Please find below discussions and give reply’s for those discssions

Discussion 1

A product’s performance, including its reliability performance, reflects on the organization that designs, builds, and sells the merchandise. A poor reliability performance is a risk to the merchandise line and organization also. Enterprise risk management (ERM) identifies and discusses the potential events methodically that significant risks to the achievement of strategic objectives, or else the opportunities to realize competitive advantage (Weitzner & Darroch, 2010). The elemental elements of ERM are the assessment of serious risks and the implementation of suitable risk responses. Risk responses include tolerance or acceptance of a threat, avoidance of risk, risk transfer or sharing via insurance, a venture or other arrangement, and reduction of risk via control procedures or other risk prevention activities (Hopkin, 2018; Hoyt & Liebenberg, 2011).

There are many benefits to ERM like (1) well-organized use of resources, (2) improved focus and viewpoint on risk, (3) consistent risk reporting, (4) creation of a more chance focused culture for the organization, and (5) effective management of regulatory and compliance matters. ERM is like a difference-maker if it contributes to redesigning strategy beforehand of disruptive change (Norrman & Jansson, 2004).

Traditional risk management is more localized and features a specific aspect of handling the risks that affect the business. In contrast, ERM assumes a more extensive view with a broader scope on the danger factors that the corporate faces. ERM takes a special course and considers all the risks that a business or organization may face at some point, contrasting the normal process that only limits each investigation to a department or smaller business unit (Hopkin, 2018). ERM is an advancement of traditional risk management as it takes into consideration specific hazards that occur to enterprises within different departments. The standard risk management approach assesses the risks of various business areas separately. An equivalent risk may have spilled over effects on other departments, and if there’s poor communication between different departments, the difficulty goes unaddressed, and it will get worse. On the opposite hand, ERM can connect the risks and affect their cumulative effects across different areas.

While many organizations have qualified representatives, who are proficient in managing their individual functional risks, it’s a unique and highly profitable organization that manages risk across the enterprise. ERM programs help companies adapt, anticipate, and answer change. They also focus on management efforts and resources on the risks and opportunities that matter in terms of their impact on strategy and performance. The main goal of an ERM program is to know an organization’s tolerance for risk, categorize it, and quantify it. The settlement with an ERM process is financial savings, lower risk, improved sustainability, and stakeholder confidence (Hallikas et al., 2004).

References

Hallikas, J., Karvonen, I., Pulkkinen, U., Virolainen, V. M., & Tuominen, M. (2004). Risk management processes in supplier networks. International Journal of Production Economics, 90(1), 47-58.

Hopkin, P. (2018). Fundamentals of risk management: understanding, evaluating, and implementing effective risk management. Kogan Page Publishers.

Hoyt, R. E., & Liebenberg, A. P. (2011). The value of enterprise risk management. Journal of Risk and insurance, 78(4), 795-822.

Norrman, A., & Jansson, U. (2004). Ericsson’s proactive supply chain risk management approach after a serious sub‐supplier accident. International journal of physical distribution & logistics management.

Weitzner, D., & Darroch, J. (2010). The limits of strategic rationality: Ethics, enterprise risk management, and governance. Journal of Business Ethics, 92(3), 361-372.

Discussion 2

Enterprise Risk Management

Enterprise Risk management (ERM) refers to the ways and processes put in place by the management and the personnel in the organization to identify and manage the risks that may arise and give assurance of positive business continuity. Enterprise Risk Management focuses on the evaluation of risks and the actions to be put in place to prevent them (Lam 2014). It reduces uncertainty and aims at the achievement of goals by improving efficiency. Organizations that have ERM in place have attained a lot of benefits. One of the benefits of ERM is the financial benefit, which has been seen through reduced cost of funding and an increase in the profitability of the organization. The risk reports have also been made accurate through ERM. The infrastructural side of the organization has also benefited from ERM through the improved supplier and staff motivation, and the cost of operations which have been reduced. The reputation of the organization has been pushed to another level with ERM, and customer satisfaction has also been achieved.

Enterprise Risk Management is very different from the traditional way of managing risk as it is more advanced. The traditional way of managing risks does not capture all the risks involved in the business, but with ERM, all risks are well captured and evaluated (Hoyt & Liebenberg,2011). The traditional way of managing risks involves individual response, which will affect other areas of the business. Still, with ERM, the directors and personnel in an organization come together and evaluate all types of risks. The traditional way of risk management focuses mostly on risks that may arise as a result of internal operations, which may not be safe to the business, unlike the ERM, which will evaluate all the risks from internal to external environments of the business. ERM is the best tool that organizations can put in place to achieve their goals.

References

Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.

Hoyt, R. E., & Liebenberg, A. P. (2011). The value of enterprise risk management. Journal of Risk and insurance, 78(4), 795-822.