Chapter 3: The Approach Mars Incorporated Used To I ✓ Solved

Chapter 3 Presented The Approach Mars Incorporated Used To Im

In what ways are the two organizations’ approaches to ERM similar? How do they differ? Choose one aspect of each ERM implementation from which the other organization would benefit and explain why.

Paper For Above Instructions

Enterprise Risk Management (ERM) has become a cornerstone for organizations seeking to identify, assess, and manage various risks in today’s volatile environment. Understanding how different organizations implement ERM can provide valuable insights into best practices and areas for improvement. This paper compares the ERM approaches of Mars Incorporated, a leading global manufacturer of confectionery, pet care, and food products, with those of the University of California Health System (UCHS), a major healthcare provider. While both organizations prioritize risk management, they do so in ways that highlight both similarities and differences.

Similarities in ERM Approaches

One notable similarity between Mars Incorporated and UCHS is their commitment to a systematic and structured approach to risk management. Both organizations employ risk assessment methodologies that include identifying potential risks, evaluating their impact, and developing mitigation strategies. For instance, Mars has implemented a comprehensive ERM framework that aligns with its organizational objectives, ensuring that all levels of the company are aware of and engaged with risk management processes. Similarly, UCHS utilizes an ERM framework that integrates clinical, operational, and financial risk assessments, fostering a culture of risk awareness across its health facilities.

Another commonality is the emphasis on continuous improvement and adaptability in both organizations. Mars reviews its risk management practices regularly to adapt to changing market dynamics, while UCHS conducts regular evaluations of its ERM systems to ensure they are meeting the evolving needs of the healthcare landscape. Both organizations recognize that risk management is not a one-time effort but rather an ongoing process that requires commitment and resources.

Differences in ERM Approaches

Despite these similarities, the approaches to ERM between Mars and UCHS differ significantly in their focus and implementation. Mars Incorporated’s ERM primarily emphasizes operational and reputational risks, reflecting its position in the consumer goods industry. The company places considerable importance on brand management and supply chain continuity, given the competitive nature of its market. On the other hand, UCHS emphasizes clinical and compliance risks due to the nature of healthcare operations. UCHS prioritizes risks associated with patient safety, regulatory compliance, and health information security, which are vital in providing quality healthcare.

Cultural differences also influence their approaches. Mars has a global corporate culture that encourages innovation and risk-taking, allowing for calculated risks in new product development. In contrast, the culture at UCHS is heavily influenced by a need for adherence to regulations and safety standards, leading to a more cautious approach toward risk-taking. This difference can impact how each organization views and addresses risks, with Mars being more open to adjusting strategies based on market trends and UCHS being more focused on stability and compliance.

Mutual Benefits

There are aspects of each organization’s ERM implementation from which the other could benefit significantly. For example, Mars could gain from UCHS’s rigorous focus on compliance and regulatory risks. Given the increasing scrutiny on consumer safety and environmental impact in product manufacturing, Mars could enhance its brand reputation by adopting more stringent compliance measures. By implementing a more structured compliance framework similar to that of UCHS, Mars could better prepare for regulatory challenges and bolster stakeholder confidence.

Conversely, UCHS could benefit from adopting Mars’s flexible risk-taking approach towards innovation and operational management. The healthcare industry is rapidly evolving, particularly with advancements in technology and changes in patient care models. By learning from Mars’s ability to navigate operational risks with a degree of flexibility and innovation, UCHS could enhance its service delivery and adapt more readily to changes in patient needs. For example, by fostering a culture that encourages responsible risk-taking in adopting new healthcare technologies, UCHS could improve patient outcomes and operational efficiency.

Conclusion

In summary, Mars Incorporated and the University of California Health System demonstrate both similarities and differences in their approaches to ERM. While both organizations recognize the importance of structured risk management and ongoing evaluation, their focal points diverge based on industry-specific challenges and organizational culture. By learning from each other’s strengths, there is potential for both organizations to not only enhance their ERM frameworks but also to achieve better overall performance and resilience in their respective fields.

References

  • Beasley, M. S., Branson, B. C., & Hinton, D. (2010). Enterprise Risk Management: An Empirical Analysis of the Factors Associated with the Adoption of ERM. Journal of Risk Management in Financial Institutions, 3(2), 151-170.
  • Frigo, M. L., & Anderson, R. J. (2011). Strategic Risk Management: A Foundation for Improved Decision Making. Business Horizons, 54(2), 27-37.
  • Insurance Institute for Business & Home Safety. (2019). The Role of ERM in the Public and Private Sector. Retrieved from: https://www.ibhs.org/
  • Kaplan, R. S., & Mikes, A. (2012). Strategic Risk and the Value of Enterprise Risk Management. Harvard Business Review, 90(6), 49-59.
  • Beaudin, L. (2020). Enterprise Risk Management in Health Care: The Need for Comprehensive Frameworks. Health Information Management Journal, 49(1), 3-9.
  • OECD. (2014). The Governance of Public Risk Management. Retrieved from: https://www.oecd.org/
  • Woods, D. J., & Bos, B. E. (2017). Risk Management in the Health Sector: An Overview. International Journal of Risk Management, 8(2), 102-110.
  • Crouhy, M., Galai, D., & Mark, R. (2006). Risk Management. McGraw-Hill.
  • McNeil, A. J., Frey, R., & Embrechts, P. (2015). Quantitative Risk Management: Concepts, Techniques and Tools. Princeton University Press.
  • IRM. (2022). Risk Management in Industry: Case Studies and Best Practices. Retrieved from: https://www.theirm.org/

Related Assignments