Enterprise Risk Management Assignment Sample

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Introduction

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1. Executive summary

The study is about risk management. It is a possession of organization to identify, analyze, control financial, legal, and strategic and security risk. Further it has been discussed the role of safety in mitigating the operational risk, strategic risk, and reputational risk. The operation risk can be mitigated by identifying and addressing the compliances with all healthy and secure legislation. Furthermore, it has been observed that the strategic risk can affect the performance and operational activity in the long term. Moreover, it can be said that without the proper strategic risk planning it could be impossible to achieve the objective and future goals in the near future. The reputational risk in the organization that occurs when the business fails to fulfill the expressions of the investors, stakeholders, financial losses and capital losses. The collaboration of risk management and safety managers can help to reduce the risk as well as safety of the employees. Moreover, the ERM is used by the risk manager to enhance the decision and proper understanding of threatened opportunities of the company Kier Group. In the literature review the, it has been discussed the issues that have been involved in the construction company.

2. Introduction

The risk management in the organization is the process of identifying, analyzing, controlling financial, legal, and strategic and security risk. The risk managers in the organization are totally responsible to oversee the origination risk management programs, identifying and controlling the risk that could impede the “safety, security, and reputation” of the organization.

2.1 role of safety in mitigating the operational risk

The operational risk in the risk management that is caused by “flawed, failed process, system, and policies” that can affect the operations of the originating. Moreover, it can be said that the function of safety management in risk management can help to reduce the risk of operations activity. The safety management works to identify and address the compliances with all healthy and secure legislation. Furthermore, the safety management in the organization is liable to manage by integrating “accident investigation procedure, health and safety policies, practices and procedure” to mitigate the risk of organization. 

2.2 role of safety in mitigating the strategic risk

The strategic risk in the organization defines the external events as well as internal events that may create difficulties in the near future for the organization. Furthermore, it can be said that without a proper strategic risk plan in the organization, it could be impossible to achieve the objective and future goals in the near future. Also, the strategic risk can affect the performance and operational activity in the long term. Furthermore, the “avoidance of risk, controlling risk” can help to mitigate the risk of the company.

2.3 role of safety in mitigating the reputational risk

The reputational risk in the organization that occurs when the business fails to fulfill the expressions of the investors, stakeholders, financial losses and capital losses. The reputational risk is also responsible for decreasing the financial performance of the company. There are three strategies that can help to reduce the reputational risk which are “internal identification process, external identification process, and ongoing monitoring process”. Moreover, it has been observed that the reputation risk generally arises when an organization fails to satisfy its investors and shareholders, as a result the company can lose its “revenue, increase the operating expense, increase of capital costs”.

2.4 collaboration of risk manager to identifying and controlling the risk exposure

Risk management is an organizational process which helps in identification of risk, analysis of risk, and making strategic planning to mitigate future risks. The collaboration of risk managers is a dynamic process of risk management that supports proper communication, and involves content handling. According to the report the ERM is used by the risk manager to enhance the decision and proper understanding of threatened opportunities of the company Kier Group. As a part of Kier Group safety professionals, it is to ensure that the company is providing proper safety and security to the employees under the Health and Safety at Work Regulations. The identification and taking the decision to evaluate the risk can further help to reduce the risks of the company. In order, the risk managers and safety managers play a crucial role to mitigate the issues by providing the safety plan in mitigating operational, strategic, and reputational risks. As the company Kier Group construction-based company, where there are lots of hazards and risks of safety and health because the employees work in the internment weather conditions. Thuds, this safety and security plan will help in providing a roadmap to ensure safety in Kier Group.

3. Literature review

3.1current issues involved in risk management in the construction industry

There are lots of issues that have been faced by the construction industry such as “issues of risk management, safety and security issues' '. In order it has been identified that the risk management can pale as crucial role in the construction industry in the decision-making process. Further, it has been observed that the risk magnet is a crucial part in assessing the hazard that is the threat to the safety and health of the workers. As opined by the author Shad et al. (2019), In the current year, there are some risks that are involved in the construction industry which are “environmental risk, financial and economic risk, political and legal risk, design and technical risk, physical risk, contractual risk, management risk”. It has been observed that not only in the construction industry, kings of all industries have faced financial and economic issues in the current era. Moreover, it has been identified that the financial issues in risk management arise due to reputational risk. The financial risk in the company can affect the operational performance and efficiency of the company. In the reputational risk management, identification and control by the management can provide extra benefits to investors as well as stakeholders of the company Kier Group. As per the view of Saeidi et al. (2019), In the construction industry, it has been observed that the delay in the project is a major issue that has been faced by almost all construction industries. Further, it is a vital responsibility of the safety managers and risk management to make proper planning in order to finish the project within the time. Furthermore, the delay in the project can also cause an expected risk of transforming in the accident.

