Evaluating Risk and Decisions for Sainsbury: Impact of Governance, Technology and Resilience

This report evaluates the risk management approach of Sainsbury, highlighting the impact and role of governance, technology, and resilience. It discusses the Cosmos ERM cube and the effectiveness of each element, along with the 4Ts of risk management. The report also sheds light on the positive impact of resilience and technology on the overall business aspect of the organization.

EVALUATING RISK
AND DECISIONS

Introduction
 The report of “evaluating risk and decision” will comprehensively illustrate the
enterprises risk management.
 Further the impact and role of technology, governance and resilience will be brought to
the light.
 The establishment chosen for this purpose is Sainsbury plc, founded in 1869, it is the
second largest supermarket chain in united kingdom.
 Sainsbury has brands like Habitat, Argos, Tu, Nectar and baking (Aleхseev,
Matyushkov and Pisarchik 2022).

CRITICAL REFELECTION BASED ON
ENTERPRISE RISK MANAGEMENT
 It is the continues process of planning, directing, organizing and controlling the
functions and activities of the business at Sainsbury's to control or minimize the
negative effects of risk on the profitability and capital.
 There are three global standards to consider for ERM in the organization, first is
IRM standards which focus on 4 main areas such as strategic, financial,
operation and hazard risk.

Continued
 Next is IS0 31000 frame work which highlights principles and process. Last one is
COSMO ERM cube.
 Cosmo ERM cube is a picture or diagram which establishes the relationship among
different parts of internal control system (Crowther and Seifi, 2018).
 This also shows how principal should be adapted by the sainsbury to meet the
objectives of internal control system.

Internal environment
 At Sainsbury's, control environment is a bunch of processes, standards and structures
which forms internal control.
 Internal business factors have a direct impact on the daily business activities.
 Sainsbury continuously takes into consideration the elements like customers, suppliers,
shareholders, competitors.

Objective setting
 : objectives should be set in advance which must be achievable and the threats and
risks attached with the objectives should be identified.
 ERM makes sure that such objectives set by the management following a process in
place.
 Such goals and objectives should be aligned with the risk appetite of the organization
(Ganda, 2019)(Hoang, 2018).

Event identification
 there are various events and actions which can lead to
the risky situations, such events and actions should
always be identified by the organization according to
the Cosmo cube.
 Sainsbury has large product portfolio and each product
has different production process attached to it.
 Such process of productions which has risk attached to
it should be identified in the advance so when the time
comes, company has easy to solve a foreseen problem

Risk assessment
 Risk assessment forms the standards for which the risk is managed in both external and
internal environments.
 Risks that are kept at the top by the Sainsbury are customer's negative feedbacks,
change in buying patterns which negatively impacts the company.
 There are various risk lying in front of the Sainsbury

Risk response
 there are multiple ways to deal with the risk. An optimum way to summarize such risk
response is through 4Ts of risk management. That are Tolerate, treat, terminate and transfer.
 Tolerate- there are some risk situations which needs no action. Here the risk attached is low.
Sainsbury's risk that is attached with seasonal deep in demand of some products does not
need an action.
 Terminate- the problems which are severe for the organization and activities causing it
should be stopped immediately. Like Sainsbury stopped the product line causing extreme
harm to the customers as it faced severe backlash from the society

Continued
 Treat- problem which needs actions that can reduce the
happening of it like cyber security threat lying with the
company's online business model needs an action which
can prevent happening of cyber attacks in the future
(Plesner and Husted, 2019).
 Transfer- there are some problems which can be
transferred to the third party platforms like payment issues
that happens in the company, should be left the payment
parties.

Control activities
 Control activities are detective and preventive policies, standards and procedures that
helps management in dealing with the risks.
 In order to prevent the bad things to happen in future company takes continues
measures to ensure this. Risk and situations like bad customers service at Sainsbury's
stores have control activities like training of employees which can treat such problems
(Puni and Anlesinya, 2020).
 Various detective and preventive policies have been established by the company to
prevent problems in advance.

