Enterprise Risk Management Review

This assignment tasks you with conducting a thorough review of the existing literature on Enterprise Risk Management (ERM). It requires you to analyze various academic articles and publications that define ERM, discuss its implementation challenges, and highlight emerging research trends in this field. The aim is to critically assess the current understanding of ERM and identify areas for future research and development.

Enterprise Risk
Management

Table of Content
INTRODUCTION...........................................................................................................................3
Introduction of the organization..................................................................................................3
Aims of the organization.............................................................................................................3
TASK 1............................................................................................................................................4
Threats and opportunities for Tesco company.............................................................................4
TASK 2............................................................................................................................................6
Risk Management practices at TESCO.......................................................................................6
TASK3.............................................................................................................................................9
Risk Register................................................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
In present era, business organizations are performing their operations in more competitive
and complex environment. Risk management is a kind of process that is used by an enterprise in
order to minimize their risks. Through this, the firm will be able to grab the opportunities that
will lead them towards success (Hoyt and Liebenberg, 2011). By adopting risk management
strategies, they will be able to identify the challenges that are faced different stakeholders. So, in
this manner their overall needs and demands can be fulfilled. There are some elements in this
approach such as objectives, risk identification, assessment, response and monitoring. Through
this, they will be able to manage their overall operations such as to manage cost, making
effective decisions and so on. The present report is based on TESCO which perform their
operations in retail industry. In this context, report evaluates the risks and opportunities that are
faced by retail industry at their workplace. Further, it explains the actions that are performed by
an entity in order to resolve the issues.
Introduction of the organization
Tesco is an multinational retailer company which is incorporated in UK. This is the
world’s around third largest retailing organization which provide grocery to their targeted
customers. Tesco is founded by the Jack Cohen in 1919. This organization deliver various types
of goods and services to domestic as well as overseas customers in order to attract them and try
to earn large amount of money. It has around 7000 stores in all over the world. It provides to
employment to approx. 5,00,000 people. Tesco owned distributers, whole seller and retailer. It
can expand business in lots of countries in order to improve earning through they ae also to
improve their performance and work quality as well. This the multinational retailer which deliver
large verities of goods and services in the international market such as cloths, toys, books, petro
etc. It has large number of stores in around 12 countries in all world.
Aims of the organization
Tesco is one of the leading retail chains in United Kingdom which offer their services at
low prices than their rival firms. They provide high quality food to their customers so that they

can improve their brand image at global level. Every business organization set their vision and
mission statement so that a particular guideline can be set (Lam, 2014). There are some aims and
objectives of the retail industry such as:
 To maximize the sales and profitability in the market: In order to increase overall sales,
retail industry offer products at low price, special deals are offered to the end users.
Through this, they will be able to attract people towards their services and high revenues.
 To offer more healthy food products: This is the main aim of TESCO as through this they
will be able to attract more health conscious people towards their goods or services. So,
in this manner they will be able to fulfill the needs and demands of their customers.
 To sustain competitive advantage in the market: The retail industry focuses on their
online operations as through this they will be able to offer their services throughout the
world. Due to their sales can be increased and profits can be enhanced.
By creating a vision, an enterprise will be able to accomplish their goals and objectives in an
efficient manner. Along with this, TESCO can enhance their growth in the market as compare to
other competitors.
TASK 1
Threats and opportunities for Tesco company
There are many opportunities and threats for Tesco which having impact on the existence
of company and also able to define actual performance of the company. These factors are as
define below:
Opportunities:
Various types of opportunities for Tesco which are able to expand it business in
international market and improve their performance as well. The biggest opportunity is that, this
company has large number of store in lots of countries through which they are able to grow and
also gets an advantage to earn huge profit (Alviniussen and Jankensgard, 2015). It produce
various types of goods and services and deliver them in the international market. Through which
are able to attract targeted customers and improve their over all performance as well. It has been
growing online shopping in the UK market. Exploring its business in India and get fruit return
with this. Use various types of marketing tools and techniques in order to introduce their goods
and services in other places. They needs to set cheap price of their products and services for
attract people because most of the people want to select which are cheaper in price. This process

