Risk and Decision Evaluation: A Case Study of Sainsbury's PLC

This report provides a comprehensive evaluation of enterprise risk management (ERM) at Sainsbury's PLC, a major UK supermarket chain. It examines the company's approach to risk assessment, including the application of the COSMO ERM cube and global standards like IRM and ISO 31000. The report details the internal environment, objective setting, event identification, risk assessment, and risk response strategies, including the 4Ts of risk management (Tolerate, Terminate, Treat, Transfer). It also analyzes control activities, information and communication, and monitoring processes within Sainsbury's. Furthermore, the report highlights the role and impact of governance, technology, and resilience on the company's operations and long-term success. The analysis covers how governance facilitates effective management, how technology provides a competitive edge, and how resilience enables adaptability to changing market conditions and disruptions. The report concludes with a summary of key findings and references relevant sources.

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