ERM Adoption and Implementation in the Higher Education Environment Vs. The For-Profit Environment

1 ERM Adoption and Implementation in the Higher Education Environment Vs. The ForProfit Environment Under the normal circumstances, the ERM takes a more holistic approach and calls for management-level decision making, which may not make sense for an individual business unit or segment. There is always the need to have firm-wide surveillance when it comes to risk management instead of every business unit being responsible for its risk management. This may apply to both educational institutions and for-profit organizations.

The ERM prioritizes the strategic areas in for-profit organizations significantly as business segments increase and multiple divisions continue to emerge. However, the ERM in for-profit organizations aims to identify, assess, and prepare for potential dangers, losses, and other potential harms that are likely to interfere with the organization's efficiency and profitability. For the education institutions, the ERM is meant to check on productivity in the form of quality education, responsiveness, and accountability while at the same time striving to cut down on costs. The internal environment is scanned, and indicators are put in place. A lot of monitoring and control activities are also put in place.

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2 Costs are supposed to be minimized through lean production (Bohnert et al., 2019). The controls for educational institutions are only supposed to ensure financial viability and reinforce the planning initiatives and education standards.

Culture is critical in implementing ERM because it affects how the major initiatives are implemented. It also determines how quickly the organization is likely to react to the market changes and whether or not it will be able to navigate through the major transformations depending on the extent to which the ERM deployment was embraced (Mishra et al., 2019).

3 References Bohnert, A., Gatzert, N., Hoyt, R. E., & Lechner, P. (2019). The drivers and value of enterprise risk management: Evidence from ERM ratings. The European Journal of Finance, 25(3), 234-255.

Mishra, B. K., Rolland, E., Satpathy, A., & Moore, M. (2019). A framework for enterprise risk identification and management: the resource-based view. Managerial Auditing Journal, 34(2), 162-188. https://doi.org/10.1108/MAJ-12-2017-1751