3.2 The traditional barriers to risk-based safety programs

• The traditional barriers have increased the response to the risk-based safety programs. The improvement has been seen particularly all over the years, but also it has been observed that some sectors still face the hurdle of traditional barriers toward the risk-based safety programs. In the traditional barriers, it has been observed that the sift professional reports to the r Human Resource Department or either the Facilities Department. As expressed by the Naseem et al. (2020), Whereas, it has been observed that the risk management is directly reported to the departure of financial traditionally. Also, it has been observed that the reporting of safety managers and risk assessment managers separate their jobs and bother are work in the different direction they create barriers. In order it has been identified that the barriers that have been faced by the risk management by the company which are “Inadequate Communication, Poor Prioritization, Failure to Use Appropriate Risk Metrics, Effective Risk Approach, Organizational Risk Culture” (Yang et al.  2018).
• Safety management is the application of policies, principles, and framework to reduce the risk of injuries, accidents, and other consequences in the company. On the other hand, risk management is a systematic process of organization to manage the risks and mitigate them. Moreover, it can be said that the risk management involved in the identification of risk, assessment of risk, and making the policies and strategies to mitigate. The poor funding in the organization is considered traditional barriers to risk-based safety programs. As stated by the Hanggraeni et al. (2019), In order, it can be said that investing in the right direction will help to get a huge return on investment as compared to the traditional system. Moreover, in the construction industry, one of the most traditional berries has been observed which is old mindset and approaches of contractors not in the construction site may not properly evaluate the risk hazard. In order some barriers have been highlighted which are “lack of proper knowledge, lack of time and compellability of analytical tools' '. As opined by the Bokhari et al. (2019), The lack of a proper rescuer further creates issues in the risk management. Furthermore, it has been observed that the incidents in the construction site have been increased and it also increased the cost which is quite not good for the company and it can affect the performance of the company in the long run. Furthermore, the prosper practice of risk manager in the company will wisely help to overcome the barriers that has been faced by the company. 

4. Application of theory

4.1 Factors and trends that define relevance in implementing risk-based safety programs

The safety management is the primary concern of the company Kier Group due to the safety procedure the company has maintained that has properly maintained the front of safety innovation by continuously defining the sift process and nifty procedure. As stated by the Thabit (2019), Moreover, the safety process and procedure give the company more confidence that helps to lead the construction safety. Along with the new technology the company has also followed the traditional way to manage the risk manage and safety sector in a wider manner. As it has been seen that both departments of the company are performing well and the departments need to collaborate in order to achieve better performance.

Safety programs

In 1928, when the company Kier Group was established. The six safety and regulations that have been maintained by the company and this safety regulation has effectively changed the way of company to manage the safety procedure in the workplace. The safety regulation was:

• 1.The workplace including the welfare of the employees, safety and security, sitting out needs to be accommodated at all workplace.
• Regulation and use of construction equipment for controlling, addressing and preventing the risk of accident and death from the use of construction equipment.
• Operation regulation regarding the manual handling for taking the appropriate steps to mitigate the risk of manual operations in construction site
• Personal protective equipment regulations to provide the suitable protective personal equipment.
• For reducing the safety risk, the display screen regulation has been established by the company
• H&S management of the company work regulation to work under the act of health and safety

4.2 Application of RMA’s enterprise Risk management and examine the relation between the internal control and various ERM competencies

4.2.1 RMA’s Enterprise Risk Management framework

In the company Kier Group can face the risk in future, by which the firm can face loss in future. Risk is uncertain in a firm that might result in a negative impact on the business outcome. ERM indicates the total discipline process by which the company Kier Group can identify and assess and respond to the report of key risk as well as key opportunities with help of objectives and of the firm's operational mission. As per the view of Shad et al. 2019 the RMA framework in Kier Group involve five principle which include identify of risk in the firm, analyzing of the potential impact of the risk in firm, developing multiples strategic way to mitigate the identified risk in the firm, increasement of the approaches and strategies in the firm, review and adapt as appropriate strategy in the firm. As opined by Saeidi, et al. 2019, the application of RMA’s risk management indicates that the identified risk is developing with consistent and sustainable strategies which are faced by the firm. Basically, it involves the multiple groups in the organization, and represents the all significant of function in the firm. Hence RMA’s risk management in the enterprise indicated the sustainable nature in the company such as health and safety, infrastructure, HR as well as accounting operation and development of planning in the firm. It is important in the firm Kier Group to identify the potential risk in the business by which the business can solve the issue with the risk in the firm. Hence it is necessary to use the RMA’s risk management in the Kier Group by which the firm can understand the risks and threats in the firm.

4.2.2 Comparison between the corporate governance, internal control and ERM

The corporate governance in the firm indicates the effective, entrepreneurial and management system which delivers the long-term success of the firm. As stated by Naseem et al. 2020, on the other hand corporate governance is a system by which the firm has been directed and controlled by boards of directors and the corporate governance helps to provide the identification of risk in the firm. By which the firm can run under error and risk-free business. On the other hand, the inter control in the firm provides mechanisms, rules and regulation as well as multiple procedures which is implemented by the company to give assurance about the integrity of financial information of the firm. Beside promoting accountability and preventing error and fraud in the business. ERM indicates the risk management in firms that involve the identification and preparation of the hazards in the company. Also, ERM allows the managers to control the overall risk in the firm. Besides, it provides traditional risk management by which the firm can make proper decision making in the business. As narrated and stated by González, Santomil, and Herrera, 2020, ERM technique has involved sustainability in the firm by which the firm can maintain the suitable structure in the firm. The modern business gets helped by the ERM, by which the firm can run through the business hazard free.

