Wk 2 - Individual: Enterprise Risk Management Paper [due Day...

Enterprise Risk Management 2
ENTERPRISE RISK MANAGEMENT
Enterprise risk management (ERM) is known to be a global hot topic in today’s complicated and interlinked business domain. Enterprise risk management, a novel approach to risk management involves the management of risks different organizations face. Although Traditional risk management (TRM) involves risk management at individual levels. Both ERM and TRM share similarities by creating, executing, and tracking decisions that could reduce the adverse effects of risk faced in an organization (Ibrahim & Esa., 2017).
ERM and TRM exhibit differences in their scope. TRM mainly involves risk management associated with loss exposure due to hazard risks. It is the management of risks in silos. It usually helps in managing individual safety and financial loss. It also involves insurance coverage from losses incurred due to hazard risks. In contrast, ERM involves risk management associated with loss exposure due to hazard risk as well as a business risk. This approach provides management to all the risks faced by the overall organization. As the name suggests, ERM is applied to the enterprise level rather than the individual level. ERM encompasses an integrated risk team which can result in a comprehensive view and high accountability of risks. TRM involves isolated risk managers forming a non-comprehensive risk management strategy. ERM works by understanding the aims and risks of an organization that can lead to a successful organization whereas TRM works by managing risks without depending on other factors to reduce the damage caused to the organization. Risk management at the enterprise level can be integrated with other strategies like balance sheets, capital management as well as financial strategies. On the other hand, TRM cannot be integrated with other strategies.
Currently, ERM framework is very effective. It not only consolidates reporting of risks but also identifies the key risks which may hinder the organization’s success. This helps in the identification, management, and implementation of better services to mitigate the danger that arises for the organization. ERM also enables financial benefits owing to its integrated risk management...