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Cost Management, Strategy, Technique - Reply
Discussion Thread: Cost Management, Strategy, Technique - Reply
Excellent analysis of Walmart Inc. I am shocked and perplexed that one of the retail giants in the
United States does not have an Enterprise Risk Management (ERM) process in place. Especially
since, in the crazy competitive world of retail, there are laws and regulations that retail
companies need to adhere such as ISO, NIST, etc., due to several potential risks like vendor risk,
cyber risk, etc.
The ERM process you mentioned is perfect since Walmart currently does not have a defined risk
management process. While they hire a Chief Risk officer (CRO), they can also consider adopting
another technique called Benchmarking as an efficiency assessment method. "Benchmarking is
a learning opportunity. I've heard some proponents suggest that a best practice in
benchmarking is to narrow the focus of any individual effort. Too big a focus can be
overwhelming" (Jusko, 2018, p.32). Since ERM will be a new process within the company, and
the CRO will be a new hire, Walmart should consider adopting benchmarking or partnership-
based benchmarking to help focus the effort to jump-start the ERM process within the
organization.
Your analysis of hiring a Chief Risk Officer is proper and sufficient for helping them streamline
the enterprise risk management process and making them accountable but also helping provide
improved risk visibility and cost management concerning their operating activities. Anand and
Kodali (2008) identified that "benchmarking should be recognized as a catalyst for improvement
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Cost Management, Strategy, Technique - Reply
and innovation. Benchmarking has been a popular topic for the last two decades, and its
significance as a practical method in developing critical areas of business is indisputable"
(p.258). Thus, incorporating benchmarking practices will assist Walmart in consolidating various
risk management parts, allowing for better control of the market and competitive while
leveraging economic conditions. The Book of Proverbs says, "Where there is no guidance, a
people falls, but in an abundance of counselors there is safety" (Proverbs, 11:14). Walmart can
get a consultation from industry experts, seek advice, seek counsel so they may point out the
weakness and get sound advice to help improve the organization. "Benchmarking efforts are
facilitated today by corporate networks of non-competing firms that exchange benchmarking
information"(Blocher, 2022, p.19). Walmart is in a financial position to pay industry experts to
assist them with benchmarking strategies
References
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Cost Management, Strategy, Technique - Reply
Anand, G., & Kodali, R. (2008). Benchmarking the benchmarking models.Benchmarking, 15(3),
257-291. https://doi.org/10.1108/14635770810876593
Blocher, E., Juras, P. E., & Smith, S. D. (2022). Cost management: A strategic emphasis (ninth).
McGraw Hill.
Jusko, J. (2018). Of Course You Should Be Benchmarking: Benchmarking opens a world to the
possible, firing improvement ideas for your own manufacturing organization. Industry
Week/IW, 267(3), 32.
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