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Enterprise Risk Management Discussion

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Running head: ENTERPRISE RISK MANAGEMENT 1
Enterprise risk management
Name
Institution

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ENTERPRISE RISK MANAGEMENT 2
Introduction
Enterprise risk management refers to the process of undertaking extensive research on the
potential activities that may bring challenges to strategic objectives mainly for purposes of
having a competitive advantage in the market. Risk management is considered as significant
prerequisite of strategic management in any organization. The primary objective of an ERM
process is the assessment of important risk and implementing the most appropriate risk responses
(Farrell & Gallagher, 2015).
ERM best practices
Among the risk responses that are often proposed include acceptance or tolerance of risk,
risk transfer or sharing through insurance, joint venture and internal control measures among
other activities. Major significant concepts with respect to ERM include the risk strategy, culture
and appetite. These concepts reflect attitude towards risk within an organization as well as the
degree of risk that an organization is likely to take (Tupa, Simota & Steiner, 2017). Furthermore,
management responsibilities with respect to enterprise risk management encompasses risk
architecture, protocols, training, monitoring and reporting.
Communication of risk by risk oversight committee begins with the process of
monitoring performance to identify risk, assess the risks, plan for response strategy and
implantation of mitigation processes before the committee monitors performance again (Grace,
Leverty, Phillips & Shimpi, 2015). Enterprise risk management plays a crucial role in
organization. For instance, ERM contributes to greater awareness regarding risks that hinder and
organization and its ability to response accordingly. Besides, it enhances confidence about the
achievements of strategic objectives.

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Running head: ENTERPRISE RISK MANAGEMENT Enterprise risk management Name Institution 1 ENTERPRISE RISK MANAGEMENT 2 Introduction Enterprise risk management refers to the process of undertaking extensive research on the potential activities that may bring challenges to strategic objectives mainly for purposes of having a competitive advantage in the market. Risk management is considered as significant prerequisite of strategic management in any organization. The primary objective of an ERM process is the assessment of important risk and implementing the most appropriate risk responses (Farrell & Gallagher, 2015). ERM best practices Among the risk responses that are often proposed include acceptance or tolerance of risk, risk transfer or sharing through insurance, joint venture and internal control measures among other activities. Major significant concepts with respect to ERM include the risk strategy, culture and appetite. These concepts reflect attitude towards risk within an organization as well as the degree of risk that an organization is likely to take (Tupa, Simota & Steiner, 2017). Furthermore, management responsibilities with respect to enterprise risk management encompasses risk architecture, protocols, training, monitoring and reporting. Communication of risk by risk oversight committee begins with the process of monitoring performance to identify risk, assess the risks, plan for response strategy and implantation of mitigation processes before the committee m ...
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