Risk Management in Emerging Markets
Emerging markets pose different challenges from operational to financial risks; yet emerging markets often reveal possibilities for diversification and economic growth. How might an organization considering operations in an emerging market alter its risk management framework for that market? What additional factors need to be considered and added to the COSO framework? Can any components of a typical framework be discarded? Write a 2- to 3-page memo to senior management outlining and validating the factors that need to be considered.
To: Senior Management
Date: 19th June 2012
Subject: Outlining and validating the factors need to be considered while managing emerging market risk
This memo defines the way by which organizations can alter their risk management framework in order to manage the emerging market risk in an effective manner. High growth economies or emerging markets are associated with rapidly changing, highly complex and diverse risk environments. On the other hand, these markets also provide tremendous opportunities for organizations. It is the reason that it is important for organizations that they clearly define a risk strategy in order to ensure the long-term sustainability of businesses in these markets.
Bribery and corruption is one of the challenges that companies can face in the emerging markets. It includes commercial bribery, conflicts of interest, vendor collusion, fraudulent financial reporting and government officials' bribery (Boets, 2008). In order to overcome this issue, it is necessary that organizations effectively frame their risk management framework. By including some factors such as establishment of suitable standards and their implementation with the help of effective training and communication program, carrying fraud risk assessment, development of anti-corruption internal controls and investigation and disciplinary protocols companies can alter their risk management framework.
Additionally, by considering IT matters at the initial or planning stage for entering into emerging markets, companies can increase the potential for ...
The solution discusses risk management in emerging markets.