Report: Enterprise-Wide Approach to Risk Management Analysis

This report presents a comprehensive analysis of the enterprise-wide approach to risk management. It begins by highlighting the growing importance of risk management in both the public and private sectors, emphasizing the need for an integrated approach that goes beyond traditional operational risk management. The report defines the enterprise-wide approach as a process that systematically identifies potential events representing risks and opportunities, essential for achieving strategic objectives. It discusses the benefits of this approach, including enhanced awareness, improved decision-making, and increased operational efficiency. Key frameworks, such as KPMG and COSO-ERM, are examined to illustrate practical applications. The report also details the principles of enterprise-wide risk management, which includes a strategic business context, active risk management, and the creation of a risk-aware culture. Finally, several case studies demonstrate how organizations can effectively manage risk and achieve their goals by implementing this approach.

Case for an enterprise-wide approach to risk management 1
CASE FOR AN ENTERPRISE-WIDE APPROACH TO RISK MANAGEMENT
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Case for an enterprise-wide approach to risk management 2
Approach to Management of Risk
In present days, innovative approach to management of risk has gained considerable attention.
Many influential individuals such as politicians have demanded corporate governance as well as
better audit. Traditional approaches to risk management within different organizations have
focused on operational risk. Integrated approach of managing risk allows for the integration and
coordination of different processes of entrepreneurial risk management through the efficient and
effective management of the risks that are typical of processes of businesses while attaining the
performance expectations of different stakeholders. The approach to risk management helps in
assessing and prioritizing the dangers that are pertinent to operations of different businesses (Xu
2015, p. 769). The lack of inter-connections and communications within the operations of
companies result on the concentration to be placed basically on physical with economic
elements. Over long duration, organizations have begun to realize that the prominence on
management of risk before accumulating value as the command in the ever more spirited markets
and fast-varrying business surroundings (Liu, Zou, and Gong 2013, p. 1271). Therefore, primary
focus of this report is to examine situation for an approach of enterprise-wide to management of
risk in reference to both public and private sectors around global business society.
Approach of Enterprise-wide to management of risk
Peril, as a form of uncertainty, always causes severe implications of finance to business
operations and industries around global markets. Managing risk together with doubt has forever
been the dispute to any kind of operation among organizations as they endlessly try to do their
best for corporate superiority, while at similar moment alleviate risks and reduce possible loses
that can cause financial damage. In such regards, business and companies have apprehended the

Case for an enterprise-wide approach to risk management 3
usefulness and requirement of supervising risks on the venture-wide approach (Hyatali and Fai
2016, p. 87). The increasing concern over management of risk is not only regarding
organizations, but also society at large and individuals involved in operations. Therefore, risk
management is viewed as an essential device that enables the organization to develop towards its
goals and objectives. The idea is essential in strengthening the company’s corporate governance
and at the same moment to fulfill its obligation towards stakeholders. However, collapse to
advance the process of managing risk can result in harsh economic loss and harm to status. Such
occurrences will be replicated in assurance as well as belief of stakeholders. The launched of a
management concept on enterprise-wide approach is conceptualized in relation to different
dimensional models (Goodman 2018, p. 33). These models are always intending to integrate and
align corporate strategic objectives, structure of organization, and managerial reporting and
procedures of control. As many other different concepts, enterprise-wide model is presented in
management of risk by its graphic on three-dimensional cube.
Enterprise-wide approach
Approach of enterprise-wide to management of risk refers to process essential in identifying as
well as focusing on methodically the possible events that symbolizes risks to the accomplishment
of planned objective or to chances towards gaining of a competitive advantage. Management of
risk in different organization through this approach is essential (Allen and Allison 2018, p. 39). It
remains as a vital part of the tactical management of any corporation, while it should be
entrenched in the continuing operations of corporation. Some of the broadly referenced
guidelines for enterprise-wide approach in risk management include the committee that deals
with sponsoring organization. Moreover, significant basics of this approach are evaluation of

Case for an enterprise-wide approach to risk management 4
vital dangers together with execution of appropriate response of danger. Therefore, these risk
responses consist of acceptance or risk tolerance, avoidance or termination of the danger, transfer
of risk or sharing through insurance, the joint venture or another arrangement. Other responses of
risk through enterprise-wide approach include decrease or alleviation of risk through internet
managed measures or other activities of avoiding danger (Etges et al., 2018, p. 32). Other
important enterprise-wide response to risk management consists of viewpoint of risk or measure
of risk and customes of danger. The mentioned aspects are some of the terms of the approach to
dangers in operations of organizations and of the quantity of danger that the organization is ready
and keen to obtain. All these elements are just some of the vital aspects of governance
responsibility.
Overview of approach of enterprise-wide to management of risk
Approach of managing risk through venture-wide differ greatly from the traditional approach of
managing risk as the focus is concentrated on strategy of enterprise-wide. For achievement of
incorporated management of danger, every corporation needs to evaluate and measure all the
dangers that could possibly influence its worth (Clyde-Smith 2014, p. 331). Such strategies
remain is the main principle of venture-wide approach to management of danger as it ensures
that senior managers are focused in engaging on the uncertainties around the entire asset
portfolio of the corporation. Additionally, another concept of this approach relates to the
individuals that conduct as well as manages the process of risk management. Although the
enterprise-wide approach s the ultimate function of the board of different managers with the
support of senior management, it must be noted that for the approach to be enterprise-wide,
every worker from each level of the corporation must support the framework of managing risks.

