate credit rating analysis. There were signs that new requirements would be placed on Boards of Directors regarding their risk oversight responsibilities. During this same time frame, the company appointed a new board member to chair the Audit Committee, who placed an increased focus on the company’s risk management practices. The organization’s leadership also began to see the need for a more formal enterprise-wide process for managing risk. All of these events led to the implementation of a legal structured ERM process in 2009.
References
Esa, Muneera & Ibrahim, Farah & Salwa, Siti & Mohd Ishak, Siti Salwa & Riazi, Salman & Riazi, Mehdi. (2018). Impact of Enterprise Risk Management on Organizational Performance. Journal of Advanced Research in Dynamical and Control Systems. 10. 190-197.
Muslih, Mochamad. (2019). The Benefit of Enterprise Risk Management (ERM) On Firm Performance. Indonesian Management and Accounting Research. 17. 171. 10.25105/imar.v17i2.4949. Week 3 discussion
Arjun Jujjuri
ERM
Enterprise Risk Management
From the different cases I reviewed, one case study that was most interesting to me is the case study involving Eli Lilly. I found this case study interesting because it exemplifies some of the best practices for a good ERM. The first justification is that the company involved all key leaders in risk management project. Second, the company integrated the ERM and corporate strategy effectively. The company also have multidisciplinary team and this is very important in ERM because unlike any other type of risks, ERM involves risks affecting the enterprise and most enterprises could be so big that normal traditional risk management practices may not help (Do, Railwaywalla and Thayer, 2016). Eli Lillys case confirmed to me that indeed enterprise risk management requires a solid information foundation that reflects the entire enterprise, not just a single department or business area. By using all available external and internal information, cognitive platforms can extend the same analytical capabilities throughout the organization, achieving maximum visibility and greater opportunities through sharing and reusing information (Do, Railwaywalla and Thayer, 2016). The company also does well by educating employees on why they should treat ERM as a valuable undertaking that is likely to add value to the company (Florio, 2017). Lastly, I liked the fact that Eli Lilly treats risk identification as ongoing process. Indeed, Eli Lilly demonstrates that ERM not only requires the company to identify all risks it faces and decide on the risks to be actively managed, but it also involves having a working action plan.
I strongly believe that ERM is necessary in the contemporary organization. ERM is necessary for the contemporary organization because its victory determines the business enterprises life and health. If an organization fails to recognize risks to its existence, it will not be ready to face any risks (Kumar, 2019). Also investors choose the company they want to invest in based on their quality of ERM. They read the companys ERM to determine the risk profile and then choose whether the company is worthwhile or not.
References
Florio, C. (2017). Enterprise Risk Management and Firm Performance: The Italian Case. The British Accounting Review, 56-74.
Kumar, S. (2019). Importance of Enterprise Risk Management. Product Dossier.
Do, H., Railwaywalla, M. and Thayer, J. (2016). Integration of ERM with Strategy. Retrieved from: https://erm.ncsu.edu/az/erm/i/chan/library/Integration_of_ERM_and_Strategy_Case_Study.pdf
