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QUESTION 2 - CASE STUDY ? 25 Marks Grant Limite...




QUESTION 2 - CASE STUDY ? 25 Marks Grant Limited has been a highly innovative company with a senior management dominated by scientists, who encouraged the Research and Development (R & D) staff to follow through their own ideas. The company was committed to high quality goods designed to fulfil the customers? requirements. The company had no complex planning systems and was undergoing change as the company had grown considerably in a short period, especially in terms of overseas expansion. A new chairman has been appointed and there is a belief that the company has become too committed to short-term goals. The business environment in which the company is operating is changing; increased variability in interest rates, high rates of inflation in some operating divisions, shorter life cycles for some products, scarcer and more expensive resources, and there is a declining demand for the company?s core product. A database has been set up to generate information about the company to enable managers to learn from the actions of others. However, no significant new ideas have been generated. These new arrangements also attracted some internal criticism that the knowledge capital of the company was not being properly managed. Recently the company failed to make its own financial targets for the first time in its history. The company has also announced job cuts throughout all of its operations and there have been significant inventory write-offs. Several unproductive divisions have been sold and the company has attempted to establish a higher international profile through corporate advertising. Senior staff members have been leaving to take up lucrative appointments elsewhere. As growth started diminishing, the company started borrowing heavily to finance many of its deals. Some of the borrowings allowed the company to pay large dividends. Grant Limited had invested in a large number of other activities and businesses, completely unrelated to its core business. The company had made a large number of highly speculative and ultimately poor investments. During the last few years Grant Limited has portrayed the company as a socially responsible organisation through its concern for the environment, its involvement in local communities and its activities in the emerging nations. The company was also keen to stress its empowerment of the workforce. As a top risk management graduate you have been consulted in this regard. REQUIRED: Prepare a risk management report to top management containing the following:- (a) The risk issues that would concern the CEO; and (15) (b) The consequences of ignoring these issues? (10)


Paper#2507 | Written in 18-Jul-2015

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