Final answer:
Enterprise risk management is falsely considered as only focused on negative risks related to competitiveness and success. In truth, it involves a broad scope that includes identifying, managing, and balancing both negative and positive risks to ensure the organization's sustainability and success.
Step-by-step explanation:
The statement that enterprise risk management is concerned only with risks that could negatively affect a company's competitiveness and success is false. Enterprise risk management is a comprehensive approach to identifying, assessing, managing, and monitoring all types of risks that an organization faces. This includes not only those that have the potential to negatively affect competitiveness and success but also includes risks related to financial, strategic, operational, and other objectives.
It is important to recognize that enterprise risk management is about balancing risks and opportunities. This balance helps ensure long-term sustainability and the achievement of the organization's objectives. Risks can have both negative and positive outcomes; thus, a well-crafted ERM strategy will address both sides to harness potential opportunities while mitigating adverse effects. For example, while companies must manage the risk of market competition that might impede growth, they must also equally consider the risks associated with innovation and technology adoption that, if ignored, could provide competitors an advantage. Hence, enterprise risk management encompasses a wide range of activities, and any activity that does not contribute to the organization's ultimate success is seen as contributing to potential failure.