Question

STRATEGY EXECUTION——“Strategic Risk Management”

1. Assume you are presenting (as a consultant) the concept of Strategic Risk Management to the executive team at a company that is considering implementing it for strategy execution. The pre-reads for the session included Strategic Risk Assessment Frameworks: A Guidebook for Management Teams Mark L. Frigo and Ricard J. Anderson 2017 and Creating and Protecting Value: Understanding and Implementing ERM Anderson and Frigo (COSO 2020), The CEO asks the following question: What are the primary benefits of Strategic Risk Management and Strategic Risk Assessment? In one short paragraph, please describe how you would reply to this question.

2. Situation: Assume you are presenting (as a consultant) the concept of Strategic Risk Management to the executive team at a company that is considering implementing it for strategy execution. One of the pre-reads for the session is Strategic Risk Management Excerpt from Strategic Analysis IMA SMA 2020 Frigo and Krumwiede, the CFO asks the following question: What are the strengths and limitations of Strategic Risk Management? In one short paragraph, please describe how you would reply to this question.

3. Situation: Assume you are presenting (as a consultant) the concept of Strategic Risk Management to the executive team at a company that is considering implementing it for strategy execution. One of the pre-reads for the session is Strategic Risk Management Excerpt from Strategic Analysis IMA SMA 2020 Frigo and Krumwiede, the CFO asks the following question: What role can CFOs play in Strategic Risk Management? In one short paragraph, please describe how you would reply to this question.

4. For one of the following companies (UPS, Microsoft, Coca-Cola, McDonalds, Harley-Davidson, Southwest Airlines, Abbott, Marriott International), applying the DuPont ROI model, please describe in one short paragraph the top strategic risks of the company using the Strategic Risk Management framework described in Strategic Risk Assessment Frameworks: A Guidebook for Management Teams Mark L. Frigo and Ricard J. Anderson 2017 and Creating and Protecting Value: Understanding and Implementing ERM Anderson and Frigo (COSO 2020).

5. For one of the following companies (UPS, Microsoft, Coca-Cola, McDonalds, Harley-Davidson, Southwest Airlines, Abbott, Marriott International), applying the DuPont ROI model, please describe in one short paragraph what Genuine Assets are at risk of the company using the Strategic Risk Management framework described in Strategic Risk Assessment Frameworks: A Guidebook for Management Teams Mark L. Frigo and Ricard J. Anderson 2017 and Creating and Protecting Value: Understanding and Implementing ERM Anderson and Frigo (COSO 2020).

Answer 1

1. Benefits of Strategic Risk Management are-

• When used effectively , strategic risk management can identify situations in which risk can be a competative advantage instead of strictly a threat to a strategic plan. A good SRM approach helps in communicating risk.It also leads to an effecient strategic planning process.An effective SRM approach will incorporate plans for a risky strategy,communication strategy, implementation and training with the goal of integrating strategic risk management into the decision - making process.

2.Strengths and Limitations of SRM are-

• Strengths-It helps in avoiding insolvency risks of earnings volatility.It promotes better use of capital and reduces cost.It also helps in protection of corporate reputation.It can used as a tool for thinking systematically about the future and identifying opportunities.
• Limitations-SRM is not a box-checking exercise:there are substantial costs and efforts involved to SRM.No company can anticipate all risk events.These risk may occur and cause irreperable damage despite anticipation and preparation.

3.Role of CFO in SRM are-

• CFOs are responsible to issue financial statements and tax returns failing which can place a company in jeopardy with regulators and shareholders.CFO should be continually examining the company's cash flows situation and forecasts to prevent being caught with a surprise shortage.The CFO should not only assess the risk of a M&A activity but also carefully review contracts to ensure a smooth transaction.The CFO must understand all regulations applicable to the organizations and have plans in place for complaince.

4.Strategic risks of Cocacola Co. are- a)Community trust,b)Consumer relevance,c)Customer preference,d)Cost leadership

5.Assets at risk of Microsoft company are-Information Technology,Ebix Inc.,Ring Central Inc.