Case for an enterprise-wide approach to risk management 5
However, without support of every individual into the process, the infrastructure of enterprise-
wide approach would be worthless. For instance, Hallowell, Molenaar, and Fortunato (2013, p.
117) reported that different companies need to be aware that they will need to be open as well as
flexible to any operational changes. Therefore, enterprise-wide approach to risk management can
change organizational behavior with the need for creating awareness that concentrates on
increasing buy-in as well as eventually driving the receipt of possessions all through the entity.
Enterprise-wide approach on risk management has several benefits in operations of
organizations. For instance, it leads to greater awareness concerning the risk that faces any
organization and the capacity to respond effectively (de Jongh and Erasmus 2014, p. 21). The
model of enterprise-wide also enhances the confidence concerning accomplishments of tactical
targets, improving agreement with regulatory, lawful, and covering needs. Another benefit of
enterprise-wide approach to management of risk is that it aids in increasing the effectiveness
together with efficiency of operations in different organizations. The approach ensures that
management is able to focus and motivate their organizations to capitalize on different emerging
opportunities. The approach ensures that management of companies is continually concentrating
on investing their scares resources in pursuit of promising investments and business operations
(Alzahrani, Qureshi, and Thayananthan 2017, p. 906). Therefore, through this approach of
managing risks, organizations stay to be capable of managing the business in the face of
constantly changing circumstances.
Risk management principles
Management of risk in different organizations remains to be procedure that is undermined by the
lay down of principles. Additionally, it requires being hold up by the arrangement that is

Case for an enterprise-wide approach to risk management 6
effective to organization along with its outer setting or framework. An initiative for profitable
supervision of risk needs to be balanced to the stage of danger in corporations (Richards 2013, p.
37). It needs to be associated with other operations of corporate, broad in its extent, fixed into
custom operations, along with active by being open to altering circumstances. The approach of
managing risks through enterprise-wide approach improve the initiative of process to deliver
outputs that comprise of compliance with applicable requirement of governance, assurance of
stakeholder in regard to the management of danger and improved process of arriving at
operational decisions (Smith 2015, p. 56). The impact or advantages associated with such
approaches comprise of more efficient operations, efficient tactics, together with efficacious
strategy.
The principles of managing risks through enterprise-wide approach can be represented as the list
of co-ordinate operations. There exist different alternative prescriptions of this approach, but the
components that are usually presented are many (Ogutu, Bennett, and Olawoyin 2018, p. 45).
These components consist of recognition or risk identification, evaluation of danger, responding
to significant risks, and control of resources, reaction planning, and reporting of risk
performance. The other component includes the monitoring of performance of danger and
reviewing of the risk management framework. Moreover, risk management goes in hand with
enterprise-wide approach principles (Hallowell, Molenaar and Fortunato 2013, p. 119). These
principles of enterprise-wide approach include consideration in the context of strategy of
business, active risk management, and creation of awareness of risk culture. Other principles
consist of comprehensive and holistic approach to management of risk, consideration of a broad
range of risk such as strategic, operational, financial, and compliance (Hustad 2017, p. 29). The

Case for an enterprise-wide approach to risk management 7
other essential principle of enterprise-wide approached in management of risk is the
implementation of the idea through the systems or framework of risk management.
Cases of enterprise-wide approach on risk management
There are several case studies on the approach of enterprise-wide in managing risk of different
organizations. Some of these studies consist of KPMG framework and COSO –ERM Framework
among other different approaches (Saffady 2016, p. 53). Existence of different framework has
made it clear that there is no single methodology that organizations and their management need
to follow in supporting their operations.
KPMG framework
The framework of KPMG maintains that enterprise-wide approach in risk management and its
strategy need to be intrinsically connected to the business strategy of an organization. Therefore,
risk portfolio development, optimization of risk, as well as gauging and checking happen in the
circumstance of different policies that are rooted in the arrangement of enterprise-wide approach
(Ogutu, Bennett, and Olawoyin 2018, p. 45). Such ideas ensure that management of risk is
embedded in the structure of an organization effectively and efficiently.

