Implementation of Enterprise Risk Management in Higher Education

Need for ERM in Higher Education

Risk Management代写 Need for ERM in Higher Education:Risk, when occur or threat to happen, is pervasive and not suitable for business.

 

Higher Education Institutions are home to large number of students, faculty, and staff.

Risk, when occur or threat to happen, is pervasive and not suitable for business. Any operations management involves identifying and managing risks that threaten the execution of operations. Higher Education Institutions are under pressure from the stakeholders to manage risks. There is also force of being dynamic in a competitive environment. Conventionally, risk management roles were delegated to operating units. Unfortunately, the approached fail due to a lack of risk mitigation strategy.

It is being replaced by enterprise risk management that higher education institutions are required to implement. Due to numerous relationships with stakeholders, operation uncertainties and threats HEIs are required to implement enterprise risk management to mitigate losses.

Some drivers have resulted in increased pressure on HEIs to change their approach to risk management.  Risk Management代写

Foremost, universities and colleges are facing fierce competition for faculties, students, staff, and financial resources. Faculties focus on providing upscale programs comparative to other institutions. Underfunding and under-enrollment are lurking threats to faculties and require prior planning strategies to mobilize resources and increasingly attract a large number of students. On one end, managing staff can be challenging if no control measures are put in place.

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Some of the risks include poor public relations, poor practice experience for students, violence, and unproductive staff.  However, to reduce the risk with a team, excellent communication and relationships with the institution are supposed to be maintained coupled with robust risk management. On the other end,

Additionally, the control and protection of financial resources are significant concerns of all higher education institutions.  Risk Management代写

Lack or inadequate financial support may cripple the operations. There are three categories of financial resources that need to be protected, including money, goods, and services. Money includes cash and bank balances. Products are the assets of the institution. Services are programs that the institution offers. Proper risk management ensures these resources are protected, and actions are taken to mitigate losses.

Moreover, HEIs are under pressure to increase productivity, responsiveness, and accountability and at the same time, reduce costs. These universal features of any progressive institution (Carothers & Brechenmacher, 2014). These combinations are not easy without an elaborate management system. Also, the process of achieving them increases the prevalence of risks. Therefore, ERM is critical to provide controls and mitigations.

Besides, HEIs are under heavy scrutiny by the government, the public, media, and other interested groups.  Risk Management代写

Any mismanagement is detected and can tarnish the reputation of the institution. ERM help in keeping threats of mismanagement of resources and finances at bay. The availability of powerful technologies is another reason that pressures institutions to adapt to the ERM system. Other causes include an increase in competition in education sector; increase in entrepreneurial ventures beyond the traditional education venues that create stresses and strains on traditional administration and financial infrastructures; a rise in the litigation with a high economic burden.

Therefore, institutions have to come up with strategies to address these drivers of ERM. Managers have to introduce sophisticated risk assessment techniques and dynamic systems that are adaptive to contemporary organizational changes. ERM has been proved to provide robust risk control by offering interlink and alignment between institutional governance, risk management, and the strategic goals of the institution.

Issues that Drive the ERM Solution at Stanford University  Risk Management代写

1.Identify risk across the entire enterprise

2.Assess the impact of riks to the operations and mission

3.Develop and implement response or mitigation plans

4.Monitor identified risks, holding the risk owner accountable and consistently scanning for emergency risks

Benefits of ERM  Risk Management代写

Upon implementation ERM system, HEIs are on the gaining side. There is greater awareness of the risks facing the organization and the ability to respond effectively. The management becomes confident about the achievement of the strategic goals. Most importantly, it is the realization of compliance with legal, regulatory, and reporting requirements as well as improvement in efficiency and effectiveness of operations.

Central Concept of ERM at Stanford University  Risk Management代写

Enterprise risk management of HEI starts with institution management which involves the senate, directors, department heads, senates, and supervisors. The administration forms the ERM oversight committee.

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Risk Management代写

University Risk Oversight Committee

The central idea of establishing ERM is to identify, monitor, and control risks in HEIs. Regarding the concept map above, the main starting point of implementing it ERM is the creation of a risk oversight committee. The committee becomes the epicenter of the whole process and system of risk management upon which other parts of management are derived. The roles of the risk committee may include overseeing the risk management infrastructure and simultaneously address risk and strategy. Also, the committee is trusted to monitor risk, manage risk exposures and advice the management on the risk management strategies. The risk oversight committee controls the whole process of ERM.

Identify Issues in Standford Unversity Management  Risk Management代写

It is the first step in risk management. It establishes the exposure of the university to risk and uncertainty. The committee requires people with intimate knowledge of the institution,  the environment in which it operates, the legal, political, social and cultural context in which it exists and a good understanding of strategies and objectives of the organization. Also important is the knowledge factors that impact the success of the organization as well as threats and opportunities inherent to the achievement of institutional goals. The issue of consideration includes student discipline, faculty efficiency and fund management. Risk identification needs a detailed approach so that all operations are well evaluated and any risk identifiable with them defined.

Possibility of the Risks Occurring  Risk Management代写

The outcomes of identifying risks are used to create a risk profile so that the committee can rank them in the order of significance and impact on the organization. Profiling of risks guides the management in mapping out the areas that are affected or likely to be changed, device control measures, the number of resources required in risk controls. Some of the risks include violent student behaviors, misappropriation of funds, mismanagement in faculties among others. The assessment of risk aims to identify those that management needs to address and hence increase effectiveness and efficiency in operations. The committee carries out prioritization of risk control measures depending on the potential benefit to the organization.

