Please respond to each student and word count for each response 150 words with 2 scholarly sources and please cite sources.
Original question: In your own words, define what ERM actually is. Then, pick a scholarly work listed in Chapter 2 and briefly describe its philosophy and effects on the practices of ERM. Afterward, complete your Discuss post with a process you would implement into your organization that involved use of the Critical Steps for Value-Added Risk Management on pp. 47-48. Please use scholarly works to support your statements
Student 1 Juanita,
Enterprise Risk Management (ERM) is the process of identifying and strategically managing potential risks that may affect an organization (Fraser & Simkins, 2010). In comparison to traditional risk management, ERM is a comprehensive approach to risk management and focuses on managing all risks (Ogutu, Bennett, & Olawoyin, 2018). Likewise, Berry-Stolzle and Xu (2018, p. 159) add that ERM is a holistic approach to managing risk by “controlling and coordinating any offsetting risks.”
I have chosen James Lam’s, Emergence of the Chief Risk Officer (1997). In this article, Lam identifies three trends (broader dimensions of risk, the changing role of risk management, and regulatory oversight) that have driven organization’s to take a holistic approach when managing risk (Lam & Kawamoto, 1997). Likewise, Lam discusses the complexity of implementing a comprehensive risk management program. As stated by Lam and Kawamoto (1997), the amount of risk multinational organizations face, can threaten an organizations stability. Especially, in today’s global economy where it can be challenging to manage risk.
If I were to implement a process into my organization that used one of the critical steps for value-added risk management, I would first identify and list potential risks in terms of there impact on the enterprise and communicate my findings across business and risk functions. Next, I would break down the risks and establish risk management teams. Then, I would incorporate risk management into my regular strategic process and continually monitor, analysis and refresh risk information. Lastly, I would integrate an ERM strategy into the management system (Fraser & Simkins, 2010, p. 47-48).
Student 2 Connie,
Enterprise risk management (ERM) is defined as the all-inclusive approach to managing risks within an organization by setting objectives and strategies to overcome such risk. ERM involves all the management teams input from lower management to the board of directors and stakeholders. Each employee assumes responsibility for effective control practices of must acknowledge the importance of the risks related to their behavior. The awareness of risk must be made aware to all employees and the role that they play in minimizes risks taken (Braumann, 2018).
The scholarly work listed in Chapter 2 that I chose was Jeremy Bentham’s, the law of supply and demand. In a market economy, the law of supply and demand is a philosophy of the characteristics of prices established. Whenever there is a change in demand that increases due to a change in the price of a good, which results in a movement along the demand curve. Meanwhile, there is an opposite relationship between the quantity demanded and the price, so the variance of price would result in a decrease or increase in the amount demanded (Buechner, 2018). Therefore, in relations to enterprise risk management, the increase and/or decreases in prices could affect the amount demanded and in return affect the number of goods sold.
In reviewing the critical steps for value-added strategic risk management, the process that I would choose to implement within our agency would be using strategic risk assessments in developing strategy, strategic plans and strategic objectives (Fraser & Simkins, 2010). Through establishing interdisciplinary teams, leadership should contemplate how each strategy will motivate the organization to accomplish objectives, distribute funds and develop abilities These teams should be derived from a diverse group of individuals with the various skills and abilities (Lippuner & McDermott, 2017).
8 hours ago