Enterprise Risk Management Case Study Class Capstone

Enterprise Risk Management Case Studythe Class Capstone Deliverable I

Enterprise Risk Management Case Study: The class capstone deliverable is a final project case study submitted during Module 4 of the class. In conjunction with the capstone, the student will also develop a PowerPoint presentation brief capturing the main concepts of their capstone project. The deliverable should be a minimum of 10 double-spaced pages that does not include the cover page or reference list.

Paper For Above instruction

Enterprise Risk Management (ERM) is a comprehensive and integrated approach to identifying, assessing, and managing risks within an organization to achieve its strategic objectives. It involves a systematic process that enables organizations to understand the various types of risks they face, evaluate their potential impact, and implement measures to mitigate or capitalize on these risks. The purpose of this case study is to explore the implementation of ERM within a specific organization, analyze its effectiveness, and provide recommendations for improvement.

The case organization selected for this study is a mid-sized manufacturing company operating in the automotive sector. This industry is characterized by its complex supply chains, rapid technological advancements, and regulatory pressures, which make effective risk management crucial for sustainability and competitiveness. The organization has recently adopted an ERM framework aligned with the COSO (Committee of Sponsoring Organizations of the Treadway Commission) Enterprise Risk Management – Integrative Framework, which emphasizes four components: governance and culture, strategy and objective-setting, performance, and review and revision.

The first step in the ERM process involved establishing the organization’s risk governance structure. This included defining roles and responsibilities, creating a risk committee, and integrating risk management into corporate governance. Leadership's commitment was vital, as it ensured that risk considerations were embedded in strategic planning and everyday operations.

Next, the organization conducted a comprehensive risk assessment to identify internal and external risks. Internal risks included operational failures, cybersecurity threats, and compliance issues. External risks encompassed economic fluctuations, supply chain disruptions, and regulatory changes. The assessment employed qualitative and quantitative techniques, such as risk workshops, SWOT analyses, and probabilistic modeling, to determine the likelihood and impact of each risk.

Once risks were identified, the organization prioritized them based on their potential impact on business objectives. High-priority risks, such as cybersecurity breaches and supply chain interruptions, received immediate attention, with the development of risk response strategies including risk avoidance, mitigation, transfer, or acceptance. For instance, cybersecurity risks were addressed by investing in upgraded security systems and conducting employee training programs.

The company also integrated key risk indicators (KRIs) and risk treatment plans into its operational processes. These KRIs serve as early warning signals to detect potential issues before they escalate. Monitoring and reporting mechanisms were established to ensure ongoing oversight and continuous improvement of the ERM program.

Despite these efforts, challenges in implementing ERM were encountered, such as resistance to change, lack of risk awareness among employees, and resource constraints. To overcome these obstacles, leadership promoted a risk-aware culture through training and communication initiatives, emphasizing that effective risk management is everyone's responsibility.

The case study concludes with an evaluation of the ERM program's effectiveness. While early results showed improved risk awareness and proactive management, maturity levels varied across departments. To enhance the ERM framework, recommendations include conducting regular training, integrating risk management into performance evaluations, and leveraging technology for data analytics.

In summary, this case study highlights the importance of a structured approach to enterprise risk management in navigating complex operational landscapes. It demonstrates that with strong governance, continuous monitoring, and organizational commitment, organizations can better anticipate threats and capitalize on opportunities, ensuring long-term resilience and success.

References

Arnold, V., & Walker, P. (2017). Enterprise Risk Management: How to Integrate and embed it into your organization. Routledge.

COSO. (2017). Enterprise Risk Management — Integrating with Strategy and Performance. Committee of Sponsoring Organizations of the Treadway Commission.

Fraser, J., & Simkins, B. (2016). Enterprise Risk Management: Today's Leading Research and Best Practices for Tomorrow's Executives. Wiley.

Lam, J. (2014). Enterprise Risk Management: From Incentives to Controls. Wiley.

Mallin, C. (2019). Corporate Governance. Oxford University Press.

Power, M. (2007). Organized Uncertainty: Designing a World of Risk Management. Oxford University Press.

Rims, T. (2020). Risk Management Frameworks and Strategies. Harvard Business Review.

Schwalbe, K. (2015). Information Technology Project Management. Cengage Learning.

Zsidisin, G. A., & Ritchie, B. (2009). Supply Chain Risk Management. Springer.

ISO. (2018). ISO 31000:2018 Risk Management — Guidelines. International Organization for Standardization.