Running Head: DISSERTATION PROPOSAL1

DISSERTATION PROPOSAL8

Dissertation Proposal

The influence of Enterprise risk management practice on the financial performance

Date

ABC

Title:

In this plan, we are going to discuss enterprise risk management related to the origination and explain how the enterprise risk management affects the financial performance of the organization. Financial performance of the organization has to face many problems and organization needs to manage all these issues related to risk factor. The risk management belong to the factors that affect the performance of the organization by using different strategies and also handle all the risks of financial sector of the organization. Enterprise risk management is not a simple process of removing the risk elements but it also provides management of risk related to operation of the firm. And focus on maximizing the opportunities and minimizing the threats that affect the performance of the organization. Within integrated approach, the enterprise management is a complete set of process that organization undertakes to remove or less all the risk categories. In the ordinary course of carry out its business operations, the enterprise risk management explains as process that discuss the organization deals that mange the risk threats of the organization. (Erin, 2017)

Different risk related to the operations of the organization include hazard risk, compliance, operational, reputational, market, financial, credit and strategic factors handle by the enterprise risk management. These risks also disturb the financial performance, profitability and effectiveness of the organization. Enterprise risk management framework handle the interrelationship between the risks and recognize that how these risk can be treated in all the business activities of all levels. The reason behind the implementation of the enterprise risk management is to develop a balance between the risk management and corporate performance and also enhance the value of shareholders. In the face of financial complexity, the optimal balance should be developing to fulfill the objectives of the organization and its effective corporate strategy. To minimize and mitigate these risks and communicate risk information for the management to take better decision, the enterprise risk management is aggregated and integrate all type of risks through using different risk related tools. (Warr, 2010)

Enterprise risk management explain as an integrated process that develop through the board of director of the organization to mention the potential threats that handle the financial performance. So enterprise risk management process is essential for the organization related risk and provides better solution to handle these risks in most effective way and provide maximum benefit to the organization.

Background/Research motivation:

Enterprise risk management help to handle the risk related to organization and provide a better solution for the organization. Different set of process help to settle the financial sector to make the integrated impact. This process include identify specific risks facing financial institution, linking the enterprise risk management strategy with the identifiable threats and establishment of enterprise risk management strategy and a construct and infrastructure for the risk management and develop a environment of enterprise risk management. The practice of the ERM explain that when the financial institution follow the risk management and also identify all the risks of threats then try to mitigate these threats and also manage all the risks related to the financial performance of the organization. To develop a sustainable future for the organizations, the financial performance of the organization driven the resources of quality of the allocated resources for intangible and tangible assets that also include enterprise risk management. The basic need of measuring the financial performance is to measure the progress of the organization to obtaining the corporate strategies. The past performance evaluation also help to manage the current and future events of the financial sector. (KIPKOECH, 2013)

The enterprise risk management framework provides better solution for the management of the organization to manage the exposure of risk and to manage these risks develops the risk management techniques. To obtain the objective and strategic vision of the organization the enterprise risk management framework is geared. Enterprise risk management develops a strong system to prevent the destruction of shareholder wealth and also boosts the value of shareholders to protect the asset for making the performance more sustainable. Contingency approach is also utilize for develop a strong relationship between the performance and enterprise risk management. Value at risk approach is utilized for the measurement of enterprise risk management with the return of asset to determine the performance of the organization. There are also five different variables that affect the performance of the organization through enterprise risk management. These variables include international diversity, institutional ownership, firm size, profitability and leverage. The firm performance and enterprise risk management both has positive relationship. The enterprise risk management affects the performance of the organization for long term. The enterprise risk management also provides better solution to handle the condition of the organization in different situations and also manage all the risk that damages the performance of the organization. (ERM.NSCU.Com, 2016)

Research aims, objectives, questions:

The main purpose behind these facts is that the enterprise risk management plays a very important role in making the financial performance of the organization better and also handles all the risk related factors that affect the financial sector of the organization. Different research studies conducted for the implementation of enterprise risk management principles on the performance of the firm in long terms and it also examine that how the market characteristics, assets and financial change focus on the implementation of enterprise risk management within the organization. A reduction in the stock price volatility also appears in the adoption of the ERM within the organization. Effective communication is also very important for implementing the enterprise risk management within the organization. As we know that the concept of ERM is a strategic approach that manages all the risks face by the business and also help in enhancing the performance of the organization. In our discussion, we are going to elaborate the basic need of the enterprise risk management and also its impact on the performance of the organization related to its financial sector. The financial sector not only includes the finance but also the assets allocation and utilization of resources in effective manner. (Alawattegama, 2018)

The enterprise risk management also provides a better methods and implementation of effective techniques for making the performance of the organization and also provides organization a smooth way to manage its all risks that affect its financial condition and also settle all the problems that face by the organization. The organization need proper methodologies and techniques for implementing the effective strategies for the enterprise risk management also enhance the performance of the organization in multi direction. Enterprise risk management is very important for implementing effective strategies and methodologies for making the performance of the organization at high level and also provide a clear framework to settle the issues of risk related to the business transactions and also manage the problem of the organization related to financial factors because financial sector is the major part of every organization and it is very important to effective working of the financial sector because without the effective performance of finance no any organization move in the path of profitability and without effective method of financial area no any business can manage its all transactions and operations because no any organization can run without the involvement of finance. (Ahmed, 2016)

Research questions:

1. How the enterprise risk management influence the financial performance of the organization?

2. How much financial operations effect the overall functions of the organization?

3. Which department effect highly due to poor financial performance?

4. How much risks effect the financial performance and how the operations of the organization need more improvement?

5. How the enterprise risk management implemented in the organization and what strategies are utilize for better implementation?

