Erm Program at Cfc Requires

¶ … ERM program at CFC requires controls. There are three major categories of controls in relationship to risk. The first control type is a preventative control, which can be put in place to mitigate or stop a risk from being realized. Each risk that a company faces can potentially impact the value of the company. From there, preventative controls are strong by reducing the chance that a risk will arise.

The second type of control is the detective type. Detective controls focus on the identification of risks. Unlike preventative controls, detective controls do not prevent a risk from being realized, but rather, help to identify when it has occurred. Finally, corrective controls are used to mitigate the impact from a risk that has been realized. For example, if a company like CFC invested in a foreign country, and that foreign company had a civil war, the corrective control would be to liquidate the investment and capitalize on opportunities in another country. The corrective controls do not prevent risks from arising, but they help to mitigate those risks once realized" (Enterprise Risk). The solutions will be focused on preventative controls for Enterprise Risk Management.

In order to overcome the issues, everyone needs to consider group thinking and conformity so that everyone can work together. Group thinking and conformity focuses on the interpersonal transaction between managers and employee. Leaders are seen as engaging in behaviors that maintain a quality interaction between themselves and followers. The company is lacking group thinking and conformity because no one is willing to work together. In order to be an effective company, they have to conform as one so that productivity can be increased to make high profits.

Each employee should be offered stock options and given a portion of the profits as an incentive to keep working toward higher customer satisfaction. Motivation and communication are additional ways the CEO could create happy employees. Challenging employees allows him or her to be creative and generate new ideas or product lines that will increase sales and/or customer satisfaction. Listening to employees opinions is vital to success. The people who work the frontline of any business will have ideas on how to better the processes. Some companies used an approach uncommon to most CEO's; walking around the store to meet and greet the associates and customers. This approach allowed the consumers the opportunity to tell him how well he or she liked the store and offer suggestions for change. The associates liked this approach because it made him an approachable CEO who was willing to listen to employees and customers.