can able to increase sale and improve presence image in market. Other opportunities like global
operations such as online shopping and joint venture etc. This company also contribute in the
economic growth of the country through provide employment to large number of people and also
able to provide better working to them as well. They needs to increase presence in the industry of
financial services. Also big and important opportunity is improving the effectiveness of the
marketing strategies (Sodhi, Son and Tang, 2012). Here list of some opportunities for Tesco
which area as follows:
 Expansion of strategies in international market.
 Enhancing presence in the industry of international market.
 Improve range of non-food retail.
 Rapidly grow in the international market through around 1 million people are
using goods and services of Tesco.
 With the help attracting new customers company can able to improve sale as well
as minimize cost.
 The main focus of the company is global expansion with the entry in the new
countries.
 Increase international market presence and earn large amount of money.
 Contribute in the growth of economy of UK by providing employment to lots of
people.
 Distribute verities of goods and services to its targeted customers.
Threats:
Tesco faced large number of threats in the international market. In today’s world Tesco is
world’s largest retailer company so that they have to face competition in the market which
increase day by day (Farrell and Gallagher, 2015). Its competitors such as Sainsbury, ASDA etc.
Usually, threats are able to decrease the performance of company and also drag the profit margin
as well. Through this more of the customers they loss and not able to attain their corporate goals
and objectives. Through this they are not able to expand their business in international market.
Larger competition in UK is the biggest threat for Tesco which is able to reduce their
performance but company have to face it for survive in the international market. Rising pricing
of raw material is having impact on the services of the Tesco or food and non-food profits
margin as well. Resources which are used in the organization continuously among them is also
having on them. These resources are like human resource management, marketing essay etc.
Changes in the consumer buying patterns are also having impact on them. Because in this
situation customers are changes their taste and shift on the other goods and services. Changes in
sources to some locations regarding exporting restriction on various food and non-food items are

able to reduce the level of margin. Usually, customers are not select higher prices so that,
through which sale of the company is not even increase and will reduce the profit margin.
Economic crises are able to decrease the performance of organization through companies are not
even grow. When firm expand their business in any new country that time lots of challenges are
have to be face by them which is the biggest threat for them (Woon, Azizan, and Samad, 2011).
Current competition for them is increases day by day which is not beneficial for them. This
factors is also related with the income of people. Through continuous decrease the income of
people are able to reduce their revenue in that that customers’ purchasing power is also become
down. If Tesco only contribute in UK rather than expand business in another developing country
in that thy are not able to sale goods and services. Greater range of competition is not beneficial
for them. Reduce the level of income is caused increase employment level which can adversely
impact on sale of company of particular food and non-food items. Currency fluctuation in the
market is also becomes the threat for them which are able to reduce their performance. Problems
which are related to ethics are also consider as treats for them.
TASK 2
Risk Management practices at TESCO
When an organization perform their operations in the market then they faces some of the
risks and challenges. Due to these kinds of risks, they will not be able to enhance their growth in
the market (Banerjee, 2016). For this, TESCO perform some of the risk management practices at
their workplace so that overall risks can be minimized. On the basis of these types of
management approaches, the retail industry will be able to maintain their position at the
marketplace.
Risk management is a process through which the retail industry will be able to identify,
assess and control the threats. These risks can be arises from some of the resources like financial,
project failures, natural causes, credit risks. By adopting these management practices, an
enterprise can enhance their capital and grab the set of right chances so that their overall
performance can be improved. This overall process is related to the threats and opportunities.
Threats are the characteristics of the firm which can degrade their performance and through the
opportunities they will be able to sustain their competitive advantage at the marketplace. TESCO
follow some of the strategies so that their overall threats can be minimized and brand image can
be improved.

