I agree that the approach LEGO Company has used to implement its ERM system

Peer 1:

From the LEGO case, I agree that the approach LEGO Company has used to implement its ERM system in the manufacture of toys is appropriate. One of the vital aspect that the firm has is achieving is sustainability, which is an excellent strategy for ensuring the company is economically valuable and competitive in the market. LEGO strives to ensure the company is sustainable by integrating strategic planning and building stakeholder value in the ERM framework. It has executed a return-driven strategy in the structure; hence, it ensures lasting high performance in terms of production and productivity.

Having a structured framework that highlights the strategic process of managing risks in the firm through helps LEGO to make appropriate decisions, plan and execute strategies geared toward the increasing value of the company (Fraser, Simkins, & Narvaez, 2015). Additionally, engagement with external stakeholders, increasing the value of the implemented ERM system in the organization. If I were to change anything in LEGO’s ERM implementation approach, I would include a segment of accountable stakeholder at every step of the implementation to show who is responsible for execution at every level. I would also have a robust monitoring plan in place that will ensure risk information is linked to risk tolerance and risk appetite. Moreover, monitoring allows the firm to incorporate risk appetite with company objectives.

I would implement the same ERM execution approach as LEGO’s because it strategically identifies risks at different levels, which makes it easy to handle risks that have the most significant negatives effects. The use of PAPA model is useful in identifying and responding to risk of different level of severity and speed and guiding on how to respond to them. This distinction enables the firm saves on costs of management risk by focusing on fast and high risks in the firm. I like the way the firm uses strategies to create value, that is, by adopting ROI that ensures there is support from the top management. ROI management encourages stakeholder involvement, resulting in a higher value of ERM

peer 2:

LEGO Group is a toy trading company in Denmark that uses plastic bricks to make toys.

Yes, I agree. I tend to agree with the approach that LEGO used in the implementation of its enterprise risk management system through the integration of the strategy to the ERM reason being, through the integration they are active to any risk incidence. Their strategy for implementation has been developed into four stages, whereby, the first two; the risk management for the enterprise and the simulations for Monte Carlos were based on damage control while the active risk opportunity management, as well as the preparation for uncertainty,were termed as proactive measures. This greatly helps them in planning and keeping track of the progress of their projects (2019).

If I were to change anything in the implementation of the ERM, my main consideration would be the organizational structure. Organizational structure influences the coordination, authority, and communication within the organization as well as resource allocation. I would, therefore, redesign it in a way that employees feel accommodated in the system since they will be provided with the procedure and guidelines on how the system operates. This would as well enhance a clear common goal for all the employees and management for the realization of the organizational strategic objective.

Yes. I would indeed look up to implementing the ERM for my future organization. The reason behind this is that the ERM helps in early project risk identification, assessment, monitoring and control which would help in implementing control measures to correct the diversion. It would also be useful in identifying my long term goals and the timelines with which they are supposed to be achieved and as well, for an efficient allocation of resources. Taking the initiative of the implementation would also help in enhancing my organization’s competitive advantage over others (“Five Benefits of Enterprise Risk Management ERM: CLA (CliftonLarsonAllen)”, 2019).

Peer 3:

In 2006, strategic risks were introduced in Enterprise Risk Management. Till then, these risks were implicitly controlled. CFO Hans Laessoe also stated that along with the traditional ERM, they would also implementing the strategic risks in their portfolio (da Silva Etges, Grenon, de Souza, Kliemann Neto & Felix, 2018). By 2007, the Enterprise Risk Management became a full-time position and full functional department by 2011. This concept of Enterprise Risk Management states that LEGO understands the importance of identifying and understanding the risks and also defining what role does the Enterprise Risk Management plays in the development of the company as a whole (Etges et al., 2018). The Enterprise Risk management team makes sure that the management of the company as well as its employees are well trained to handle these risks.

The LEGO Company is able to use this strategy to figure out worst-case scenarios that help them to identify their ability to sustain the risk. This helps them not just to understand the risks, but also to take more risk which helps them to get ahead of their competition (Li, 2018). These two steps of Strategic Risk Management is also known as Damage Control since this helps in managing risks undertaken by the company.