Companies are called to change or update their business strategies because of how quickly times are changing. If companies do not adapt, they will get left behind.
“We need to be better, faster and more resilient because the world now is more connected and more complex,” said Dr. Maria Elena Herrera, chair of the Department of Strategic Management and academic program director of the Master in Entrepreneurship at the Asian Institute of Management (AIM).
She said that the world has entered a new era of industrial revolution dubbed as Industry 4.0 in which machines, computers, technology, and automation will work together in new ways that will bring the manufacturing process of goods and services to a new level.
“We have to find ways to compete and cooperate,” she said.
Herrera was the resource speaker in the Risk Management and Business Sustainability Seminar recently held through the partnership of the Mandaue Chamber of Commerce and Industry and AIM.
She provided insights on sustainability, strategy, enterprise risk management, risk, and entrepreneurship.
When a company decides to improve its strategy, it must remember and consider who the company is, where it is now, where it is planning to go, how it can get to its desired goal, how the company will do it, and how the company is doing now.
“Every time you add something to your business strategy, you increase the risk,” she said.
Contrary to how some companies tend to view risk as loss, Herrera clarified that “risk is an uncertainty”, and risk management is “quantifying the company’s upsides and downsides in order to achieve risk reward balance”.
“In order to harvest rewards, face risks. Otherwise, you lose opportunity,” she said.
The core enterprise risk management (ERM) process involves risk planning, risk identification, risk analysis, implementation, and monitoring.
According to Herrera, the ERM process allows a company to create value for its customers. #