All case studies show the ways in which organizations have attempted to focus on Enterprise Risk Management while integrating it with their strategic goals/plans. The first case study on Mitchell Industries was most interesting because of their different approach they took when compared to the rest of the organizations. Mitchell always prioritized risk management but after the financial crises they appointed a dedicated team to oversee risk management and to help integrate it with the strategic goals as well as with business functional units. This helps to reinforce integrity while making decisions that affect the organization as a whole. If the risk management committee consists only of members that also functionally belong to certain functional units, like in the other case studies, there may be a chance to have short sightedness and miss out on holistic ERM and opportunities. A dedicated team will have ERM as their priority and make sure it aligns with the strategic goals and also drive awareness across the organization, like Mitchell did.
ERM is absolutely necessary in a contemporary organization because such organizations tend to have non-traditional operations. These organizations are often spread across a vast geography that require integration in terms of strategy and ERM. Contemporary organizations are also very dynamic and having ERM will help to maintain the pace of change without making compromises or facing adverse risks. With newer and modern organizations that handle Big Data and that are extremely advance when it comes to use of technology which is also not limited to a function or unit within the organization. Handling such advanced technology also requires a ERM to manage risks associated with compliance, security etc. Hence, ERM is undoubtedly required for the new age organizations to be able to enjoy technological benefits without facing adverse effects.
Jacobus, D. (2015). New Paradigm of Managing Risks: Risk and Control Self-assessment. Agriculture and Agricultural Science Procedia, 3, 32–34. https://doi.org/10.1016/j.aaspro.2015.01.008
Daisy Company is one of the interesting case studies given. The company implemented the ERM approach by adopting subcommittees of various departments where all the critical components of technology, process, legal, and market risks are brought under a single roof. One of the best ERM processes at Daisy Company, which needs to be implemented at any other organization, divides each branch of the organization into subgroups, followed by multidisciplinary members. The root cause of any business risks is identified effectively. The audit committee and other top-level executive’s involvement, such as CEO, CFO, and chairman involvement, show the top management support, the primary component of any ERM success. This review is conducted periodically. The company was able to identify the possible risks based on probable criteria and succeeded in taking any measures based on intensity, which are defined by the critical score (Do et al., 2016).
The Daisy Company has taken necessary actions to implement key risk indicators (KRI), analyzed every action template, and used them as key metrics to measure efficiency. At the same, the company also allocated funds separately to keep the process alive. Another key factor at Daisy’s regarding ERM implementation is its approach. The company is constantly improving its risk management process with a strong tone, involving multidisciplinary people, and continuous improvement. Aligning strategic goals with ERM addresses the business’s current issues and gives them opportunities to explore new opportunities in which Daisy Company succeeded (Do et al., 2016).
The contemporary organizational structure contains a fewer number of hierarchies and dynamics. In this functional organization, the employees often work as cross-functional teams, and the power is distributed. Whether it may be traditional or contemporary organizational structures, the risk is very common. Like in traditional, these types of companies are also necessarily required to have strong ERM, which binds all the teams and resources together towards common risks and shortcomings. In my view, more than ever, contemporary organizations are highly needed RM to solve various dynamic market risks and legal regulation issues according to new developments (Oh et al., 2007).
Do. H, Railwaywalla, M., Thayer, J. (2016). Integration of ERM with Strategy. Case Study Analysis. Poole College of Management, NCSU. Retrieved from https://erm.ncsu.edu/az/erm/i/chan/library/Integra…
Oh, Lih-Bin, Phua, Teck-Wee