Responses to peer ERM Discussion 3
Week 3 Discussion
Venkata Madhu Manaswini Vinnakota
ERM
Enterprise Risk Management (ERM) is an emerging process that can serve many purposes: a tool for risk management, strategic planning, and identification of emerging opportunities and potential competitive advantages. The purpose of this case study is to describe the processes used by three different companies in different industries to illustrate the ways these companies have integrated ERM in the context of their strategy. These case studies are based on real-life examples of how companies have attempted to incorporate their ERM process within their strategic planning process. The three cases reveal the variety of methods that can be used based on a company’s strategic objectives, business model, culture, and maturity in ERM implementation. This report also highlights critical takeaways as points of comparison when assessing the level of integration between ERM and the strategic planning and implementation process.
Mitchell Industries Case study was very interesting. It provides a brief knowledge about information and technology. Mitchell Industries is a global aerospace, defense, and information technology company (Esa, Ibrahim, Salwa, Mohd Ishak, Riazi & Riazi, 2018). They provide a broad range of management, engineering, technical, scientific, logistics, and information services. The company was founded in 1985 and has grown organically and through several acquisitions. Headquartered in Chicago, Illinois, and incorporated in Delaware, the company conducts most of its business with the U.S. Government, principally the Department of Defense (DoD) and intelligence community. The company has 120 locations worldwide, including 72 international offices, approximately 24,000 employees, and customers in 150 countries. Overview of ERM Mitchell Industries views risk management as critical to its success. Risk management is embedded in business processes such as executive planning, program/contract management, research, and development, etc.
However, following the financial crisis, there was an increased focus on risk oversight practices (Muslih, 2019). Credit rating agencies, such as Standard and Poor’s, began assessing enterprise risk management processes as part of their corporate credit rating analysis. There were signs that new requirements would be placed on Boards of Directors regarding their risk oversight responsibilities. During this same time frame, the company appointed a new board member to chair the Audit Committee, who placed an increased focus on the company’s risk management practices. The organization’s leadership also began to see the need for a more formal enterprise-wide process for managing risk. All of these events led to the implementation of a legal structured ERM process in 2009.
References
Esa, Muneera & Ibrahim, Farah & Salwa, Siti & Mohd Ishak, Siti Salwa & Riazi, Salman & Riazi, Mehdi. (2018). Impact of Enterprise Risk Management on Organizational Performance. Journal of Advanced Research in Dynamical and Control Systems. 10. 190-197.
Muslih, Mochamad. (2019). The Benefit of Enterprise Risk Management (ERM) On Firm Performance. Indonesian Management and Accounting Research. 17. 171. 10.25105/imar.v17i2.4949.
