Module Activity No.
Essay
a. Read this article
[Link]
fire/[Link]
b. Identify 5 possible impacts using the FIRM Risk Scorecard.
Heading of the 5 Possible Impacts of Risk Scor
FIRM risk e
scorecard
Financial Inadequate funds are available (or at an 1
unacceptable cost) to carry out strategic plans.
Inadequately robust procedures for allocating 2
funds for investment
insufficient internal budgetary control 2
environment to detect and prevent and
manage credit risks
Inadequate resources to accommodate historical 2
liabilities (which include pensions) as well as
future anticipated liabilities
Unable to control inflation as well as 2
defaulting on its bonds or other debt issues.
TOTAL 9
Infrastructure Insufficient executive management structure to 3
manage the organization and instill a "Risk
Aware Culture"
Risk Management Plans are insufficiently robust 4
to ensure the organization's survival following a
major loss.
Insufficient physical assets to establish the 3
organization's operational and strategic goals
Inadequate adaptive capacity of data protection in 3
information systems (IT) infrastructure
Unreliable product delivery, transportation 2
arrangements, and/or communication
infrastructure
TOTAL 15
Reputational Poor public's view of the industry and/or the 2
potential for organizational brand damage
Inadequate focus on Corporate Ethical 4
Responsibility Environmental and Ethical
Standards
Poor governance principles and/or a highly 4
regulated industry with strict compliance
requirements
Concerns over quality of products or services 3
and/or after- sales service standards
Loss of customers and falling sales can 4
undermine employee retention.
TOTAL 17
Marketplace Organisation is exposed to potential for 5
international disruption because of political risks,
war, terrorism, crime or pandemic
Supply chain is complex and lacks competition 3
and/or raw materials costs are volatile
Lack of economic stability, including exposure 3
to interest rate fluctuations and foreign
exchange rates
Highly competitive marketplace with 3
aggressive competitors and high
customer expectations
Insufficient revenue generation in the marketplace 4
or inadequate return on investment achieved
TOTAL 18
c. Define each impact using Table 1.6 as your guide Definition of Impact
Descriptor Definition
Small No impact on financial strategic plans. Minor impact on economic stabilization,
organizational brand damage, communication infrastructure, inflation and debt issues,
resources to accommodation of liabilities, internal budgetary control environment,
and allocation of funds or investments.
Moderate Minor temporary impact on the marketplace, supply chain, sales service standards,
information system infrastructure, organization's operational and strategic goals, and
executive management structure.
Severe Serious impact on revenue generation, sales & customer, governance principles with
compliance requirements, Corporate Ethical Responsibility Environmental
and Ethical Standards, and Risk Management Plans.
Catastroph Death due to the incident of fire and serious impact on the organization's
ic marketplace.
d. Explain your answer in no. 2.
The Scorecard shows that possible impact on the given scenario in the article-
which is the NCCC Fire in Davao. So under the Financial Risk, here are the possible
impacts of risk: Inadequate funds are available (or at an unacceptable cost) to carry
out strategic plans; Inadequately robust procedures for allocating funds for
investment; insufficient internal budgetary control environment to detect and prevent
and manage credit risks; Inadequate resources to accommodate historical liabilities
(which include pensions) as well as future anticipated liabilities; Unable to control
inflation as well as defaulting on its bonds or other debt issues. With the total scores
of 9 in the risk scorecard. Under the Infrastructure Risk, the possible impacts of the
risk are: Insufficient executive management structure to manage the organization
and instill a "Risk Aware Culture"; Risk Management Plans are insufficiently robust to
ensure the organization's survival following a major loss; Insufficient physical assets
to establish the organization's operational and strategic goals; Inadequate adaptive
capacity of data protection in information systems (IT) infrastructure; Unreliable
product delivery, transportation arrangements, and/or communication infrastructure.
With the total scores of 15 in the risk scorecard. While the possible impacts of
Reputational Risk are: Poor public's view of the industry and/or the potential for
organizational brand damage; Inadequate focus on Corporate Ethical Responsibility
Environmental and Ethical Standards; Poor governance principles and/or a highly
regulated industry with strict compliance requirements; Concerns over quality of
products or services and/or after-sales service standards; Loss of customers and
falling sales can undermine employee retention. With the total scores of 17 in the risk
scorecard.
And the possible impacts of Risk in Marketplace are the following: Organisation is
exposed to potential for international disruption because of political risks, war,
terrorism, crime or pandemic; Supply chain is complex and lacks competition and/or
raw materials costs are volatile; Lack of economic stability, including exposure to
interest rate fluctuations and foreign exchange rates; Highly competitive marketplace
with aggressive competitors and high customer expectations; Insufficient revenue
generation in the marketplace or inadequate return on investment achieved. With the
total scores of 18 in the risk scorecard. Which goes to show in the FIRM Risk
Scorecard that the likelihood of Financial Risk has low-impact risks and will be
tolerable. While in the Infrastructure Risk there is a medium-likelihood and there will
be a medium-impact risk on the Reputational Risk and will require some judgement
before acceptance. However, the highlikelihood/high-impact risks fall on the
Marketplace Risk and will be intolerable.
