The risk term used within the Environmental Management is a mixture between both the individually perceived and the quantifiable term of risk mentioned above. Whereas the latter includes mainly risks regarding economic objectives such as profitability and high sales figures, the first also focuses on non-economic such as corporate image (ibid). It should be stated that you find a lot of literature that differentiates between environmental and ecological terms meaning that environmental risks are those “to human health from exposures in the environment at large” (Calow, 1998, 2) and ecological ones only those that could harm populations and non-human communities (ibid).
Table of Contents
1. The term risk within the Environmental Risk Management (ERM)
1.1 Term definition
1.2 Applied term of risk in the Environmental Management
2. Environmental Risk Management
2.1 Typical ERM tasks
2.2 Risk analysis
2.3 Strategies to cope with environmental risks
2.3.1 Reason orientated strategies
2.3.2 Effect orientated strategies
3. ERM: strategic tool or a technique for public relations purposes
Objectives and Core Topics
The assignment aims to determine whether Environmental Risk Management (ERM) serves as an effective strategic instrument for minimizing corporate costs and ecological impact, or if it is primarily utilized as a public relations tool to enhance corporate reputation. It examines the theoretical definition of risk, analytical management structures, and the strategic choices available to contemporary firms.
- Definitions and classifications of environmental risk.
- Methodologies for conducting risk analysis and ERM.
- Strategic approaches: Reason-orientated vs. Effect-orientated strategies.
- The dichotomy between strategic business integration and PR-driven policy.
- The role of the Risk Management Cycle in corporate decision-making.
Excerpt from the Book
3. ERM: strategic tool or a technique for public relations purposes
With ERM being closely related to a company’s stakeholders, critics often claim that managing ecological risks is not a strategic tool but more a technique for public relations purposes in order to satisfy main interest groups. To what extent this fact might be true and what points can be made to show that ERM can be an effective strategic instrument, will be content of this final chapter.
Since most companies nowadays have already integrated risk management systems for other business functions, it is clear that ERM can go hand in hand with general business thinking (Pritchard, 2000). If big firms conduct Contingency Planning for product campaigns, why shouldn’t they then include also environmental issues in it besides potential threats by competitors, customers and so forth? This would then mean that they focus also on possible ecological risks that could harm any chosen strategy and thus explain that ERM is much more than regarding only main stakeholder interests.
Those influencers from outside the company like the social community or the government for instance may put pressure on firms and its management to look more after and to protect the environment, but the decision whether and especially how to do it is due to the appreciation of the managers who want to protect both their business and the human society they live in.
Summary of Chapters
1. The term risk within the Environmental Risk Management (ERM): This chapter provides a foundational definition of risk, distinguishing between general, quantifiable, and subjective perspectives, and applies these to the corporate environmental context.
2. Environmental Risk Management: This section details the practical application of ERM, focusing on identification, risk analysis methodologies, and the specific strategies—both reason and effect orientated—that companies employ to maintain security levels.
3. ERM: strategic tool or a technique for public relations purposes: The concluding chapter synthesizes previous findings to evaluate whether ERM is a genuine strategic business tool or merely a PR technique, emphasizing the role of the Risk Management Cycle.
Keywords
Environmental Risk Management, ERM, Risk Analysis, Sustainability, Strategic Tool, Public Relations, Corporate Stakeholders, Ecological Impact, Risk Management Cycle, Reason-orientated Strategies, Effect-orientated Strategies, Hazard Identification, Environmental Policy, Contingency Planning, Sustainable Business.
Frequently Asked Questions
What is the core focus of this assignment?
The assignment explores the dual nature of Environmental Risk Management, investigating whether it functions as a legitimate strategic business tool or as a superficial PR technique.
What are the primary thematic fields covered?
The text covers risk theory, methodologies for identifying and assessing ecological threats, and the implementation of corporate strategies to manage these risks effectively.
What is the ultimate goal of the research?
The research seeks to clarify whether ERM adds tangible value to a company's strategic planning or if it is primarily designed to appease stakeholder groups.
Which scientific methodology is utilized?
The work employs a literature-based analytical approach, reviewing existing models of risk assessment and management to evaluate corporate practices.
What does the main body of the document address?
The main body breaks down the definition of risk, the specific tasks involved in ERM, and categorizes coping strategies into reason-orientated and effect-orientated approaches.
Which keywords define this work?
Central keywords include Environmental Risk Management, Risk Analysis, Strategic Tool, and Sustainable Business.
How do "Reason-orientated" and "Effect-orientated" strategies differ?
Reason-orientated strategies focus on the source and likelihood of an accident to prevent it, while effect-orientated strategies focus on minimizing damages after an incident has occurred.
What role does the "Risk Management Cycle" play in this analysis?
The cycle serves as a foundational framework for communication within the firm, ensuring that hazard identification leads to informed policy decisions and implementation.
Why is the "Shell Brent Spar" incident mentioned?
It is used as a case study to illustrate a scenario where an environmental incident significantly impacted both the corporation and the environment, highlighting the need for robust ERM.
What is the author's conclusion regarding PR and ERM?
The author argues that while critics may view ERM as PR, the integration of risk management into core business functions and the necessity of legislative compliance suggest that it is a essential strategic necessity rather than mere public relations.
- Quote paper
- Johannes Weber (Author), 2005, Environmental Risk Management - Strategic tool or PR-technique?, Munich, GRIN Verlag, https://www.grin.com/document/69930