There are some threats of TESCO which can degrade their performance. Some of these
are like they will not be able to maintain their cost leadership in the market than any other rival
firm. Currency is fluctuating from time to time as this may affect their performance and they will
not be able to achieve their goals (McShane, Nair and Rustambekov, 2011). The third risk of
retail industry is related to the ethical problems as due to this their numbers of customers are get
reduced (Blome and Schoenherr, 2011). Economic recessions and government policies are also
act as risk for TESCO. Consumers demands are changing continuously so due to this the
performance of retail industry is get influenced.
Some of the opportunities are there in the market as through this the retail industry will
be able to achieve competitiveness. Tesco can use expansion strategy in order to offer their
products at international level. Along with this, the industry can also provide non-food items to
their customers. An organization can grab the opportunities that are related to strategic alliances
and joint ventures. Through this, they can easily perform their operations in another country. The
organization can conduct environmental audit and internal analysis in order to identify their
position in the market than their competitors. On the basis of this kind of analysis, they will be
able to evaluate their risks and grab the opportunities so that their growth can be improved.
In order to reduce overall risks, Tesco uses a systematic process which involves some
steps. On the basis of these, the higher authority of an enterprise can achieve their goals and their
overall growth can be enhanced (Paape and Speklè, 2012). The retail industry recruits the most
skilled person so that they can identify and minimize the overall risks at the workplace. Some of
these steps are:
Identify the risk: In the first step, the higher authority can identify the potential risks that
are faced by an organization. When risks are identified then by using the assessment technique
they will be able to priorities the threats so that their effective solutions can be assessed. Through
these, overall threats can be managed in an effective manner.
Analyze the risk: When risks are identified then in the second stage, manager analyzes
the consequences of the risks. Along with this, the nature and their effect is identified that how
goals are not achieved due to these threats. Further, the higher authority included this
information into their risk register so that their outcomes can be achieved (Bromiley and et. Al.,
2015). When risks are get analyzed than it will become easy for TESCO as they can resolve their
issues in an efficient manner.

Evaluate or rank the risk: In this step, higher authority of TESCO will evaluate the
risks and set their rank so that their solutions can be identified. In this, the retail industry will be
able to identify that how much these risks can affect the growth of an enterprise. Further, this
also added into the risk register of the management.
Treat the risk: Here, at this stage an appropriate plan is made by TESCO in order to deal
with the risks that may affect their performance and brand image. The project manager makes the
strategies for the highest ranked threat so that their growth can be enhanced (Arena, Arnaboldi
and Azzone, 2011). On the basis of this, they will be able to minimize their overall risks and grab
the opportunities so that they can sustain their competitive advantage in the market.
Monitor and review the risk: At the last stage, risks are reviewed or monitored by using
the data of risk register. Through this, the overall risks and threats can be managed in an efficient
manner. Along with this, all the required changes can be implemented at the workplace so that
their overall growth can be improved. If some changes are identified in the process of risk
management then business expertise leader can adopt those changes so that overall objectives
can be achieved in an efficient manner.
Figure 1: Risk managment stages, 2017

This is the overall risk management process of TESCO as through this they will be able
to reduce their threats. When these risks are managed than the performance and growth of retail
industry can be improved so in this manner their brand image can be improved. Further, the
overall activities can be administered in an effective manner.
TASK3
Risk Register
Risk register is a kind of risk log which is used by an enterprise in order to store the data
of all types of threats. It is a vital tool or technique that plays an important role in enhancing their
performance. Along with this, they can track risks and address the issues that are arising at the
workplace. On the basis of these, project researcher will be able to know about the present risks
through which their overall performance is getting affected (Segal, 2011).
In this risk register, all the information is included related to the type of risk, their priority
and strategies that are used by the project leaders so that high priority issues can be resolved in
an efficient manner. Through this, a clear picture of risk assessment can be produced so that they
can identify the affect of threat over companies brand image and the demands of the different
stakeholders.
A priority should be set in order because all risks may not have same effect over the
company’s performance. So, in the manner they have to identify the risk which is at highest level
so that overall operations can be managed or administered (Tang and Musa, 2011). Risk matrix
can be used by the firm in which they can include the scoring so that likelihood of risks and their
impact can be analyzed.
Rating Likelihood Impact of risks
1 Very likely Negligible
2 Unlikely Small
3 Possible Adequate
4 Likely Frightful
5 Very likely Grievous

