RISK MANAGEMENT

Enterprise - Wide Risk Management

Enterprise - Wide Risk Management

Introduction

In today's fast pace of competition all around the world, the organizations have to face great amount of challenges in dealing with their business operations. The organizations that develop effective strategies and approaches, keeping in view the risks that are associated with their businesses, are more likely to be successful in many business aspects among the competitors in the industries. The globalization around the world has also increased to the greater extent. The increase in globalization has provided the dynamic environment to the organizations and has created the uncertainties in the business environments. The organizations have to take business decisions in such uncertain situations while considering the possible and potential risks.

The risk management is an increasing concept in today's modern organizations. The concept of risk management involves analyzing the situation in the external and internal market situations. It also involves analyzing the potential risks that may be confronted to the organization in the future. The risk management allows the organizations to take such steps and to develop and implement such approaches and strategies that can minimize the potential risks and their negative consequences. The risk management is very vital and essential part of business management processes. The implementation of risk management processes in the business operations has given many benefits to most of the organizations. The risk management provides the organizations with the effective and potential returns. It allows the organization in eliminating and reducing the costs to the greater extent that may occur in the future due to risks. The organizations must understand the importance of implementation of the risk management in the business processes. The employees and other stakeholders of the organizations must also know that how to enumerate the tradeoffs of risk in opposition to the potential return in the business processes.

The following section aims at answering to the questions relating to the enterprise - wide risk management that is given in the assignment.

Answers to the questions

Question: 1

Definition of Enterprise Risk Management (ERM)

The enterprise risk management is an effective and efficient process of managing the potential risks within the organizations. In the enterprise risk management, the potential risks and the factors that cause the risks are carefully analyzed and based on the careful analysis; the risk alleviation programs are developed and implemented in the organizational business operations. The organization may confront to a number of risks in the internal as well as external environment of the business. The enterprise risk management assists the organizational authorities in taking effective decisions that ultimately reduces the risks. It provides the organizations with the strategies to manage the risks all over the organization. The enterprise risk management considers the aspects and interests of the shareholders that are directly and indirectly affected by the business processes and the business operations.

The enterprise risk management involves the risk minimizing strategies for all of the business management aspects which involves the financial aspects, operational aspects, the marketing aspects and the aspects related to ...