Enterprise risk management (ERM) is a management technique that provides a systematic way for companies to identify and manage the wide variety of risks in their business environment. Any one of these risks, if not properly managed, could cause the company to fail to meet its strategic goals. As an example, UnitedHealth Group (UHG; www.unitedhealthgroup .com) has adopted ERM to manage the risks in its business environment, which includes a variety of health care businesses, from health insurance to health care claims processing services. UHG classifies its risks into six categories (external environment, business strategies and policies, business process execution, people, analysis and reporting, and technology and data). UHG has identified four to five key risks in each of these categories.

Required
Review the risks identified above and consider a company in a different industry, a manufacturer of auto parts. Identify and explain three or four ways that the ERM for an auto parts manufacturer would differ from that of UnitedHealth Group.

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Analysis and Reporting Performance management Budgeting and financial planning External reporting Market intelligence Technology and Data Technology infrastructure Reliability Business Strategies and Policies Strategy and innovation Business People Leadership External Environment Process Execution Operations planning Customer satisfaction Regulatory compliance Competitor Legal & regulatory Business/product portfolio Skills and competencies Communications Fraud and abuse Catastrophic loss Medical loss/ utilization trend Organization structure Organization policies System security Intellectual capital