Risk Management and Governance at Sainsbury's: A Comprehensive Report

This report comprehensively evaluates enterprise risk management at Sainsbury's, highlighting the role and impact of governance, technology, and resilience. It explores Sainsbury's risk management objectives and the application of the COSMO ERM cube, detailing internal environment, objective setting, event identification, risk assessment, and risk response strategies. The report also discusses the potential benefits of effective risk management, emphasizing the importance of corporate governance principles, resilience processes, and the role of technology in Sainsbury's business model. It further examines recovery measures for negative risk impacts, showcasing Sainsbury's adaptability and strategic responses to challenges such as the COVID-19 pandemic, ultimately contributing to its sustained growth and reputation. Desklib offers similar solved assignments and past papers for students.

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.

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.
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. At sainsburry collaborative working
style is adopted which gives people platform, to bring the issues and report the problems. This
way a proper communication system is established.
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 build 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.
1.6potential benefits to business
It makes the Sainsbury as an organization to prepare for the circumstances in the
advance. It gives business an edge over others as business has a lot of risks attached to it. The

core activities of the business remains in proper positions because of the effective risk
management in the organization. It can not disrupt the supply chain management of the
Sainsbury even in difficult times.
ROLE AND IMPACT OF GOVERNANCE, TECHNOLOGY AND RESILLIENCE
1.1introduction
Dynamic business world contains many business dimension comparatively to the old
time business. Here corporate governance plays a vital role in the overall management of the
business as it detects the code of conducts which are crucial for the business. Technological
advancement has revolutionized the business in 21st century, as it has brought many challenges
and solution for the business organization.
1.2corporate governance principle established by business
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.
Governance makes the board of directors responsible for setting the vision, mission and
aims, and ensuring a right leadership which can bring the effectiveness (Stephen and et.al.,
2021). Also, keeping the management of the organization in right place and sharing every
information with the shareholders. Directors must ensure the compliance of such governance by
the employees and in case someone does not comply, the repercussions must be set. Various
committees should be made to focus on different areas if the organization.
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.
Government shows support to the organization as it complies with the regulations due to
good governance. For sainsbury, raising capital is easy due to the good reputation of the
company in the market which is lead by the governance. Taking various decisions in the

organization has been very easy in terms of adaptability as employees understands the
compliance. It improves the reliability in times of risk and mostly keeps the risk at bay.
1.3resilience processes & procedures for response to change
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.
In difficult times like recession many grocery stores went out of business but on the other
hand some businesses understood the environment and adapted the economies of scale to provide
goods in huge quantities which kept the business afloat (Yunis, Tarhini and Kassar, 2018). A
resilience business finds it easy to identify the problem and come to an adaptable Solution as this
gives company a problem solving approach.
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. e.g. Nobody gave importance to sanitizer the way everyone did in pandemic, companies
produced sanitizer in bulk and the resilience helped them in identifying the opportunity and
utilizing the same for profit maximization. Sainsbury sold many products which were in high
demand during covid times. Company has an adaptable approach which helped them improve the
reputation and revenues.
1.4recovery measures for negative risk impacts
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. Further, at Sainsbury technology is used to sell the products and services online.
In pandemic when covid hit the industry, companies turned their business model into
digital mode to sell the products online (Yean, Tan and Nadarajah, 2022). There are many
technologies driven businesses and innovation which has lead to the growth of the company.
This changed the way business used to operate. Further, to make the business efficient
companies use technological solutions to record transactions, billing etc. this makes the process
easy. Those companies who are adaptable towards the technology are more likely to have
sustainable and long term benefits.
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. At
Sainsbury's technology is used to know the trends, preference and taste of the customers by
maintaining strong database which keeps customers information, it makes it easy to achieve the
goal of the company.
Online shopping site of Sainsbury has positively impacted the profitability and revenue of
the company. As in difficult times like covid, it made the business easy and laso enhanced the
profitability. Also, such technology attracts various cyber threats and viruses which requires on
the companies part to keep strong cyber security which keeps the company's data safe. It incurs
cost to the businesses.
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
Books and journals
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.
Ganda, F., 2019. The impact of innovation and technology investments on carbon emissions in
selected organisation for economic Co-operation and development countries. Journal of
cleaner production. 217. pp.469-483.
Hoang, T., 2018. The role of the integrated reporting in raising awareness of environmental,
social and corporate governance (ESG) performance. In Stakeholders, Governance and
Responsibility. Emerald Publishing Limited.
Ivanova, D., 2019. Risk management and its contribution to sustainable development of mining
enterprises. In Scientific and Practical Studies of Raw Material Issues (pp. 182-190).
CRC Press.
Plesner, U. and Husted, E., 2019. Digital organizing: Revisiting themes in organization studies.
Bloomsbury Publishing.
Puni, A. and Anlesinya, A., 2020. Corporate governance mechanisms and firm performance in a
developing country. International Journal of Law and Management. 62(2). pp.147-169.
Raimo, N. and et.al., 2022. Corporate governance and risk disclosure: evidence from integrated
reporting adopters. Corporate Governance: The International Journal of Business in
Society, (ahead-of-print).
Stephen, K. and et.al., 2021. Investigating cognitive adaptability in new workplace cultures with
the Imitation Game.
Yean, T. F., Tan, F. C. and Nadarajah, D., 2022. Determinants of adaptability and its impact on
the change readiness of civil servants. International Journal of Public Sector
Management, (ahead-of-print).
Yunis, M., Tarhini, A. and Kassar, A., 2018. The role of ICT and innovation in enhancing
organizational performance: The catalysing effect of corporate entrepreneurship.
Journal of Business Research. 88. pp.344-356.
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