Committee Response Mechanism  Risk Management代写

In response to assessed risks, the university risk committee has options to share or mitigate the risk. The university needs to ensure some perils such as fire and student damages. Sharing the risk involves buying insurance, warranties, guarantees among other approaches. In the bid to mitigate some risks, internal control measures such accounts controls are necessary. The chosen way seek to eliminate or reduce any threats to the project, and also the opportunities to increase their impact.

Implement Mitigation Strategy  Risk Management代写

The committee in alliance with university internal control then implements proposed risk response strategies. In so doing, the committee determines a plan to use, budget, and requirements as well as changes needed. In the process, the team provides a coordination mechanism between the management and other stakeholders. The implementation executes defined and approved risk mitigation strategies, reports the risks at the mitigation and document changes in the plan.

Monitor Performance

When risks are identified, and management chooses to implement mitigation strategies, it is critical to track threats and evaluate the performance of a risk mitigation plan. Continuous monitoring gives feedbacks that help the committee bounce back to other risk management activities, starting with identifying the risk.

Relationship Between Concepts  Risk Management代写

The five main concepts of the ERM are connected to a single flow of events. The reason being they all constitute a risk management process. The university risk committee starts with the identification of risks. After the risks have been identified, the committee then assesses to determine their significance and areas affected. The risk assessment assists the team in device mitigations plan. The evaluation also evaluates the risks to allocate resources for implementation. The whole process would not be complete without proper monitoring of risk mitigation. It is critical to ensure the plan is working and identify gaps. Follow-up marks a transition towards a new cycle in risk management.

Literature Review

Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk management: Review, critique, and research directions. Long-range planning, 48(4), 265-276.

The article informs on the need for ERM in organizations. The report takes a holistic look at the implementation of ERM in institutions and critiques how it has been effective.

Hayne, C., & Free, C. (2014). Hybridized professional groups and institutional work: COSO and the rise of enterprise risk management. Accounting, Organizations, and Society, 39(5), 309-330.

Elaborate on the rise of ERM from an unsuccessful traditional risk management approach. The article view ERM and the most robust and dynamic way of risk identification, control, and monitoring.

Ariff, M. S. B. M., Zakuan, N., Tajudin, M. N. M., Ahmad, A., Ishak, N., & Ismail, K. (2014). A framework for risk management practices and organizational performance in higher education. Review of Integrative Business and Economics Research, 3(2), 422.

The article discusses the practice in risk management and evaluates its effectiveness in improving organizational performance. It informs the whole concept of ERM used in this paper.

And  Risk Management代写

Baxter, R., Bedard, J. C., Hoitash, R., & Yezegel, A. (2013). Enterprise risk management program quality: Determinants, value relevance, and the financial crisis. Contemporary Accounting Research, 30(4), 1264-1295.

The article informs on the best practices for implementing ERM in the organization. There is a correlation between the quality and complexity of ERM determines, resources available, and organizational performance.

Grace, M. F., Leverty, J. T., Phillips, R. D., & Shimpi, P. (2015). The value of investing in enterprise risk management. Journal of Risk and Insurance, 82(2), 289-316.

The firms with a dedicated risk management team perform well compared to those that use traditional approaches. The article support that it is critically important for organizations to invest in ERM for operations efficiency and effectiveness.

AlHadi, A., Hasan, M. M., & Habib, A. (2016). Risk committee, firm life cycle, and market risk disclosures. Corporate Governance: An International Review, 24(2), 145-170.

The researchers intended to find out the importance of separate risk committees in the bid to increase efficiency in risk management. The firms that have dedicated risk team can identify risks early and mitigate them before they occur. The article informs the support for implementing ERM in organizations.

Implication  of ERM  Risk Management代写

Stanford University will be able to control some costs resulting from some risks such as fund mismanagement,  accidents,  student indisciplines,  reputation risk and more.  The university performance in terms of development, student enrolment, research, and standard of education will improve over time.   Risk management maintains the good reputation of the institution and at the same time keep operations relatively costs low.

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Risk Management代写

References

Ariff, M. S. B. M., Zakuan, N., Tajudin, M. N. M., Ahmad, A., Ishak, N., & Ismail, K. (2014). A framework for risk management practices and organizational performance in higher education. Review of Integrative Business and Economics Research, 3(2), 422.

Al‐Hadi, A., Hasan, M. M., & Habib, A. (2016). Risk committee, firm life cycle, and market risk disclosures. Corporate Governance: An International Review, 24(2), 145-170.

Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk management: Review, critique, and research directions. Long-range planning, 48(4), 265-276.

Baxter, R., Bedard, J. C., Hoitash, R., & Yezegel, A. (2013). Enterprise risk management program quality: Determinants, value relevance, and the financial crisis. Contemporary Accounting Research, 30(4), 1264-1295.

Carothers, T. & Brechenmacher, S. (2014). Accountability, transparency, participation, and inclusion: A new development consensus? Retrieved from https://carnegieendowment.org/2014/10/20/accountability-transparency-participation-and-inclusion-new-development-consensus-pub-56968

Grace, M. F., Leverty, J. T., Phillips, R. D., & Shimpi, P. (2015). The value of investing in enterprise risk management. Journal of Risk and Insurance, 82(2), 289-316.

Hayne, C., & Free, C. (2014). Hybridized professional groups and institutional work: COSO and the rise of enterprise risk management. Accounting, Organizations and Society, 39(5), 309-330.

 

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