If risk rating are in between 0-10 then no actions are required and is rating is from 10 to
20 than Changes should be monitored so that risks can be resolved. Along with this, if rate is in
between 20-30 then risks have to be managed in an efficient manner.
Ri
sk
n
u
m
be
r
Risk description Existing control Li
ke
li
h
o
o
d
(1
-
5)
Imp
act
(1-
5)
Ris
k
rati
ng
Mitigation action
1 Regulation, policies
and local government
rules.
Tesco operates in so
many countries so it
have to follows all
rules and regulation
which are framed by
the government of UK.
Otherwise they have to
pay penalties which are
able to damage their
performance and profit
margin as well (Smit,
and Watkins, 2012).
If organization
violation any rules this
is not beneficial for
them or else they face
some complications as
well.
It’s a challenging for
Tesco to comply
with mentioned rules
an regulation
through which are
not easily survive in
the international
market. Corporation
have to be actively
participate in those
policies otherwise it
may cause to its
performance.
3 4 22 In order to
development of
regulatory compliance
companies needs to
hold the adequate
information which help
them to get perfect
outcome. They needs to
collect data collection
mechanism and also
have to managed them
properly.
2 Currency fluctuation.
When Tesco expand its
business globally that
they have to deal with
various other countries.
This factor having
negative impact on
their performance. It
also having impact on
their revenue margin as
Company opted
various different
prices strategies in
which they can
provide their goods
and services in
international market.
4 4 25 The organization mat
able to avoid currency
fluctuation (Yazid,
Hussin, and Daud,
2011). These risk they
have to face them and
try to get best possible
solution for it.

well.
3 Changes in customer
taste.
According to the
change of climate or
other things customers’
demand are also
fluctuate which having
negative impact on the
performance of
company (Wu, Chen
and Olson, 2014). Due
to change in demand it
cause reduce or
decrease the sale of
Tesco and they are not
able to earn profit.
Company needs to
provide goods and
services according to
their taste and
demand. Through
this they can able to
attract large number
of customers and
increase sale as well.
5 3 28 Firstly, they needs to
analyses risk then take
effective action in order
to resolve problem.
Tesco needs to use
innovative ideas and
framed some plans and
implement them
(Hallowell, Molenaar
and Fortunato III,
2012). Through this
they can reduce risk
and try to avoid
complications.
Opportunities
number
Description Enhance to enhance opportunities
1. Tesco can use expansion strategy
in order to perform their
operations at the international
level. Through this their overall
brand image can be improved.
In order to enhance their growth
the firm performs strategic
analysis and joint ventures. So, in
this manner they will be able to
enhance their technological
advancements. Through this,
TESCO will be able to offer
innovative and quality services to
their customers.
2 Tesco can offer non items to their
customers so that they can
establish their business into
another sector.
When an enterprise offers their
products and services into another
sector then through this their
overall performance can be
improved. For this, the retail
industry can identify the
approaches that are followed by

the competitors.
CONCLUSION
On the basis of above report it has been concluded that, enterprise risk management is
stated that every company manage their risk level through which they can able to reduce it.
Through this Tesco is able to meet their set of target and goals as well. Risk assessment is play
an important role in every organization. Managers and leaders are able to improve risk and try to
put company in the profitable position. In case of risk practices they have to follow some steps.
Steps such as firstly they needs to identify risk and assessment through which they easily identify
the problems. Opportunities are able to improve their performance. Tesco expand its business in
new countries this is the biggest opportunity for them through which they can easily survive.
Rapidly grow in the international market. Through this factor companies can rapidly grow in the
international market. Tesco is an multinational retailer and provide varieties of goods and
services to their targeted customers. This is the largest retailer in the world which provide large
of products in various countries. Threats for Tesco are able to reduce their performance and
revenues as well. The biggest threat is increasing competition in the market. As the world’s
largest retailer Tesco face large number of competitors such as ASDA, Sainsbury etc. These are
also retailing companies which are able to increase competition. If organization are identify their
opportunities and threats then they can easily achieve their set of target and objectives as well.
Managers and leaders are responsible to manage risk assessment of the company and try to
provide best possible solutions for it. In the risk practices they needs to follow some steps in the
timely and effective manner. With the help of identification of opportunities and threats
companies can minimize the cost and maximize the return or profits margin as well. They needs
to expand business in various other countries in which they can attract large number of people
and able to provide best customer services to them.

