Entropic Communications ERM implementation
Since the year 2008, Entropic has been making use of Trubiquity'sTrucentrix^TM in order to automate its main functions for instance Purchase Requisitions (PRs). In the year 2012, the company acquired the STBSoC business units from the famous Trident Microsystems. This made it possible for the company to venture into new markets, for example, the United Kingdom, Japan, and China among others. The new office structures that were developed from Trident Microsystems lead to outstanding departments that were not compatible with TRUcentrix during the era. Entropic made supplies on multimedia over other companies at the time. It was decided that the risks had to be monitored semi-annual basis and the Risk Management matrix updated annually. Why Entropic implemented a formal enterprise risk management (ERM) process Improve the risk responsiveness decision Risk within the setting of the company is the financial uncertainty faced by an investor who has invested interest in the company.
Therefore, business risk is the possibility that a firm would have lower anticipated profits or incur loss thus there is a need to be addressed. Therefore, Entropic implemented a formal ERM in order to improve on the risk responsiveness decisions. Business risks are influenced by different factors for instance competition, government, sales volume among others thus there was the need to implement the formal ERM process. Therefore, in order to address risk systematic Entropic had to adopt ERM process. In the contemporary world, the fundamental elements of the process of ERM are an assessment of risk that is significant and response to it. Therefore, for the case of risk responses they had to implement ERM and eventually make sure that risks were managed in the company.
The company had opted to operate globally thus it had to manage the risks. Did the company realize the benefits of ERM as Envisioned by Committee of Sponsoring Organizations (COSO?) Enterprise Risk Management is defined by COSO as a process that is affected by the board of directors, personnel as well as management of any given institution, applied strategically across the enterprise in order to identify any potential activity which may affect entity and eventually manage risk so that they can be within the appetite of the entity. Strategic ensures that an organization has got objectives that are aligned with its mission. Operational is the daily activities that are assumed within the organization while financial reporting assures protection of the property of the company and quality in financial statements.
Compliance means that an institution has to adhere to the laws and regulations that are applicable to the area of operation. Unfortunately, at the enterprise in Entropic Communication, risks were all categorized department wise with the score. Therefore, there was no integration in the overall performance of the organization. In the long run, efficiency will be created thus minimizing risks. Inclusion of threats to business model Moreover, there is the need for Entropic to include risks to their business model. Due to the fact that, the company has decided to venture into different companies, there is a need to consider demand and supply risks. This would make sure that the level of competition in the market. Demand and supply risk are determined by the size of the market and the new entrants.
Recommendation and Conclusion Paying a close attention to the Entropic, it was necessary for it to adopt ERM process in order to manage its risks that arose from their operations. It is quite evident that in the long run that the ERM process would have positive impact on the performance of the risk. Despite that, the company has to embark on control tools that might manage risks for instance adoption of internal auditing tools, provide margin for risks and eventually adopt the COSO framework in order to address any inconsistencies with their processes of operations. The tools would address the issues that are contained and envisioned in the COSO framework. In conclusion, in the current years, external factors have tried to fuel the interest of organizations towards ERM.
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