The project would deal with the creation of Research portfolio on the risk management relating to the Volkswagen Case of car emission. The risk management would be assessed thoroughly, its process and the steps to be followed in order to execute the risk management is to be analysed. This would be followed by the discussion on the relation or the risk associated with the concerned case study. This would help in acknowledging the risks that were associated with the problem of the case study. The steps, which were taken as a solution to the problem discussed in the case study, are relevant or not would be known. By the end, some recommendations and the conclusion about the project would be presented which would summarise the whole project.
Risk Management Process
The risk is something, which comes as a complementary effect or item along with every object or action. Evaluating risk is essential for smooth progress of the organisation and the larger the step to be taken the greater is the risk. The businesspersons carry huge risks in business, which can either be the positive, or negative result, if it turns out to be positive then the business gets profits but in the case of negative risks, the business may have to suffer huge losses. Here, comes in the need for risk management and planning. This involves a process (Giannakis & Papadopoulos, 2016). It can be defined as the process of identifying, monitoring, and managing the potential risks so that the negative impact, which may occur in the organisation, would be minimized or avoided. Some of the potential risks are security breaches, cyber-attacks, data loss, system failures, and natural disasters. The process of risk management helps to identify the most affecting risk of the organisation along with the solutions or actions that need to be taken in order to avoid the concerned risk is also revealed (Bromileyet al. 2015, p.265). Risk management in necessary because it enables the organisation to restrict the loss and systematic growth of the company. An effective and accurate risk management follows the following five processes, which help in identifying the biggest threat to the organisation and provide guidelines in order to tackle the risk. If the concerned five steps were followed with care and accuracy then it would help in facing or tackling huge risks with minimal loss (Hasanet al. 2016, p.80).
Steps for Risk Management: Identify the Risk
The first and one of the accurate tasks or process is to identify the risks that may take place in the organisation or in the workings of the business. The risk team should have the foresight to see and acknowledge the risks that can or may occur in the future or in present (Tait, 2018).This is an important step as all the other steps rely on this step until a risk is identified how can a solution to it be present. Identification of the risk includes several evaluation of the scene and also previous risks must be evaluated for better identification. The risks associated with the organisation say management risk, financial risk, marketing risk, or any other risk in any area of the organisation should be clearly identified and discussed (Indrawati et al. 2018).
Analyse the Risk
Once the risk is identified, the next step is to analyse the risk from every aspect and the consequences which it may give rise to should be predicted or taken into consideration. The nature of the risk and the extent to which its occurrence may affect the organisation or create obstacles to achieving the organisations' goals and objectives should be clearly analysed (Howes et al. 2015). This would help in measuring the extent of the risk which is the third step in the risk process. Not only would that, analysing the risk help the organisation to make the viable plan to reduce the loss. The analysis should be based on the occurrence and non-occurrence of the risk that is the effects of both the situations should be analysed as this would help in fighting back the associated risk.
Evaluate or rank the risk
Evaluating or ranking the risk relates to the measurement of the risk. In other words, in this step, the extent to which the risk would affect the business or the organisation would be measured. This helps in preparing for the situations where the occurrence of the expected risk, the methods or actions that would make the risk irrelevant not unaffected on the organisation (Cogliano et al. 20150. The risks if are ranked quite accurately then the effect and the consequences that may arise from the occurrence of the risk would get accurate solutions. It is an important site in the risk process because it helps in deciding which risk is to be taken into consideration first.
Treatment of the risk
After ranking the risk, the first ranked risk is to be assessed and a trial should be initiated in favour of non-occurrence of the risk. This should include the strategies or plans to fight back the effects of the risks occurrence. It should be the goal to minimize the probability of occurrence of the risk or reducing the negative impact its occurrence may have on the organisation. The mitigation risks strategies, contingency plans, and preventive plans are to be developed under this step concerning the first or highest ranked risk (Wolke, 2017). It is an important and vital step in the risk process as the solution or the method to fight back the effects of risk are developed under this step.
Monitor and review of the risk
This step which is the final step in the risk process is where the risks are monitored that is the solutions to the risks are checked and are reviewed so that its implications would provide the maximum benefit. This step involves the reviewing of the solutions along with the risks taken into consideration which acts as a checker and increases the accuracy of the solutions for the concerned risk. It is an important and vital step as this helps in getting the result from the solutions provided or planned before its implications which could be done again in case it is felt that the solution would not help in fighting back the risk associated with it (Glendon, 2016). This increases the efficiency and the output of the solutions or plans or of the strategies.
