Enterprise Risk Management Case Study

Good Essays
1. “What are the risks”?
2. “What are we going to do about the risks”?
3. “How will we measure whether we are having a positive or negative impact on the risks”?
4. “How will we demonstrate shareholder value”?
Walmart has asked the four questions that all organizations must ask themselves during the implementation process of the enterprise risk management program. One of the most important questions or steps in this process is identifying the risks. Identifying the risks first helped Walmart to prioritize their biggest risks. Walmart schedules four and five-hour workshops with senior help identify risks but before this, the business leaders has objectives already clearly defined (Atkinson, 2003). The business objectives are used to determine
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This workshop will only include those who will be most impacted by a specific risk. The goal of these workshops is to reduce the workload for the managers involved (Atkinson, 2003). Project teams are then created and an initial inventory of procedures already in place is conducted to address a specific risk. The team creates questions that will help them identify unnecessary activities that can be eliminated (Atkinson,2003). Once this step is completed, then an action plan is created. During the action planning stage, the team member determines which team member will be assigned to a specific project and when it will be completed. Step four of the process consists of performance metrics in which the project plans are determined to have a positive or negative impact on the identified risks. Walmart’s performance metrics does three things; first measure results, not activity. Second, it measures the results of the training (the ability to increase productivity at the store level). Lastly, the metrics should reveal the target performance versus the actual performance and demonstrate trends over time. Step five of Walmart’s enterprise risk management process is to evaluate the shareholder value and return on investment (Atkinson,…show more content…
First, he says keep it simple because overengineered enterprise risk management processes have been known to cause problems. Second, there needs to be a meeting of the minds. This means that the different project team should come together to discuss progress and express opinions. Thirdly, organizations should select their pilots carefully because it will determine the organization’s future success or failure. Fourth, organizations should use a bottom-up, grassroots approach and lastly, make sure your ERM plan fits the organization and tailored to the needs of the
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