Verizon Communication Case Study

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Recommended: Enterprise risk management essay

Rashida Hart
Professor Rothman
March 19, 2014

Enterprise Risk Management
Verizon Communications, Inc.

In today's volatile environment, companies have to be prepared to manage their portfolio risk in order to remain sustainable and viable in today''s economy. Risk are inherent and can arise at any moment. To avoid or limit risk, a company has to have an effective Enterprise Risk Management (ERM) team or plan in effect, lead by an effective Chief Risk Officer (CRO), such a myself. As CRO, my overall purpose is to provide leadership and direction for an effective enterprise risk management framework of risk for the organization, so that the company can increase customer churn and revenues.
Verizon Communications Inc., is a Dow 3 company, with a diverse workforce of over 180,000 employees around the world. Verizon Communications, operates under two business segments; The wireless sector, which provides voice, data, and equipment along with other services globally. The wireline sector is the other half of the business, which provides voice, internet access, video, data, long distance and other value added services globally as well. At Verizon, we believe that identifying and prioritizing risk is an imperative practice that all enterprise organizations should have. We have identified six key factors and prioritized them in order of highest risk.
Market risk is the first risk factor that we identified as affecting the company's framework. There are three types of market risk, including trading risk, asset/liability mismatch, and liquid risk. Verizon is exposed to various market risk, which include interest rate changes, foreign currency, exchange rate fluctuations, changes in investment, equity and commodity prices and cha...

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...long term cash flow. Credit risk, which is attributed to defaulted obligations by the counter party. To reduce the risk of liabilities, we have to alter our strategy to one that is liability driven. The second important risk factor would be technological, being that the entire network relies upon updated and efficient technology to stay ahead of the competition and provide new and improved services that our customers need. The third risk factor would be the financial risk factor, which currently has no significant exposure to foreign currency fluctuations.
When done correctly, Enterprise Risk Management, can be a transformative tool to help any organization improve their business performance. Managers and front line employees need to develop the ability to identify opportunities, roadblocks, or hazards that can destroy the organizations strategic goals.

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