Enterprise risk management
Enterprise risk management (ERM) happens to be a plan-based business approach that focuses on recognizing, assessing and making preparations for any risks, hazards or dangers that may hamper with a company’s operations and purposes. Therefore, the enterprise risk management approach recognizes and prepares for risks with an organization’s objectives. Enterprise risk management is a growing management discipline that has transformed together with the organization and regulatory aspect of the last decade. ERM is therefore essential since its achievement determines the organizational health and life.
Chapter 19 and chapter 22 use cases tend to be similar in that they both establish ways for risk management. The two case studies create ways for enterprise risk management, for instance, chapter 19 case about the Kilgore Custom Milling has numerous ways of dealing with the organization’s currency risks such as long term swap contracts. On the other hand, chapter 22 case concerning JAA Inc manages risks by establishing a governance system and forming a risk and strategy committee. Therefore, the two case studies focus on risk management by creating meetings for solutions.
Despite their similarities, these two case studies also have their differences in that the Kilgore Custom Milling is focused more on financial risks or cash flow management. Chapter 19 use case is more concerned with the currency connected cash flow problems and some additional concerns regarding the inflation differences as a result of currency volatility. The enterprise management team also happens to lack apprehension on the options required. JAA Inc. happens to focus more on maintaining market leadership, sustaining technology leadership and delivering quality services. Absence of strategic risk management results in numerous problems such as communication lost opportunities and declining quality; therefore, the workforce needs to get engaged in aggressive internal training.
I agree with the use case approach used to implement an enterprise risk management because ISO 31000 happens to offer a level of stability about economic pliability, professional honour and environmental and security results. In the era of uncertainty, ISO 3000 tends to be tailor-made for any company looking for clear guidance on organization risks management. Therefore, the objective of ISO 31000 happens to be to offer assumptions and generic specification on risk management.
The implementation of enterprise risk management is essential since its achievement recognizes the health and life of the business organization. Therefore, if a company fails to recognize risks to its existent, then it will get unprepared to face any risk incidents. Enterprise risk management also organizes risk management exercises in the company by regulating the devices, approaches and individual processes in tracking people project risks. I would change this reason on tracking individual’s projects for risk management since I believe that each person requires their only privacy and nobody should tamper with it.
I would implement the same enterprise risk management approach in my future organization because ISO 3000 focuses more on simplifying risk management into a point of clearly comprehendible and actionable specification, that should be easy to execute, despite the size, location or nature of business.