REFERENCES
Books and Journal
Hoyt, R.E. and Liebenberg, A.P., 2011. The value of enterprise risk management. Journal of risk
and insurance. 78(4). pp.795-822.
Lam, J., 2014. Enterprise risk management: from incentives to controls. John Wiley & Sons.
Banerjee, B., 2016. Enterprise Risk Management. The MA Journal. 51(3). pp.66-72.
McShane, M.K., Nair, A. and Rustambekov, E., 2011. Does enterprise risk management increase
firm value?. Journal of Accounting, Auditing & Finance. 26(4). pp.641-658.
Paape, L. and Speklè, R.F., 2012. The adoption and design of enterprise risk management
practices: An empirical study. European Accounting Review. 21(3). pp.533-564.
Bromiley, P. and et. Al., 2015. Enterprise risk management: Review, critique, and research
directions. Long range planning, 48(4), pp.265-276.
Arena, M., Arnaboldi, M. and Azzone, G., 2011. Is enterprise risk management real?. Journal of
Risk Research. 14(7). pp.779-797.
Segal, S., 2011. Corporate value of Enterprise risk management: the next step in business
management (Vol. 3). John Wiley & Sons.
Tang, O. and Musa, S.N., 2011. Identifying risk issues and research advancements in supply
chain risk management. International journal of production economics. 133(1). pp.25-34.
Alviniussen, A. and Jankensgard, H., 2015. Enterprise risk budgeting: bringing risk management
into the financial planning process.
Sodhi, M.S., Son, B.G. and Tang, C.S., 2012. Researchers' perspectives on supply chain risk
management. Production and operations management. 21(1). pp.1-13.
Farrell, M. and Gallagher, R., 2015. The valuation implications of enterprise risk management
maturity. Journal of Risk and Insurance. 82(3). pp.625-657.
Woon, L.F., Azizan, N.A. and Samad, M.F.A., 2011. A strategic framework for value enhancing
enterprise risk management. Journal of global business and economics. 2(1). pp.23-47.
Blome, C. and Schoenherr, T., 2011. Supply chain risk management in financial crises—A
multiple case-study approach. International journal of production economics. 134(1).
pp.43-57.
Smit, Y. and Watkins, J.A., 2012. A literature review of small and medium enterprises (SME)
risk management practices in South Africa. African Journal of Business Management.
6(21). p.6324.
Yazid, A.S., Hussin, M.R. and Daud, W.N.W., 2011. An examination of enterprise risk
management (ERM) practices among the government-linked companies (GLCs) in
Malaysia. International Business Research. 4(4). p.94.
Wu, D.D., Chen, S.H. and Olson, D.L., 2014. Business intelligence in risk management: Some
recent progresses. Information Sciences. 256. pp.1-7.

Hallowell, M.R., Molenaar, K.R. and Fortunato III, B.R., 2012. Enterprise risk management
strategies for state departments of transportation. Journal of Management in Engineering,
29(2), pp.114-121.
Online
Enterprise risk management (ERM). 2017. [Online]. Available through:<
http://searchcio.techtarget.com/definition/enterprise-risk-management >. [Accessed on
23rd April 2017].
What are the five steps to risk assessment?. 2017. [Online]. Available through:<
https://worksmart.org.uk/health-advice/health-and-safety/hazards-and-risks/what-are-
five-steps-risk-assessment >. [Accessed on 23rd April 2017].