Introduction of Enterprize Risk Management
Risk Management is a process which requires the management of business enterprises to apply varied policies and practices in a systematic manner. With the assistance of these procedures the company is enabled to identify, assess, monitor, treat and effectively communicate the element of risk among different layers of business. The present report is an attempt to illustrate the risk management process being applied in Tesco Plc. In pursuance to the same a critical analysis of the existing level of risks shall be undertaken and an effective risk audit shall be conducted. Lastly, the report shall discuss the risk mitigating strategies and the its appropriateness in context of both internal and external risks.
1.1 Brief Overview
Tesco Plc is a retail entity engaged in merchandise as well as is operating grocery stores in more than 12 nations of Asia and Europe. The company is considered as third largest retailing company in the global market and enjoys a market share of about 28.4% in the UK alone. Apart from the mentioned primary business the enterprise is also involved in other operations. One of the major issues which are being faced by the entity are that there was a fall of 1.5% in the sales figure after the famous promotional sale ended in November, 2016 (Tesco – About Us, 2017). This trend continued for significant portion of year, which also led to decline in the share prices by 28.3%. another potential crisis situation which corporate was about to face in relation to over-statement of profits by £250 in the first half of the year. The reason behind this is being stated as overestimation of the money to be received from the suppliers. In pursuance to the same the company has suspended around four of its senior managers. Further it has also been reported that the company has also fallen out with one of the major suppliers and the effect of which could be seen on the sales figure in future (Arena, Arnaboldi and Azzone, 2010).
1.2 Risk Audit
The company has undertaken a robust and systematic assessment of the risks which have the potential to affect the performance of the company in any manner. The risk management process of the entity is undertaken throughout the hierarchy by maintaining a Group Risk Register. All the separate units of the business are required to undertake a regular assessment of the risks which have the potential to affect the operations and other pertinent or local risks which are prevailing in the respective market. This assures a consistent and holistic approach towards ascertainment of risks at every level of business. In order to enhance this existing process the management has introduced a new practice of aligning the principal risks with the priorities. The risks being assessed includes both internal as well as exter