Chapter 6 presented the approach the LEGO Group used to impl…
Chapter 6 presented the approach the LEGO Group used to implement ERM. Please explain how ERM adoption and implementation in the higher education (HE) environment differs from the for-profit environment. Cite specific examples from this week’s readings. To complete this assignment, you must do the following: A) Create a new thread. As indicated above, explain how ERM adoption and implementation in the higher education (HE) environment differs from the for-profit environment. Cite specific examples from this week’s readings. In your explanation, discuss at least three points or aspects in which the implementing ERM in the two environments differ. 500 words **Keep in mind that SafeAssign will be turned on so do your own work!!! No plagiarism Text book: http://3.droppdf.com/files/l545g/implementing-enterprise-risk-management.pdf Purchase the answer to view it
Enterprise Risk Management (ERM) is a systematic and comprehensive approach to identifying, assessing, and managing risks within an organization. While the principles and objectives of ERM remain relatively consistent across industries and sectors, the adoption and implementation of ERM in higher education (HE) environments can differ significantly from the for-profit environment. This paper aims to examine these differences, drawing on examples from this week’s readings.
Firstly, one key difference between the implementation of ERM in the HE and for-profit sectors lies in the nature of their risk profiles. HE institutions face unique risks associated with their core activities, such as academic programs, research, and student services. The Association of Governing Boards (AGB) study highlighted in this week’s readings points out that HE institutions often have diverse risk landscapes compared to for-profit organizations. For example, they may face risks related to enrollment and retention, regulatory compliance in relation to federal funding, reputation management, and cybersecurity.
Additionally, the nature of decision-making processes in HE institutions is different from for-profit organizations, which further impacts ERM adoption and implementation. In a for-profit environment, decision-making is typically top-down and driven by profitability and shareholder value. However, in HE institutions, decision-making is often more decentralized and involves multiple stakeholders, including faculty, staff, students, and administrators. The COSO Framework for ERM emphasizes the importance of aligning risk appetite with organizational objectives. In the HE context, this can be challenging due to the diverse interests and perspectives of stakeholders.
A third point of difference is the culture and governance structures within HE institutions. HE environments are often characterized by shared governance, which involves the participation of faculty, staff, and administrators in decision-making processes. The AGB study mentions the challenges of implementing ERM in this context, as risk management decisions may require collaboration and consensus-building among different stakeholders. For-profit organizations, on the other hand, often have more centralized decision-making structures, which may facilitate quicker and more streamlined implementation of ERM.
An example from the readings that illustrates these differences is the case study of the University System of Georgia (USG). The USG implemented ERM as a collaborative effort involving various stakeholders, including faculty, staff, and administrators. The case study highlights the challenges of navigating the decentralized decision-making environment and obtaining buy-in from stakeholders. This is in contrast to the LEGO Group’s implementation of ERM, where decision-making was more centralized and top-down, allowing for a relatively smoother implementation process.
In conclusion, implementing ERM in the HE environment differs from the for-profit environment in several ways. These differences are primarily driven by the unique risk profiles, decision-making processes, and governance structures within HE institutions. Acknowledging and addressing these differences is crucial for successfully adopting and implementing ERM in the HE context. The example of the USG demonstrates the importance of stakeholder collaboration and consensus-building in the HE sector’s risk management efforts.