Sample Essay on Enterprise Risk Management

Enterprise Risk management Essay

Outline

  1. Coordinated risk management
  2. Seeking cooperation among various departments
  3. Helps in managing organization total range of risk
  4. Provides concrete framework for effective managements and handling of uncertainties
  5. The key objective of enterprise Risk Management is providing clarity on shock resistance of an organization to its risks
  6. Helps in better management of uncertainties to ensure sustainability of the organization
  7. ERM became useful in 1970s through the model initiated by Gustav Hamilton of Sweden.
  8. First action of ERM came through a proposal of risk management circle by Gustav Hamilton which described interaction of vital elements within the risk management process
  9. Later risk managements was associated with financial risk management
  10. In 20th century most organizations engaged in risk management through purchasing an insurance cover
  11. Full linkage involves the integration of risk, financial and capital management in a manner that gives way to progressive recognition of the array of uncertainties facing an organization, collective impact on shareholder value, and individual value.

Draft with Corrections

Enterprise risk management is a vital process that ensures coordinated risk management through creating emphasis on cooperation among different departments in order to be able to effectively manage enterprise full range of risks as a whole (citation). In this management system, a concrete framework is established for effective management through harnessing opportunities as they arise and quick response to risk. ERM differ with other risk management practices in that it cuts across the whole organization in its risk analysis.

The main goal of risk management is to ensure clarity in understanding mechanisms of shock resistance that can protect the organization from uncertainties and ensure effective management of the enterprise (citation).

The history of ERM can be traced in 1970s major organizations began holistic approach of managing uncertainties. The proposal on “Risk Management Circle” created by Gustav Hamilton was a major step in implementation of ERM. Gustav Hamilton describes necessary element interaction that that involved control, assessment, communication, and financial processes. In 20th century, major organizations engaged in risk management process through purchase of insurance cover on certain risks. However, the growing need for enterprises to adopt better and comprehensive framework to handle all manner of uncertainties led to development of ERM (use correct spelling).

The importance of ERM cannot be over looked in any organizational set up. The benefits associated with ERM includes: more transparency in organizational processes, better financial managements including financial disclosure with better reporting and control requirement, supporting business sustainability and disaster preparedness, supporting globalization within a very competitive environment and ensuring regulatory compliance in the organization.

The benefits associated with ERM includes: alignment of risk appetite to corporate strategy, linking risks, growth and returns, ensure improvement in risk response, lower operational loses, ensure quick harnessing of opportunities and ensuring better deployment of resources. (paragraphing)

Final Essay

Enterprise Risk management

Enterprise risk management is a vital process that ensures coordinated risk management through creating emphasis on cooperation among different departments in order to be able to effectively manage enterprise full range of risks as a whole (Hoboken, 2013). In this management system, a concrete framework is established for effective management through harnessing opportunities as they arise and quick response to risk. ERM differ with other risk management practices in that it cuts across the whole organization in its risk analysis.

The main goal of risk management is to ensure clarity in understanding mechanisms of shock resistance that can protect the organization from uncertainties and ensure effective management of the enterprise (Olson & Wu, 2008).

The history of ERM can be traced in 1970s when major organizations began holistic approach to manage uncertainties. The proposal on “Risk Management Circle” created by Gustav Hamilton was a major step in implementation of ERM in the modern set up. Gustav Hamilton describes necessary element interaction that that involved control, assessment, communication, and financial processes (Hoboken, 2013).

In the 20th century, major organizations engaged in risk management process through purchase of insurance cover on certain risks. However, the growing need for enterprises to adopt better and comprehensive framework to handle all manner of uncertainties led to development of ERM.

The importance of ERM cannot be over looked in any organizational set up. The benefits associated with ERM includes: more transparency in organizational processes, better financial managements which includes financial disclosure with better reporting and control requirement, supporting business sustainability due to disaster preparedness, supporting globalization within a very competitive environment and ensuring regulatory compliance in the organization.

The benefits associated with ERM includes: alignment of risk appetite to corporate strategy, linking risks, growth and returns, ensure improvement in risk response, lower operational loses, quick harnessing of opportunities and ensuring better deployment of resources (Olson & Wu, 2008).

References

Hoboken, N.J (2013). Enterprise risk management: Today’s leading research and best practices for tomorrow’s executives: Wiley.

Olson, D. L., & Wu, D. D. (2008). Enterprise risk m