Discussion - ERM Use Cases

ERM Implementation

            ERM is essential for organizations in managing risks and improve on opportunities related to the achievement of organizational objectives. Statoil and United Grain Growers have established an enterprise risks management that meets their company goals based on the challenges each of them is facing.

The primary difference between ERM in Statoil and United Grain Growers is that ERM will affect management at the latter. Additionally, ERM at United Grain Growers seeks to retrieve the company from financial constraints while at Statoil, ERM seeks to improve organizational performance. However, ERM at the two companies share some similarities. For instance, ERM at United Grain Growers seeks to identify and access principle risks. The same applies to Statoil which seeks to identify any potential risks during the exercise. Besides, the two companies have a strategic risk plan. A strategic plan is essential as it outlines the role of a manager, CEO and everyone involved in the steps of an ERM (Robert and Liebenberg, 2011). United Grain growers has a strategic plan to improve financial dividends while Statoil has a risk map and committee with outlined roles and responsibilities.

The Statoil ERM seems workable and productive meaning I can implement it is it were up to me. On the contrary, I will not implement the United Grain Growers ERM. In my opinion, the ERM lacks the potential to solve financial constraints that the company is experiencing. However, some parts of it are productive, but a merger comes in with other risks for the struggling company. For instance, a merger will lead to employee layoff which might put the company at a risk of losing some important skills (Chui, 2011). Additionally, the company assets might be miscalculated during financial evaluation leading to more losses.

Generally, the ERM at Statoil might be successful in future because it is based on company goals and values. On the contrary, UGG ERM might not succeed because there are many risks associated with its strategy for implementation.

 

References

Chui, B.S. 2011. A Risk Management Model for Merger and Acquisition.

Robert, E.H. and Liebenberg, A.P. (2011). The Value of Enterprise Risk Management. The

Journal of Risk and Insurance, 78(4).pp. 795-822.

https://doi.org/10.1111/j.15396975.2011.01413.x