Risk management models: implementation outcomes and effectiveness assessment

Enterprise Risk Management Model

This model of risk management is predicated as a measure of increasing an organizations opportunity to attain its strategy with full appreciation of the risks involved. The model considers the potential of an organization's set objectives being met as well as the stakeholder value. In the model, a broader perspective of risks involved in the chosen strategies, the likely areas to be affected and the probable countermeasures are considered Abrahams C., Von Kanel J., Muller S., Pfitzmann B., & Ruschuka T.S., 2007.

The model is touted to be holistic in the approach of considering that current effect will have an impact in the future.

The model advanced by Beasley, Frigo and Litman is based on the need to consider risks involved in strategic planning and coming up with measures to resolve them. It is seen that the process of strategic planning bears an impact on attainment of objectives and this can be limited be the risk aversion measures taken McCarthy M.P. & Flynn T.P., 2004.

The use of the model and its success is based on eleven tenets that cover strategy formulation and risk aversion measures cohesively.

Success and Failures Observed

It is observed in -- Beasley M.S., Frigo M.L., and Litman J. (2007)

paper on "Strategic Risk" Creating and protecting value -- observes a majority of board members appreciate that, in the recent past the dynamism of the external environment has impacted greatly on business operations Beasley M.S. et al., 2007.

This has created the need for organizations to become more responsive to these changes that consider lasting measures with the least risk to be encountered.

The model of enterprise risk management is seen to be effective for Nokia strategic partnering that anticipated pressure for increased supply of chips. The implementation of the strategy considered the likely risk and deployed use of tenets in the model to incorporate risk in their strategy. The success embraced by Nokia compared to the failure that Ericsson faced is attributed to use and failure to the model respectively. Corporation like Nokia that incorporated risk in their management and strategy planning have embraced remarkable sustainable growth even with the changes in the external environment Moeller R.R., 2007()

For a Corporation to be able to sustain the growing needs of stakeholders, considerations of how their present operation will impact on their future operation is required Butler, Kraft A., & Weiss I.S., 2007.

The retail consumer product company sacrificed their potential to expand by considering short-term profits. This slowed down the retailer's effort to meet it stakeholder's growing need f or their products by putting their expansion strategy in jeopardy. The failure to consider the risks of abiding to set regulatory standards leads to failure to incorporate risks in management techniques Moeller R.R., 2007()