Business Risk Management questions

Week 8 Class Questions

The questions should be answered in point form. Limit your answers to four pages in total. Answer all questions. Your written answers should be submitted to Turnitin by 2 pm Monday of the relevant week.

Answers will be discussed in class. Be prepared to talk about your answer in class if requested.

The questions relating to the readings/lecture are designed so you can demonstrate that you have read or listened to the course materials and you are developing your understanding to sometimes analyse the concepts contained in the readings.

The questions relating to the case study are designed for you to demonstrate an understanding of issues that arise in practice and to analyse the concepts in the readings in that context.

Readings/Lecture

1. In his article “How risky is your business?” Simons proposes a diagnostic tool called the “Risk Exposure Calculator”. Using the Lincoln case study, identify where you think Lincoln would have scored in relation to its offshore expansion and early management of the offshore businesses against the nine pressure points with supporting reasons.

2. Simons asserts that his levers of control framework addresses “internal” rather than “external” risk exposure. Do you agree? Is it useful to distinguish between internal and external risk exposure in understanding how risk is managed?

3. Birkett argues that “The creation of control structures in an organisation is a deliberate process involving trial and error, fine tuning, and the need to address constant change” (p2). Why do you think that this is the case?

4. What according to Birkett (p8) is the role of control systems in the process of risk management?

5. Birkett contends that control structures may be deliberately established or may emerge over time. Using the Lincoln case study describe how a revised control structure emerged from the problems with the overseas expansion, rather than being deliberately established initially?

6. Explain how risk treatment relates to risk appetite. Describe Birkett’s five options in managing risk (risk treatments). Give an example how each treatment might be achieved.

Case Study – Maytag

The Maytag case study illustrates issues with expanding offshore and then managing offshore businesses.

1. Using the Simons Risk Exposure Calculator select two high risk pressure points associated with the overseas expansion by Maytag and provide supporting reasons for the high rating.

2. Which of Simon’s control levers do you think could have been applied by Maytag to manage the UK business (which created the loss leader promotion) and give examples of control activities?

3. What similarities are there with Lincoln in terms of governance issues?