Written Assignment 250 word minimum Operational risk can sneak up on an organiza
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Question
Written Assignment 250 word minimum
Operational risk can sneak up on an organization that is not vigilant. What looks like an opportunity can become a risk. Success with an operational process today can quickly become a failure tomorrow.
From a global perspective find an event that occurred in the last ten years that illustrates the negative effects on an organization that did not properly plan for operational risk. Be sure to name the business involved, describe the event, and explain how it could have been avoided or mitigated.
Explanation / Answer
This is a very good question, and working on this question will give you a good idea of how not properly planning for an operational risk can resutt in the organization shutting down.
The most priminent example which comes to my mind would be that of Kodak. Here we have an organization which was doing very well during its time in the field of photography. Whether it was about the photo studios, manufacturing cameras, or about the film based prints, Kodak was one of the market leaders during the time that it existed.
However, Koda failed to note one major change in the industry at that point in time - digitisation of the photography industry. Back then, people were initially banking on physical prints of photos, and this is where majority of the money was made. However this was seeing a tectonic shift with the advent of more digital modes of capturing and consuming photographs. Kodak failed to note the fact that if it does not change its mode of operations to accomodate for this shift towards digital, it could collapse.
Kodak made the mistake of assuming that since it is the market leader in its field currently, there is no drastic change which can happen in this field. However, as people got hold of digital modes of capturing photographs, such as the digital camera and the smartphone, people started avoiding the "film". It was no longer required to print a photograph anymore. Kodak completely overlooked this major risk.
It could have been avoided if the operations team and the marketing team together had the foresight to know that their business model had to change - they had to embrace manufacturing either digital cameras or add value to digital photography. This is where the future was. They needed a proper risk mitigation plan and a end of life analysis for all of their products. This was clearly missing. Had they invested enough in making sure that the change in the company's approach accommodated for manufacturing either digital cameras, or ensuring that their outlets servied the digital needs of consumers, they could have probably continued being the market leaders even today.
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