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

EVALUATING RISK AND
DECISIONS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CRITICAL REFELECTION BASED ON ENTERPRISE RISK MANAGEMENT.................3
ROLE AND IMPACT OF GOVERNANCE, TECHNOLOGY AND RESILLIENCE.............5
SUMMARY.....................................................................................................................................8
REFERENCES................................................................................................................................1

1.1Introduction
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 examples will be incorporated highlighting the Sainsbury's risk
management and governance strategy. Company faces the risk of chain management.
1.2objective of risk management
The objective of risk management in the organization is to survive and stand out in times
of challenges. Also, company's brand image positively impacts if the business has proper risk
management plan in place. Risk management is the contemporary business plan in the times of
risk.
1.3enterprise risk management model and procedures
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. 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. At Sainsbury Cosmo cubes has three important columns of operations,
reporting and compliance. And five elements in the raw are control environment, control
activities, risk assessment, monitoring activities and communication information activities.
Let's understand each element in detail.
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. As, even a slight change can impact the working

and therefore sainsbury analyses the risk attached with these elements. e.g. competitors
providing goods at low prices may affect the sales of the business (de Araújo Lima and et.al.,
2020). Therefore, measures are taken to evaluate risk in advance.
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). Sainsbury's objective to
provide customers value for money goods and optimum quality food products has been set up by
the management knowing threats like competition and time management attached to it.
1.4practicle application
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. In case of
machinery malfunctioning at production house, company always identifies situations like this in
advance.
Risk assessment: Risk assessment forms the standards for which the risk is managed in both
external and internal environment. There are various risk lying in front of the sainsbury, and
sainsbury has prioritized some risks over others, risks which have a direct impact on the business
operations and probability has been kept by the sainsbury at the top so that such situations can be
immediately dealt with (Ivanova, 2019). Risks that are kept at the top by the sainsbury are
customer's negative feedbacks, change in buying patterns which negatively impacts the
company.
1.5outcomes
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.