Question

This Critical Thinking assignment is based upon a published case study. View the case study Kopia, J., Just, V., Geldmacher, W., & Bubian, A. (2017) Meaning and Usage of a Conceptual Enterprise Risk Management Framework - A Case Study (Links to an external site.). Ecoforum Journal, 6(2). Retrieved from http://ecoforumjournal.ro/index.php/eco/article/view/597/384

Review the case study and write a 4-5 page essay addressing the following questions and support your answers:

1.       What is the meaning of risk management?

2.       What is a common risk management strategy?

3.       What are the main elements of Enterprise Risk Management (ERM)?

4.       Why should ERM also cover risks associated with sustainability?  

Answer 1

1.risk management strategy refers to management of various kinds of risk, whether it is systematic risk or unsystematic risk of the company in order to to maximize the rate of return.

systematic risk refers to all such risk which are market risk and it cannot be eliminated but these can be be minimised by better allocation of the portfolio.

unsystematic risk on the other hand means that firm specific risk and this risk can be eliminated completely by diversification of the assets.

A company should focus on better management of risk in order to minimise the threats associated with the business and maximize the opportunities and the profits.