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Coca-Cola Enterprises Formulated A Formal Risk-Assessment Approach Essay

Coca-Cola enterprises formulated a formal risk-assessment approach in 2003 that divided their business environment into 5 categories: financial, operational, social, environmental and ethical considerations. In order to better assess the various risks that potentially impact their business in each of these areas, they divided each of these into a further six categories:

Reputation and Image,

Business and Operations,

Political and Regulatory,

Market and Financial,

Information Technology and Business Process Change,

People and Organization.

By focusing attention on each sector in turn and paying close attention to potential risks and possible market changes, Coca-Cola is able to move towards the future in a progressive and optimistic manner.

An example of their risk evaluation in operation is paying attention to the People and Organization sector when, Coca-Cola may, and indeed has noted in the past, that consumers are more interested in healthy beverages. Seeking the best for their organization and seeking profit rather than loss, the management set about producing innovative beverages that would satisfy this new trend.

In 2005, the management decided to review their risk paradigm and the planning structure on...

Executive sponsors are chosen for each of the 6 sectors and each of these sponsors are responsible for reporting on their specific category to a Board of Directors or to certain board members as the case may be.
In 2010, Coca Cola also requested an external agency to review their risk assessment approach and to recommend improvement.

In their mundane operational level, each facility at Coca-cola also has its own comprehensive risk assessment along with a mitigation programs. The Coca-cola company and the Coca-Cola Enterprise work closely and jointly together to maintain a joint Incident Management and Crisis Resolution process.

Coca -Cola also has a similar set up in other parts of the globe such as in Europe in order to predict, prevent and deal with risks that may occur and to minimize negative impact on employees, consumers, customers, assets and business operations. (Coca-Cola Entreprises Inc. ).

Work invested in preventing incidents from occurring and dealing with risk factors when they do occur can be potentially costly as Ballou et al. (2009) indicate in a macro manner and as Juras (2007) discusses in regards to outsourcing. Organizations have to be cognizant of both direct and indirect costs associated with each of the risk factors. Sometimes, for…

Sources used in this document:
Sources

Ballou, Brian, Heitger, Dan L., and Schultz, Thomas D., (2009). Measuring the costs of responding to business risks. Management Accounting Quarterly. Retrieved July 26, 2010, from http://findarticles.com/p/articles/mi_m0OOL/is_2_10/ai_n31641694/?tag= rbxcra.2.a.44

Coca-Cola Entreprises Inc. Managing coproate risk. http://www.cokecce.com/brochures/corporate_responsibility/governance4.html

Johnson, Kevin and Swanson, Zane, (2007). Quantifying legal risk: a method for managing legal risk. Management Accounting Quarterly. http://proquest.umi.com/pqdweb?index=0&did=1411673301&SrchMode=1&sid=5&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1301589798&clientId=29440

Juras, Paul, (2007). A risk-based approach to identifying the total cost of outsourcing. Management Accounting Quarterly.http://proquest.umi.com/pqdweb?index=0&did=1411673311&SrchMode=1&sid=6&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1301589926?&clientId=29440
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