Entropic Essay

864 Words4 Pages
entropic case study ------------------------------------------------- Entropic Corporation 24 01 2014 entropic wittenstein 5 Case Overview In 2010, Entropic Corp. implemented a new ERM system which has the objectives to identify potential events that may affect the entity and manage risk to be within the company’s risk appetite as well as providing reasonable assurance regarding the achievement of entity objective. The ERM process has 5 important steps in it: * Event identification * Disclose the risks factors including business, financial, and liquidity * Lance Bridge (Acting VP of Entropic Corp) sorted the risks by departments * HR * Identify risks by * Functional department * Lifecycle of employee * Marketing * Identify risks by * Functional department * Product line * Risk type * Legal * Uses a risk template from outside sources. * Risk assessment * Prioritizing and rating potential severity to risks * Two-dimensional scoring method are used by all departments * Severity determined by the impact on cash * Risk response * Develops mitigation plans to reduce risks * Communication * Communication takes place only between Lance and heads of department * It is rare for risks to be discussed at formal meetings * Monitoring * Monitor on ongoing basis * ERM matrix is updated on annual basis Disadvantage: * Several departments are against the development of ERM * Finance department has already updated internal control to comply with requirements by Sarbanes-Oxley * Engineering resists formal process and bureaucracy Case Problems * Why did Entropic implement a formal ERM process? * Do you think
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