Relating to the case study
The risk management would be assessed thoroughly, its process and the steps to be followed in order to execute the risk management is to be illustrated. This would be followed by the discussion on the relation or the risk associated with the concerned case study. The case study of the Volkswagen emission testing, which revealed that it was found by the US Environmental Protection Agency that the diesel-powered passenger cars of Volkswagen cleared the emission test. In fact, the concerned company cheated on the test and it was revealed by the US Environmental Protection Agency, publicly. This made the Chief Executive Officer (CEO) of Volkswagen resign from its post. It was revealed that about 11 million vehicles contain the defeat devices. The government charged about US$22 billion of the amount as a fine for this fraud to the Volkswagen. By the US, fraud charges were laid against Executive Oliver Schmidt.
This study provides a wide range of analysis from both the company's side and from the government or US Environmental Protection Agency. Had the emission test been more accurate and efficient, the occurrence of such cheat would not have taken place.
The company or the organisation should have been ready with the contingency plan for the occurrence of such risk. The company knew about the fraud which it has executed so it should have made some preventive or contingency strategies in order to fight back or face the occurrence of the concerned problem. The organisation's risk managers were not efficient and the very first step of the risk process that is "identifying the risk" has been ignored. Had the risk management team been effective it would have acknowledged the threat of disclosure of such fraud. Due to the negligence of the risk managers, the company had to pay a huge amount as a fine to the government and also the CEO of the organisation had to resign from his post (McNeil et al. 2015). Had the company been ready with the risk planning, it would have been able to save some money from the fine amount and even the CEO, who was a gem for the organisation would have stayed back. The company should have planned the strategies to make the government understand that it was not a fraud but some mistake of the emission tester and of the project planner. The company was unaware of the truth. It was the inefficiency of the risk management team at Volkswagen due to which the company suffered.
Government and US Environmental Protection Agency Perspective
The government has been intent or casual regarding the emission test due to which it was unable to track the fraud of the Volkswagen. The government should have been more accurate and efficient in the emission test, as it is a matter of health concern for the public. Concerning the US Environmental Protection Agency, it has been quite apt with the risk management process and the planning for the steps to be taken on the occurrence of the situation or risk was quite clear and justifiable. The agency with no second thought just took up the step and announced it publicly that the diesel-powered passenger cars are harmful to the public. This with no worries, made the Chief Executive Officer of the organisation to quit his position as he is responsible for every action that is taken in the organisation (Hillson, 2017). The government just fined up the organisation, which made no difference in the pollution created by the concerned harmful car. However, yes, it was a strict step and a lesson to other organisations because of cheating the government. The government could use that fined money in planting more trees in the country, as this would add on to the purity of the environment. The United States Environmental Protection Agency has played an important role in saving the environment and has effectively followed all the steps of the risk process management, it identified the risk promptly, analysed it accurately, evaluated and ranked it at the first and priority basis, provided zest treatment to it and monitored it effectively.
Reflection on a case study
Ongoing through the case study it has been found that the company Volkswagen has played quite illogically and has not considered the health of the public on the priority list. The benefit and the profit which it would get from the diesel powered passenger car was the only point which was considered by the organisation. The government has rightly fined the organisation with a huge amount of US$22 billion, which would act as a threat to other organisations. The United States Environmental Protection Agency has acted quite commendable and has been accurate with its work. The announcement of the Volkswagen fraud, in public, attacked the goodwill of the organisation which acted as a punishment for it. The agency made the CEO feel guilty and made him resign from his post which was quite apt for the organisation. As CEO is a person without whose approval no action takes place in the organisation. The government and the agency have used the five processes of risk management quite effectively and accurately which is a commendable action. Both the bodies have been at with the planning of the risk management and this has been the reason for its success over the cheating of the concerned organisation.
Conclusion and recommendations
On acknowledging the case study and the risk management processes, it has been noticed that the case study which has been provided had many loopholes which were the reason for the failure of the organisation's actions. Few of the recommendations for the organisation, for the government and for the agency has been provided below.
- The organisation should have been prepared itself with the risk management strategies beforehand as this would have helped the organisation in facing the situation when its fraud was revealed. The risk process of identifying the risk has been ignored completely which was the biggest loophole for the company.
- The government should be more specific and accurate in taking the emission test as it is concerned about the health of the public. The government's inefficiency in providing an accurate test is the loophole due to which public had to suffer.
- The US Environmental Protection Agency has no doubt acted quite reasonably and effectively but it could still improve its workings, which would analyse the hazards to the public more efficiently.
The project has provided with an in-depth knowledge of the topic and the case study which has been provided revealed the ways in which the big organisations creates hazardous to the public. The efficiency of the government and that of the environmental protection agencies have been revealed which is commendable. The project has been provided with the detailed study of the risk management process and how it could have been applied in the given case study has also been discussed quite accurately. The personal views on the case study and the actions taken by the government and by the agency have been provided which would act as a helping tool to the three concerns. Overall the project has been interesting and knowledgeable.
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