Enterprise Risk Management - Desklib

Running head: ENTERPRISE RISK MANAGEMENT
ENTERPRISE RISK MANAGEMENT
Name of the student
Name of the university
Author note

ENTERPRISE RISK MANAGEMENT
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Discussion question
The report critically examined the different aspects of ERM (Enterprise Risk
Management) initiatives that are undertaken by the LEGO group with the objective of retaining
the sustenance of the same while making dynamic expansions in the European markets (Fraser,
Simkins & Narvaez, 2014). The risk management strategies that were followed by the
organization as broadly divided into four major elements relating to ERM, Monte Carlo
Simulations, Active Risk and Opportunity Planning and Preparation for uncertainty. On the other
hand, the risks were generally segregated under operational, financial, hazardous and other
miscellaneous risks that might affect the operations of the venture (Agustina & Baroroh, 2016).
In this relation, it has been noted that most of the elements of the risk mitigation strategies that
were followed by the organization focused on mitigating financial risks that might obstruct the
organization capability of increasing the profitability.
On the other hand, the colleges and universities have been perceive as isolated
organizations which have no relevance to profit making or non- profit making institutions.
Therefore, the governance structure and culture of the organizations greatly differed from the
corporates. However, the discrepancies that were faced by the organizations relating to risks
affected the capabilities of the organizations in maintaining the efficiency of the operations in
orientation with the needs of the venture. It has been noticed that the organizations changed from
a decentralized structure to a more concrete centralized structure for improving their skills of
implementing and reviewing through the application of ERM. It has been noted that the
increased accountability, external scrutiny, IT changes and increased levels of litigation are the
major risks that are being faced by the universities and colleges (Sum & Saad, 2017).
Therefore, in this relation, the organizations employ the ERM into practice with the objective of

ENTERPRISE RISK MANAGEMENT
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inducing specific leadership values and culture into practice with the objective of retaining the
goodwill of the organizations. Therefore, the major difference between the ERM implementation
between profit making organizations and the Higher Education environment are based on the
aspects of values that drives the sustainability of the business.
Annotated bibliography
Viscelli, T. R., Beasley, M. S., & Hermanson, D. R. (2016). Research insights about risk
governance: Implications from a review of ERM research. SAGE Open, 6(4),
2158244016680230.
The risk management initiatives that are undertaken by the organizations are specifically
based on the assessment and prioritization of the risks that might be encountered by the
organizations while operating in the different markets. Viscelli, Beasley and Hermanson, (2016)
stated in the research that the risk governance is currently considered as the topmost priority that
is being encountered by the entrepreneurs and the board of directors. The assessment of the
different risks based on the likelihood of occurrence and severity enables the governing bodies
aware of the different strategies that might be instilled by the same with the objective of retaining
the sustenance of the ventures. In this relation, the ERM based operations enables an
organizational management in assessing the likelihood and severity of a risk and thereby plan
effective measures for avoiding or mitigating the uncertainty.
However, Viscelli, Beasley and Hermanson (2016) noted that most of the board members
fail to identify whether the ERM processes are operating effectively or not. The lack of clarity in
the process design might affect the capabilities of the organizations in continuing with the
efficiency of the operations while operating in the different markets. The research by Viscelli,