Enterprise Risk Management
September 24, 2012
Enterprise Risk Management
Enterprise risk management (ERM) is the latest name for a risk management approach to business risks. Forerunners of this term include corporate risk management, business risk management, strategic risk management, integrated risk management, and holistic risk management (D'Arcy, 2001).
Implementing the techniques of ERM will allow businesses to manage any potential tort issues and manage any potential civil suit cases. Tort is defined as a wrongful act or damage done willfully or negligently. The circumstances involving a tort can be strict liability or breach of ...view middle of the document...
Failure to warn of possible sharp edges is a defect in design, which will support a strict liability action. A person injured by a defective product may bring an action for negligence against the negligent party (Cheeseman, 2010).
Finally, the editing system did not have enough memory required to complete the task the product was produced for. QTV was also advised verbally this editing system would be up and operating in a day and a half and would increase productivity. This is also intentional misrepresentation of quality. NLP made false representations to QTV about the product. NLP is the “expert” in this equipment and QTV relied on their expertise.
Misrepresentation of quality is a tort violation found in the product liability video. NLP leased an editing system that did not perform as advertised. Therefore, NLP, the manufacturer can be sued for breach of warranty because “breach of warranty refers to the failure of a seller to fulfill the terms of the promise, claim or representation made concerning the quality or type of product” (Free Dictionary, 2011). A breach of warranty suit could be filed by QTV against NLP because NLP misrepresented the quality of their product by stating that this editing system would save QTV a substantial amount of time and the editing system failed in this area. NLP also misrepresented the quality of their product by not having enough memory in the editing system that was leased by QTV to complete the work that needed to be done. Along with the memory issue, the editing system had quality issues where the editing system would keep crashing that took valuable time away from the employees of QTV.
Enterprise Risk Management Techniques
To avoid the tort violation, NLP could have instituted the 7 step Enterprise Risk Management process as described by Harb. Using the enterprise risk management process, NLP may have found the following results:
Management Commitment: NLP managers must oversee the production and testing of their products to ensure employees are following the proper procedures in manufacturing. This will ensure...