Enterprise Risk Strategy Management Essay Research

Enterprise Risk Strategy
(Project Name)
Student Name
Walden University
Date
Table of Contents
TOC \o "1-3" \h \z \u Enterprise Risk Management PAGEREF _Toc54743745 \h 3
Enterprise Risk Management PAGEREF _Toc54743746 \h 3
Drivers of ERM PAGEREF _Toc54743747 \h 3
ERM Advantages and Limitation PAGEREF _Toc54743748 \h 4
ERM Methods PAGEREF _Toc54743749 \h 5
Organizational Structure and Governance PAGEREF _Toc54743750 \h 5
ERM Governance Structure PAGEREF _Toc54743751 \h 5
Important Role in Governing ERM PAGEREF _Toc54743752 \h 6
Lines of Defense Model PAGEREF _Toc54743753 \h 6
ERM and Risk Culture PAGEREF _Toc54743754 \h 7
Operating Environment PAGEREF _Toc54743755 \h 7
Internal Risk in Pepsi’s Refresh Program PAGEREF _Toc54743756 \h 7
Potential Impact of Internal and External Risks PAGEREF _Toc54743757 \h 8
Strategies for Responding Risks PAGEREF _Toc54743758 \h 8
Risk Environment PAGEREF _Toc54743759 \h 9
Influence of Pepsi’s Current Risk Attitude on Refresh Program PAGEREF _Toc54743760 \h 9
Role of ERM in Pepsi Refresh Program PAGEREF _Toc54743761 \h 10
Enterprise Risk Management Strategy Proposal PAGEREF _Toc54743762 \h 10
Comparison of ERM and TRM PAGEREF _Toc54743763 \h 10
Project Management, ERM, and TRM PAGEREF _Toc54743764 \h 11
Recommendation for Pepsi Refresh Program PAGEREF _Toc54743765 \h 11
Enterprise Risk Management
Enterprise Risk Management
Risk is the difference between expected and actual outcomes. Practically, the risk is considered as uncertainty in an activity or procedure (Quail, 2012). In response to risk, organizational leaders focus on identifying the consequences of risks in every project. Later on, the leaders make plans to boost the benefit of risk and minimize the destructive aspects (Holmquist, 2014). Hence, risk management's role is to protect the organization from bad aspects of risk and cater to the opportunity from it.
In association with the organizational view, leaders adopt an enterprise-wide approach to treat risk. This, the organizational approach is termed as Enterprise Risk Management or ERM. According to De Kluyver (2013), ERM is the process that widens up the risk reliability of an organization from one factor to all risk exposure areas. In general, ERM is a structured approach to screen, emphasize, and conquer organizational risk.
Altogether, ERM plays a significant role in outlining enterprise-wide areas that are prone to risk. Due to the practice of ERM, risk and opportunity are often used interchangeably. According to Lam (2014), every risk has an opportunity, and there is a risk in every opportunity. Therefore, the role of organizational leaders and risk managers is essential to separate risk from opportunity.
Drivers of ERM
Knowing that ERM is associated with a plan-based business strategy for risks, it is essential to indicate risk factors in the projects. According to Kline and Hutchins (2017), certain features of the project environment force the managers to believe that a particular risk would be experienced; this feature is defined as a risk driver. A risk driver's prominent role in identifying the risk in any project, action, or process.
Four fundamental risk drivers compe...