Reference no: EM132338672

Discussion 1:-

Chapter 9: Lessons from the Academy: ERM Implementation in the University Setting

COLLAPSE

1. Articulate the aspects of the university environment to consider as they adopt and implement ERM.

Different types and volume of risks affecting higher education and the consequences of unmanaged risks are increasing day by day. So many higher education institutions are adopting Enterprise Risk Management (ERM) approach. Institutions used to be a self-regulating the environment that is governed under traditional management model where one group is unaware of the other like the administrative area is unaware of other programs and practices in another area. There are many universities that Freeh Report calls them failure of Governance as the universities don't have any reporting procedures or structure on how to handle the major risks. Due to lack of metrics for measuring progress, following both shared as well as administrative strategies, lack of clarity and agreement in establishing goals and implementing them ERM came into light for managing all the risks and missed opportunities.

2. Describe the differences between formal structural and collegial models as they relate to goal setting, decision making, and leadership.

Goal Setting : Formal/Structural: Goals are determined at an institutional level and are set by leaders. As it is a formal/structural process where a company will have an organization chart starts with the CEO till the last line of staff members

Collegial: Goals are determined at an institutional level but through agreement. In this process, everyone is involved in giving their ideas on

what goals need to be setup.

Decision making:

Formal/Structural: Since it is a structural/formal organization model where organizations exist to achieve established goals. They follow rules and standard operating procedures to make reasonable decisions.

Collegial: This organization structure believes in Egalitarianism where it believes in all people deserve equal rights and opportunities.

Leadership: Formal/Structural: The leader plays a key role in setting up the goals and makes them achieve. A leader is involved in setting up strategic plans, driving the employees, organization, and staff and also evaluating

Collegial: It doesn't have a controlled or overly structured which is sensitive to both task and process.

3. Analyze strategies utilized at one higher education institution to adopt ERM processes to fit the decentralized academic environment.
Strategies that helped the University of Alaska to achieve the vision through ERM is

• Organization Stewardship

• Responsible for Risk Management and Internal Control: Board of Regents. President, Officers, Internal auditor, Functional Leaders

• Internal Control defined

• Enterprise risk management defined

• Components of risk management: Internal environment, Objective setting, Event identification

References:

Fraser, J., Simkins, B. J., & Narvaez, K. (2015). Implementing enterprise risk management: Case studies and best practices. Hoboken: Wiley.
Risk Management: System Office of Risk Services. (n.d.). Retrieved from https://www.alaska.edu/risksafety/a_risk_management/

Discussion- 2

Chapter 9: Lessons from the Academy: ERM Implementation in the University Setting

1. Articulate the aspects of the university environment to consider as they adopt and implement ERM.

The various aspects of any university environment which needs to be considered are the culture,financial background of the university(profit ,non-profit),Leadership structure,Startegy for the ERM implementation and various risks.

Based on these we can understand that each and every university is completely different in every aspect and their needs and solutions are also totally different .For example Sexual avuse scandals is a concern at Penn state university where as Hurricane Katrina is one of the risk for New Orleans University.

2. Describe the differences between formal structural and collegial organizational models as they relate to goal setting, decision making, and leadership.

Coming to the differences between formal structural and collegial organizationsl models Formal structual deals with leadership team to discover the risk and implementing ERM and they decide the goals and decisions where as Collegial is of same kind but here the decision makers are group of people .Typically the formal structure is of single leader driven where as we see group in collegial.Goals are decided by leaders in formal whereas we see its an agreement in collegial .Decisions are rational in formal and collegial in the another one.

3. Analyze strategies utilized at one higher education institution to adopt ERM to fit the decentralized academic environment.

University which I would like to discuss here is University of Washington and the strategies utilized up here are accessing the risks in the context of strategic way,covering all types of risks,gettingawarness on all of these risks,enhance and strengthen the compliance structure.They followed a COSO model up here.Under this model they have 8 step model in which some of them are Strategic goals,Risk identification and assessment,Information and communication ,Monitoring and Measuring ,Response ,controls and at last we have Leadership, culture and value.

References

Frigo, Mark L., and Mark Beasley (2010). "ERM and Its Role in Strategic Planning and Strategy Execution." In John Fraser and Betty J. Simkins, eds. Enterprise Risk Management. Hoboken, NJ: John Wiley & Sons.

Discussion 3: -

RE: Chapter 6: Strategic Risk Management at the LEGO Group: Integrating Strategy and Risk Management COLLAPSE

Question 1: What are the advantages of integrating ERM with strategy and strategy execution as described in this case?

First, the company will be able to identify risks as well as opportunities, and this will ensure that the stakeholders are well aware of the company's situation at all times. When using this approach, the companies are given early warning concerning risks in their companies, and after doing so, they then ensure that they are accountable for the risks and act on it. When the ERM is integrated, it will be responsible for follow-ups on the company's risks; thereby, they will keep the portfolios for the chances for the projects and sessions. The company will also enjoy the process of reassessment, which is frequently assumed by other procedure, and they also try to foretell about the next risk only to keep the company informed.

Question 2: How does scenario analysis, as described in this case, help an organization to prepare for uncertainties?

The scenario analysis is an approach that is undertaken when analyzing risk, and the stakeholders are involved. This process ensures that is the vulnerable parts are taken keen interest since the stakeholders are there to point them out. It also provides that intense work is done since the stakeholders are present. It will also make them aware so that such things that can lead to risk could be avoided thereby reducing the risks and prepares them for the future and the uncertainties.

Question 3: What are the advantages of using the PAPA model to categorize risks?

The PAPA model is an impressive model altogether and it has the following merits. First, it enables the risks to be categorized, and by doing so, reduces the challenges of risk management. It also provides the procedure through which a particular change could be handled even before it happens. The PAPA model prioritizes the risk from the one with the highest threat to the one with the lowest, therefore, giving the company a chance to deal with the horrible risks first before preceding the least dicey ones. The model also encourages the company to prepare well for threats as they could occur in any instance.

Discussion -4

1. What are the advantages of integrating ERM with strategy and strategy execution as described in this case?

Risk management is an imperative step that every organization should heavily invest in. However, robust skills are required in integrating Enterprise Risk Management and Strategy Execution to achieve the full benefits of mitigating anticipated risks. The integration in imperative in ensuring that the healthy life of the business enterprise is determined. The business in the above case will, therefore, be able to have an effective preparation to face any risk hence the benefits of integration ERM and Strategy Execution.

2. How does scenario analysis as described in this case, help an organization to prepare for uncertainties?

Having effective strategies for managing and mitigating risks is vital to organizations. The scenario described in the case is therefore helpful to an organization and consequently makes an organization prepare adequately for uncertainties because; it makes an organization see risks as opportunities. Secondly, the scenario helps organizations in making better decisions helping in curbing risks and strengthening the efficiency of organizations hence making them ready for uncertainties.

3. What are the advantages of using the PAPA model to categorize risks?

Risk preparedness is very important to organizations. However, it is imperative to categorize risks into various forms to help in determining the mitigation actions against each type of risk. The PAPA model is essential in categorizing risks into various classes such as risk with a high probability of occurring and those with low probability. Model is beneficial to business organizations as it offers various preparatory methods to all types of risk. Secondly, it explains actions and adaptation methods to all risks.

Reference:

Hoyt, R. E., & Liebenberg, A. P. (2011). The value of enterprise risk management. Journal of risk and insurance, 78(4), 795-822.