Economic

Re1

REPLY 1Mars Incorporated adopted the ERM system as an initiative to drive is objectives towards better business management which could lead to growth, improve earnings, and improve its cost targets. Due to a lack of experience, the corporation requested assistant from two vendors. To decide on the best ERM system as proposed by the two different vendors, a survey was conducted targeting the managers within the corporation and workshops with several consultants. The process puts into account various risk management aspects which helped shed light on the best approaches to implement in the ERM program.Upon the success of the pilot workshop, the corporation developed a multifunctional team in to the organization to implement a full-scale ERM system. The corporation’s ERP system mission statement aimed at providing the company with a proven, sustainable framework that can lead to an understanding of complex business risks emerging and in existence. The primary principles adopted by Mars ERM include value creation, leveraging on the firm’s strengths, work with the existing organizational structures, encouragement of accountability and alignment, and always view risks as opportunities. Due to its international operations, the system was rollout at a global level (Malki, & Aldwais, 2019).The team responsible for implementing ERM system at the University of California health systems is the president’s office of the risks. The main objective of the ERM system at the University of California aims at reducing costs, managing risks, and improving safety. ERM system was adopted to a progressive initiative to help in decision making by the COSO internal control and integrated framework. The institution has an experienced chief risk officer who is in charge of the risk management aspect. The institution’s ERM program is based on the KPI. The institution has also embraced technology to support its ERM program through the ERMIS. The University of California has also encouraged the stakeholders to embrace risk-aware culture by allowing people to actively manage their risks through my managed risk portal. The institution has also integrated its traditional risk management in its upgraded ERM. Various grant joint ventures have been embraced to offer ERM systems an opportunity to ensure the institution’s health quality and innovation standards (Silva Etges, Grenon, Souza, Kliemann, Neto, & Felix, 2018).Although both organizations have the same objectives towards the implementation of the ERM system different means and approaches have been applied in the adoption of the ERM system as discussed above. However, I believe that Mars Incorporation could leverage on technology and develop an office or department for ERM like the University of California health system. Consequently, the University of California should have involved all the management teams when developing the ERM system.ReferencesSilva Etges, A. P. B., Grenon, V., de Souza, J. S., Kliemann Neto, F. J., & Felix, E. A. (2018). ERM for Health Care Organizations: An Economic Enterprise Risk Management Innovation Program (E2RMhealth care).Value in Health Regional Issues,17, 102–108. https://doi.org/10.1016/j.vhri.2018.03.008Malki, S., & Aldwais, N. K. (2019). Enterprise Risk Management at the State University of New York: A Benchmark for Saudi Universities.Journal of Applied Business & Economics,21(9), 54.Ojeka, S. A., Adegboye, A., Adegboye, K., Alabi, O., Afolabi, M., & Iyoha, F. (2019). Chief financial officer roles and enterprise risk management: An empirical based study.Heliyon,5(6). https://doi.org/10.1016/j.heliyon.2019.e01934REPLY 2 Harish AnneDiscussion 2COLLAPSETop of FormEnterprise Risk Management can be different in different organizations. The organizations may use different indicators and factors to develop the ERP plan. When we consider Mars and University of California. These entities work with different objectives and the business environment. Their business functions differ in most of the aspects. Mars ERP system is evolved since 2012. The main objectives of ERM is to maintain the growth, earnings and targets when the company is transitioned from family management to non-family management. The members of Mars were not in favor of COSO but adopted a program which leverages the strengths of Mars. A simple template is used to describe the objectives, scores, risks and risk treatment plan. A gap analysis is done to identify evaluate the inherent risks and the limited controls. ERM is an evolutionary process. The key factors for the success are that it aligns with the goals and objectives, flexibility and is realistic. Simple technology such as Excel and Word are used. ERM supports aggregation Let’s consider Enterprise Risk Management in University of California. In their system, more emphasis was given to KPI. This was implemented in 1995 as a part of COSO framework. This task was handled to Chief Risk Officer. All the business sites were evaluated, and the ERP was prepared. Leadership plays an important role. All the objectives were clearly identified. The risks which may impact the objectives were also identified. Key Performance indicators are the basic components of ERP. These KPIs are derived from critical success factors. These can be updated frequently. Based on the complexities of the university’s operations and the decentralization more emphasis is given to the technology. It is used to identify, manage and monitor the risks. A data warehouse is developed to manage the available information through a system Enterprise Risk Management Information System. The analysis of the data was done to know the processes, risks and controls. To monitor the success, a risk study was implemented. In this system, data monitoring and measuring were not done in a timely manner and were done as an ad-hoc process which is done annually and manually. Both the ERM systems were developed with the same objectives. But they differ in the process of ERM. University of California employed complex technology tools, but Mars have employed simple technology tools. In Mars, more emphasis was given to monitoring and reporting but in University of California, these tools were only ad hoc and was done only periodically. University of California has given more importance to Key Performance Indicators.References. Hoboken, NJ: Wiley.Implementing enterprise risk management: case studies and best practicesFraser, J. R. S., Simkins, B. J., & Narvaez, K. (2015).Bottom of Form

Back To Top