Integrating ERM with Strategy
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Integrating ERM with Strategy
Enterprise Risk Management (ERM) is a process in which a company finds perilous risks affecting its capability to accomplish its goals and strategies positively. Several methods can be used to integrate ERM with policy based on a company’s culture, business model, strategic objectives, and maturity. The paper will provide a summary of the key differences between the three implementations.
Mitchell Industries ERM and Strategy Integration
The initial point of integration of ERM and Integration in Mitchell industries is the third quarter risk update. The updated info, which comprises of external risk developments that may impact the organization, is linked to the company strategy line-up, which then factors the info into the company-level plan. The second point of integration is at the business unit level, where respective corporate units obtain broad strategic ideas from the VPS and CEO meeting. Also, the organizational units collect specific information on top risks from the ERM team; then, they factor this info into the formulation of their strategic plans. The last point of integration occurs when Functions develop strategies to support corporate unit plans and address specific risks.
Eli Lilly and Company ERM and Strategy Integration
The integration of ERM with the strategy in Eli Lilly and the company starts at the individual employee level. The employees are aided to know that ERM should not be disconnected from their other work (Do, Railwaywalla & Thayer,2016). The second key to integrating the process with strategy is also at the employee level, which is to create local ownership of the process at the corporate unit level. It is accomplished by founding that the corporate leaders will eventually be in charge of the recognized risks and their consequent management and moderation. The third level of integration occurs after CERMC conducts its review of the ERM Team’s report on unit-level risks. They also review corporate unit strategic plans, which helps in identifying overlooked risks that may have been included in the risk portfolio but not addressed in the strategic plan (Do, Railwaywalla & Thayer,2016). The final integration happens at the end of the business plan process. The ERM team and CERMC gather to discuss whether any funding changes resulting from the budgeting process have affected the previously identified risks and whether any changes need to be reflected in the company’s profile.
Daisy Company ERM and Strategy Integration
The integration starts with a questionnaire that goes to all subcommittee members as well as risk owners and senior management. The second stage of integration is at the development of lagging KRIs for risk and mitigation purposes. These risk indicators help the company enact the mitigation plan in time to address emerging risks (Do, Railwaywalla & Thayer,2016). The ultimate stage occurs when the company includes the risk templates in the standard strategy process. It consists of a method for identifying the main risks to the strategy and the plan for managing those risks.
References
Do, H., Railwaywalla, M., & Thayer, J. (2016). Enterprise Risk Management Initiative, Poole College of Management, NCSU. Directors and Boards.