Do you think enterprise Risk Management is essential for sustainable competitive advantage of an organization?

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Do you think enterprise Risk Management is essential for sustainable competitive advantage of an organization? A risk is a potential negative impact which can occur to an asset. It is also defines a probability of a loss or a threat to an organization. ERM could be defined as the sum of all proactive management directed at identification, analysis and economic control. Enterprise risk management is the reason companies realize the existence of such risks, and decide to take this factor into account when implementing their business. Thanks to ERM, companies allow them to conduct their activities in a changing and complex competitive environment; to react quickly and correctly to constantly changing conditions and to help owners, the board and management deal with risks in all aspects of operations. The effect of enterprise risk management is to increase confidence of all business partners, shareholders and co-workers in the company, explaining is why it is such a good competitive advantage. ERM impacts the company management through a wide point of view that includes horizontally: across all operations of an organization which deals with speculative and pure risks; and vertically, from the strategic level thanks the management team, and the board of directors which gives objectives to the front-line employees.

Extraits

[...] Regarding the level of pollution, the Ozone problems and the China growth in consumption, the risk manager would have encourage investment in research and development to create recycling products for example. That's today a key issue for many companies to sell competitive products regarding the consumers but also regarding the cost of adaptation to the new regulation. Here are some examples where the enterprise risk management is definitely a strong competitive advantage. The ERM exists in all domains of the company and all level. [...]

[...] At the opposite, over estimated goals will tired your company's because of the misuse of its energy. The result is a waste of time for every one. Inability to measure It's a long process to find the measurement tools that fit best the company's culture and work environment. To implement the good tools is as important as fix achievable goals for the company's risk management strategy to be successful and consist in a competitive advantage. Poor team management As communication, the capacity to make people adhere the company's project is really important. [...]

[...] The effect of the enterprise risk management is to increase confidence of all business partners, shareholders and co-workers in the company: that is why it is such a good competitive advantage. Indeed the ERM impacts the company management through a wide point of view that means horizontally: across all operations of an organization which deals with speculative and pure risks, and vertically, from the strategic level thanks the management team, the board of direction which gives objectives to the front-line employees To implement a good risk management in a company, some principles have to be understood No risk no gain, in business but more generally in the every day life, the one who never take risk has no chance to have gains in return. [...]

[...] The risk management programme could consist in planning, organizing and writing. The pre-loss and post loss are applied at different stages. Preventive measures are implemented in the pre loss planning. The risk manager focuses his work on building strategy to avoid the forecasted risk and prevent from possible consequences. In the post loss planning, the problem has already occurred and the risk manager is focused on the recovery depending on the importance of the damages: the consequences of the recovery strategy could be the survival of the company (in worth cases), not to interrupt the operations (in a production process), or to guaranty the stability of operations (on a long period of time for example). [...]

[...] Tax risk For example, before launching its business in Europe, an American company will have to take into account the tax rules applied in each European country. If its market study indicates that the French market is a very interesting target for its business, he will have to calculate the profitability of its sales including the level of taxes. In the same idea, the risk manager will measure the change for these taxes to decrease regarding the economical and political environments . [...]