6. How to make the financial performance of the organization make better by implementing the strategies of the effective enterprise risk management?

Initial literature review:

The basic purpose is to develop the enterprise risk management for the portfolio and historic view of the most impacted risks for the objective of the enterprises and its related achievements. The enterprise risk management provide a better way to develop a enterprise view of top down related to all significant risks that effect the business in better way. So enterprise risk management develop a place for all type of risks that appear in the business operations and provide a better solution for the viability of the business in both negative and positive direction. With the executive management and the board of directors, the goal of ERM is to develop top down view of enterprise related to all risks entity and manage the responsibility for setting the leadership and tone for reside the ERM. These all strategies view the organization and manage all the objective of the organization in effective way and also understanding, managing and monitoring the risk significant that affect the enterprise and also view as ultimately responsible . For implementing and designing the enterprise risk management process for the organization by the top management responsibilities. (Searchcio.techtarget.com, 2018)

The board of director also determines the risk for overseeing the identified risk by the ERM process to ensure the management risk taking actions with the risk taking of shareholders’ appetite and also approving and understanding the ERM process of the management. (Alawattegama, The Impact of the Adoption of Enterprise Risk Management on the Industrial Financial Performance:Evidence from Sri Lanka, 2018)

It is very important to understand that ERM is an ongoing process that involve constantly evolve and emerge. Different aspect of the project management also required by the initial launch of the ERM process. With ongoing updates and improvement, when the management considers that ERM process should be active and alive, the benefits of ERM also utilized. There are many elements involve in the ERM process. Because it’s all elements have its own importance and also ERM is a continuous process that monitors the risk, give response, assess and identify all the risk factors according to core model of the organization and manage all the issues related to the organization. (Cgma.Com, 2013)

For strategic value, the ERM obtain better information about all the risks that effect the achievement of the organization and also its basic objectives. The process of the ERM is start with the understanding drive value of the business and also determine the strategic plans for the business by handling these drivers. To the strategic success of the enterprise helps is making the enterprises more innovative and more enhanced as there are many of the different things that not only helps in making the workings more advance and hence it makes to highlight more is deal things well managed and well maintained as well. (Quon, 2012)

Undertaking hazard the board help to deal with the hazard identified with association and give a superior answer for the association. Distinctive arrangement of procedure help to settle the money related part to have the coordinated effect. This procedure incorporate recognize explicit dangers confronting money related foundation, connecting the endeavor chance administration system with the recognizable dangers and foundation of big business hazard the board methodology and a build and framework for the hazard the executives and build up a domain of big business chance administration. The act of the ERM clarify that when the budgetary establishment pursue the hazard the board and furthermore distinguish every one of the dangers of dangers at that point attempt to relieve these dangers and furthermore deal with every one of the dangers identified with the money related execution of the association. To build up a feasible future for the associations, the budgetary exhibition of the association driven the assets of nature of the apportioned assets for impalpable and substantial resources that additionally incorporate venture hazard the executives. The essential need of estimating the money related execution is to quantify the advancement of the association to getting the corporate techniques. The past exhibition assessment likewise help to deal with the present and future occasions of the budgetary area. (COSCO-ERM.com, 2017)

References

Ahmed, I. (2016). Influence of Enterprise Risk Management Success Factors on. 8 (3), 830-836.

Alawattegama, K. K. (2018). The Impact of Enterprise Risk Management on Firm Performance: Evidence from Sri Lankan Banking and Finance Industry . 1-13.

Alawattegama, K. K. (2018). The Impact of the Adoption of Enterprise Risk Management on the Industrial Financial Performance:Evidence from Sri Lanka. Retrieved from https://ideas.repec.org/a/rbs/ijbrss/v6y2017i6p09-20.html

Cgma.Com. (2013). Enterprise Risk Management. Retrieved from https://www.cgma.org/resources/tools/essential-tools/enterpise-risk-management.html

COSCO-ERM.com. (2017). Enterprise Risk Management. Retrieved from https://www.coso.org/Documents/2017-COSO-ERM-Integrating-with-Strategy-and-Performance-Executive-Summary.pdf

Erin, O. (2017). Enterprise Risk Management and Financial Performance: Evidence from Emerging Market. 4 (9), 937-941.

ERM.NSCU.Com. (2016). What is Enterprise Risk Management (ERM)? Retrieved from https://erm.ncsu.edu/library/article/what-is-enterprise-risk-management

KIPKOECH, S. (2013). THE IMPACT OF ERM PRACTICES ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA. 1-64.

Quon, T. K. (2012). Enterprise risk management and firm performance. 263 – 267.

Searchcio.techtarget.com. (2018). enterprise risk management. Retrieved from https://searchcio.techtarget.com/definition/enterprise-risk-management

Warr, R. S. (2010). The Effects of Enterprise Risk Management on Firm Performance. 3-12.