Case for an enterprise-wide approach to risk management 8
Figure 1: Enterprise-wide approach on risk management presenting the emerging model for
creating value for shareholders. A KPMG framework
COSO – ERM Framework
The framework of COSO – ERM on enterprise-wide approach in managing risk is presented in
more detail as it helps in introducing key terms of risk. The framework comprises of a matrix of
three dimensions in the form of a cube. The presentation in any organization reflects the
relationships that exist between four different objectives, seven varied components, and four
varied levels of organization (Xu 2015, p. 771). Moreover, the four objectives presented by this
approach include strategy that focuses on high levels of goals that are always aligned with and
supports mission of organization. Another objective is operations that are efficient and effective
on the manner that the useful resources. The other two objectives comprise of reporting that are
reliable and compliance that goes in handy with set regulations and laws. These categories in this

Case for an enterprise-wide approach to risk management 9
framework may be the responsibility of varied executives across the entity together with address
of varied requirements. Moreover, eight different components of this framework in enterprise-
wide approach in risk management include internal setting, objective setting, and identification
of event (Liu, Zou, and Gong 2013, p. 1272). The other components include assessment of risk,
response of risk, control activities, monitoring, together with information and communication of
the risk and its nature. Additionally, the four different organizational level of this framework of
enterprise-wide approach in risk management comprises of entity level, subsidiary, division,
together with business unit.
Figure 2: Enterprise Risk Management - Integrated Framework

Case for an enterprise-wide approach to risk management 10
From the above illustrations on the approach of enterprise-wide to supervising risk, it is evident
the approach is essential element that supports operations of an organization. The approach
comprises of vital processes and techniques used by different organization to manage their risk
and seize operational opportunities in order to attain their mission and objectives. Enterprise-
wide approach to management of risk offers great framework for management of risk (Córdova
and Yanine 2013, p. 247). Some of the frameworks illustrated above consist of process of
identification of specific events or circumstance useful in attaining the targets of organization.
From the discussion, it is evident that enterprise-wide approach to management or risk is useful
in describing risk-based approach useful in managing the enterprise and integrating their
concepts of internal control.

Case for an enterprise-wide approach to risk management 11
List of References
Allen, L. and Allison, K. (2018) ‘IG in U.S. Federal Agencies: Balancing Information Value and
Risk’, Information Management Journal, 52(5), pp. 38–40. Available at:
http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=131801978&site=ehost-live
(Accessed: 7 November 2018).
Alzahrani, A., Qureshi, M. S. and Thayananthan, V. (2017) ‘RFID of next generation network
for enhancing customer relationship management in healthcare industries’, Technology & Health
Care, 25(5), pp. 903–916. doi: 10.3233/THC-170934.
Clyde-Smith, J. (2014) ‘Utilising enterprise risk management strategies to develop a governance
and operations framework for a new research complex: a case study’, Journal of Higher
Education Policy & Management, 36(3), pp. 327–337. doi: 10.1080/01587919.2014.899051.
Córdova, F. M. and Yanine, F. F. (2013) ‘Linking Enterprise Flexibility to Strategic Options: A
Control Problem Approach’, Iberoamerican Journal of Industrial Engineering, 4(9), pp. 239–
260. Available at: http://search.ebscohost.com/login.aspx?
direct=true&db=aph&AN=94075390&site=ehost-live (Accessed: 7 November 2018).
de Jongh, P. J. and Erasmus, C. M. (2014) ‘Industry-directed training and research programmes:
The BMI experience’, South African Journal of Science, 110(11/12), pp. 17–24. doi:
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Etges, APB da S, Grenon, V, Lu, M, Cardoso, RB, de Souza, JS, Kliemann Neto, FJ and Felix,
E. (2018) ‘Development of an enterprise risk inventory for healthcare’, BMC Health Services
Research, 18(1), p. 1-56. doi: 10.1186/s12913-018-3400-7.

Case for an enterprise-wide approach to risk management 12
Goodman, S. (2018) ‘Aligning Privacy and IM Within the IG Framework’, Information
Management Journal, 52(2), pp. 30–35. Available at: http://search.ebscohost.com/login.aspx?
direct=true&db=aph&AN=128480940&site=ehost-live (Accessed: 7 November 2018).
Hallowell, M. R., Molenaar, K. R. and Fortunato, B. R. (2013) ‘Enterprise Risk Management
Strategies for State Departments of Transportation’, Journal of Management in Engineering,
29(2), pp. 114–121. doi: 10.1061/(ASCE)ME.1943-5479.0000136.
Hustad, E. (2017) ‘Knowledge Management in Distributed Work: Implications for Boundary
Spanning and its Designn’, Journal of Integrated Design & Process Science, 21(1), pp. 25–41.
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Hyatali, N. and Fai Pun, K. (2016) ‘Aligning Project Quality and Risks into Business Processes:
A Review of Challenges and Strategies’, West Indian Journal of Engineering, 38(2), pp. 81–92.
Available at: http://search.ebscohost.com/login.aspx?
direct=true&db=aph&AN=117139622&site=ehost-live (Accessed: 7 November 2018).
Liu, J. Y., Zou, P. X. W. and Gong, W. (2013) ‘Managing Project Risk at the Enterprise Level:
Exploratory Case Studies in China’, Journal of Construction Engineering & Management,
139(9), pp. 1268–1274. doi: 10.1061/(ASCE)CO.1943-7862.0000717.
Ogutu, J., Bennett, M. R. and Olawoyin, R. (2018) ‘Closing the Gap: Between Traditional &
Enterprise Risk Management Systems’, Professional Safety, 63(4), pp. 42–47. Available at:
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(Accessed: 7 November 2018).