Techniques and Models in Enterprise Risk Management : Report
Added on -2020-07-22
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ENTERPRISE RISKMANAGEMENT
Table of ContentsINTRODUCTION...........................................................................................................................3Effective use of techniques and models in enterprise risk management.....................................3Key issues faced by firm in enterprise risk management............................................................5CONCLUSION................................................................................................................................5References .......................................................................................................................................7
INTRODUCTIONEnterprise risk management is a technique used by the small and medium enterprises tocontrol and monitor overall risk. It is essential of the small enterprises to manage risk because itcan cause damage to earnings and capital of the firm. Further, the report will analyse theeffective use of tools and techniques of risk management used by small and medium enterprisesto evaluate and manage uncertainties. The small and growing enterprise of UK uses thesetechniques in order to maintain the growth and development of the entity in the country. Hence,the report will analyse the literature review over the techniques and key issues faced byorganisation while managing risk. Effective use of techniques and models in enterprise risk management.According to Zhao, Hwang Pheng Low (2014), The small and medium enterprises shouldfollow the specific framework to control and manage risk which is a step wise process andincludes all the activities and operational of the firm. The steps are as follows:The companies should first focus on categorising the risk which can come across. Secondly the medium and small enterprises of UK should evaluate and measure theactivities and events which can affect the enterprise.In the third stage of risk management, the entity should be accountable to risk.Lastly, the firm should focus on analysing and implementing the risk managementactivities.In contrast, as per Chitakornkijsil (2010), the SME's of UK should use strategic tools likePestle and Swot analysis to monitor and control risks because these factors comprise both theenvironment of the organisations which helps them in making assumption to manage risk. In contrast, Charette (2010), has stated that analysing the risk from political, economic,social and legal environment can help the small enterprises in dealing with uncertainties andmanaging risk within the organisation. Furthermore, in contrary McNeil (2013), as stated that in order to control and measurerisk, small enterprises should focus on complying the operations and functioning of companywith legal framework of the country and the firm should also maintain the societal andenvironmental condition, quality of products, and its relationship with its customer. Moreover,the enterprises should ensure optimum utilization of resources which will reduce the wastage andwill further help in managing risk. Hence, the author states that professional decision making,
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