Running Head: ERM
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Enterprise Risk Management (ERM)
Instructor Name
Course
Date
ERM
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Enterprise Risk Management (ERM)
1. Discuss the events leading to the development of the concept of enterprise risk
management. Was the growth of ERM prompted primarily by an expansion of risk
management activities within corporations or was it forced upon firms by external
events?
The current economic crisis features the deplorable outcomes when risks related with
techniques and strategies are disregarded or ineffectively managed. coming out from the
emergency or a crisis is a significant calls for improvement within the organization.
Nevertheless, strategic planning is ideal for monitoring monetary emergiencies in that it overlook
deeply into small and large risks oversight with a specific accentuation on key risk management.
An enterprise risk management (ERM) is a strategic business approach for identifying,
planning, organizing, leading, and controlling activities in an organization to ensure that it
prepares for potential uncertainty that can disrupt if the risk occurs during organizational
operations (Majdalawieh & Gammack, 2015). Some of the factors considered in an ERM
include the people, regulations, and equipment/tools. Therefore, an individual can define ERM as
a framework that determines the responsibility of each individual, establishes repeatable
principles, and determines the type of tool for mitigating the risks.
One of the significant challenges in ensuring that risk management is adding value is to
incorporate ERM in business and strategic planning of organizations (Kerstin et al., 2014). The
"silos" that separate risk management capacities in an organization likewise make boundaries
that separate strategic planning from ERM. In many cases, risk management exercises are not
ERM
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connected or incorporated with key strategies, and premeditated risks can be disregarded, making
hazardous "blind spots" in strategy execution and risk management that can be cataclysmic.
The challenge, just as happenstance, for associations, is to embed risk thinking and risk
management expressly into strategy development and system execution cycles of the
organization so as to ensure that strategical methodology and risk outlooks are very much the
same (Fraser and Simkins, 2016).
ERM
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References
Fraser, J. R., & Simkins, B. J. (2016). The challenges of and solutions for implementing
enterprise risk management. Business Horizons, 59(6), 689-698.
Kerstin, D., Simone, O., & Nicole, Z. (2014). Challenges in implementing enterprise risk
management. ACRN Journal of Finance and Risk Perspectives, 3(3), 1-14.
Majdalawieh, M., & Gammack, J. (2015). An Integrated Approach to Enterprise Risk: Building a
Multidimensional Risk Management Strategy for the Enterprise.