Information and communication
 Communication and information relate to the data or
information gathered which can support internal components.
 A structured communication should be established in the
company which provide platforms to all to register the
problems.
 Over the years Sainsbury has felt the need to develop strong
communication channels which can keep the entire system's
problem on single facing radar

Monitoring
 Monitoring is a process that includes continues evaluation of the five elements working
correctly.
 At Sainsbury's, they practice continues evaluation of the five factors to ensure the
effectiveness of the business and if a problem comes it should be identified and solved
immediately which can be done by monitoring. Strong soft wares are built by the
company to evaluate the process constantly (Raimo and et.al., 2022).
 At sainsbury monitoring is done by the systems to evaluate production, delivery, supply
chain which are a great systematic threat to the company.

ROLE AND IMPACT OF GOVERNANCE,
TECHNOLOGY AND RESILLIENCE
Role of governance:
 The purpose of the governance is to facilitate an effective, entrepreneurial, prudent
management which can deliver in the long term growth and success of the company.
 At Sainsbury, It is a system which controls and keeps an organization on the right path of
success.
 Here board of directors are responsible for various stakeholders of the company.
 It is the role of shareholders of the Sainsbury's to appoint a director or board of directors
and auditors who ensures the in place governance structure of the company.

Impact of governance
 Governance plays a very important role in the organization.
 An effective governance brings in the accurate and timely record keeping which allows
company to make effective decision-making.
 A good governance makes stakeholders confident in the organization.
 Sainsbury is practising an effective governance in the organization since a long time
now and it has helped company in keeping healthy relations with the stakeholders.

Role of technology
 industry is witnessing a major technological revolution and many companies are using
this as an edge for the betterment of the company.
 Technology plays a major role in the business models nowadays.
 It has been observed recently in united kingdoms that technological advancements are
driving the business forces.
 Technology is used by Sainsbury to keep the strong database of the company which can
be used to provide the customer satisfaction.

Impact of technology
 technology has both negative and positive impacts on the businesses.
 If a company in current times does not have technological advancements in the
company and business models it becomes difficult to survive.
 As in times of competition a company requires some sort of edge and technology has a
positive impact on bringing edge to the business.

Role of resilience
 resilience defines the adaptability of the company and nature of the company to adapt
successfully which can lead to the growth and development of the company.
 A company's nature to adapt states the long term sustainability of the organization.
 Sainsbury has over the years made itself really adaptable to the environmental needs
which has helped the business flourish even in tough competition.
 It becomes easy for the top hierarchy to welcome the new and improved ideas of the
employees as employees know the adaptable environment of the company where their
creativity will be acknowledged

Impact of resilience
 resilience has always a positive impact on the overall business aspect of the
organization.
 It allows companies to quickly adapt in times of disruptions. It enforces the continues
business operations and maintains reputation of the company.
 Companies who could not adapt the pandemic environment had faced many
difficulties.
 Sainsbury used the Covid times to build a strong online customer base and even after
pandemic ended, online business is thriving.

Summary
 The above report of evaluating risk and decisions has illustrated the enterprises risk
management approach.
 Report has identified the cosmos ERM cube for the company's risk management.
 Sainsbury's ERM and the effectiveness of each element of cosmos ERM cube has been
discussed in detail.
 Further the impact and role of governance has been highlighted.
 At last the effect and role of technology and resilience has been shaded light on.

References
 Aleхseev, V., Matyushkov, V. and Pisarchik, A., 2022. Quality and risk management at
real economy enterprises. InterConf.
 Crowther, D. and Seifi, S. eds., 2018. Redefining corporate social responsibility.
Emerald Group Publishing.
 de Araújo Lima and et.al., 2020. Risk management in SMEs: A systematic literature
review and future directions. European Management Journal. 38(1). pp.78-94.