5. Development of Risk management

5.1 Potential effects & risk and additional controls to ensure the successful to implement to change

The risk management in the organization is the process of identifying, analyzing, controlling financial, legal, and strategic and security risk. There are six best plans that can be used for the development of risk management which are “Identifying the risk, analyzing the risk, Prioritizing the risk, assign responsibility to the risk, respond to the risk, Monitor the risk,”. Identifying the risk is a primary plan of the development of risk management. The identifying the risk is a very important for the comply, as it they cannot identify the arrested the risk that mean the company has not proper risk management (Alawattegama. 2018). In order to identify the risk, the company should have proper vision to identify the current risk as well as future risk. Through the identification of risk, the company is able to identify the ethos department and employees who are involved in the risk problems. In order to identify risk, the company can develop the cyber security chain, that will help the company to identify the arrested risk in a wider manner. The next step of the development of risk management is to analyze the risk (Xia et al. 2018), Once the company has successfully identified the risk then the company should try to analyze the potential risk of the organization in depth manner. moreover, it can be said that lack of proper information and data the company may have faced the issues due to the risk. Also, the preparation of a checklist in the organization may help the company to identify the potential risk that affects the operational and financial performance in a wider manner. Moreover, it can be said that the proper identification analysis of risk may help to reduce the potential risk that can be faced by the company (Frik et al. 2019).

The next step of development of risk management is to prioritize the risk. Hence, it can be said that all risks impacts are not equal, and the CPECS checklist may help to identify the potential risk that can affect the financial performance of the company in a wider range. In order to classify the risks, the company should try to make a checklist that will help to analyze the level of risk.

Six key issues of company Kier Group

5.2 Relationship between the key changes and sequence to be adopted for the change

The six key changes have been identified in the company Kier Group. The first issues that have been identified that the company might be facing are issues of fluctuation of share price. The fluctuation of share price issues arises when the company cannot meet satisfaction of the shareholders, as result the company can face the financial issues and capitals budgeting and operation issues. In order inf the company can provide the attractive rate of return to its investors and stakeholders, then the company can attract the investors as well as stakeholders. As per the view of the Zhang et al. (2021). The second issues are higher competition and supplier related issues which is faced by the company. In order the company can try to adopt the new technologies and upgrade the existing equipment of construction that will help to reduce the competitiveness and provide the extra advantages to the company. Managerial and financial issues is major problems of the company that affect the financial and operational performance of the company. In order to mitigate the financial and managerial issues, the company can hire the experience and a deque knowledge of person to reduce the risk of management. Experience managerial persona can efficiently and effectively take the issues of management as result its ca enhance the financial performance of the company. As illustrated by the Wong and Jensen (2020), On the other hand, some other issues that has been faced by the company which are operas tonal issues and legal issues. The operation issues can be taken by the collaboration and proper communication with the whole department of the company, ad result it will further help to establish the proper communication with all employee and it will further help to mitigate the employees’ related issues.

6. Conclusion and recommendation

6.1 Conclusion

Based on the study, it has been discussed risk management and safety management. The risk management is process of organization that help to identification of risk, analysis of risk, respond the risk, and making the strategy and planning in order to mitigate the risk of organization. On the other hand, safety management is a process that is mostly used by the construction industry. Safety management is a process that helps to protect the workers that work at the construction site. Further in the study, it has been discussed the role of risk management in the operational risk, strategic risk, and reputational risk. Further, it has been discussed in the literature review, where it has been discussed the current issues that have been involved in the risk management as well as construction industry. Moreover, it has been observed that safety management is highly required in construction management. also, the construction industry is facing some issues which are “environmental risk, financial and economic risk, political and legal risk, design and technical risk, physical risk, contractual risk, management risk” that affect the performance of the construction industry. Also, it has been discussed the traditional barriers to risk-based safety management. Further, it has been discussed the application theory and the safety programs that have been applied by the company Kier Group.

6.2 Recommendation

Based on the study it has been concluded that risk management is a managerial process that helps to mitigate the risks. In order to mitigate the risks, the company should try to make proper strategy and planning to mitigate the current potential risk as well as future risk. The better collaboration between the risk management and safety management will help further to work effectively and efficiently in the organization. Moreover, it could be recommended to the company to avoid the traditional barriers and work both risk and safety management with collaboration. Due to the collaboration of safety and health programs with risk management leads to reducing injuries and the compensation rates of workers. It could be recommended to the company to upgrade the equipment and technologies in a proper time manner to assess the risk and mitigate and also the upgradation in equipment and adaptation on new technology will help to provide the extra safety and security to the employees. It is a full responsibility of the contractor to not carry out until fully satisfied with the safety and security.