Sample Management Case Study Paper on Governance, Risk and Compliance

Governance, Risk and Compliance


In the business regulatory framework, various risks occur in the organizational context.  The risks if not given much attention, would be quite detrimental to the company both in the short and in the long run. These risks transcend from various sections of e a company such the production, sales and marketing, distribution and even the human resource department. In the production department risks such as the noncompliance to the various production standards as stipulated by both the law and the laid down guidelines of the company is crucial. Any lapse that comes from these production stances poses a burden of risk of loss to the enterprise. The losses that can accrue to the production departments entail the under or overproduction of the various products for the market (Roebuck 2012, p.44).

The under production would eventually lead to a high stance of stock out loss. On the hand, the production would lead to the active position of holding costs of the product in question.  On the sales and marketing department, a huge risk of reputation might occur at the point where there is a gap between the information contained in the advert about a product and the experience of the same product. As it stands, the information given to the customer at the point of the advertisement is deemed to create a picture of how the product looks like and hence the company is considered to make sure that there is an exact conformity with the product as well failure to which will lead to much reputational damages.  These are just a few risk areas that need to be given much attention (Christian, Iyer, & Sudhalkar 2014, p.453). In this discussion, we point out the various risk areas that are evident our organization and dwell on the real causes and consequences of these risk areas. In the explication of the actual advents of the risks, we give much attention to the reasons as to why these risks should be a concern to the executive board of a regulated firm. Additionally, we would provide a draft plan on how to address the various risk issues mentioned by allocating the various responsibilities of risk management to the different parties concern such as the departmental heads, the strategic managers, the board of directors and the subordinates among others.

Risks in the customer suitability assessment about the higher risk products

High-risk products are those that have a hazardous stance in their production. These products are deemed to be quite detrimental if at all misused by the final consumer. The production of these commodities requires a high sense of expertise and should be within the regulations of the law. Some of the risks that occur while assessing the product suitability are a lack of understanding on the regulatory framework on the product as stipulated by the government. In this stance, if the product is not produced in agreement with the profound guidelines of the regulatory environment, the company would be faced with a high level of suctions in the production and lawsuits which have a high negative impact on the reputation and the profitability of the same (Miller 2014, p.122). 

Additionally, in assessing the suitability of the product, there is need to outline clearly the benefits sought by the customer who buys the product and how the product would finally meet their needs. This is quite important especially in getting the real advent of customer satisfaction level and how these levels are imperative to their lives as they consume the product. In this case, the company needs to give much attention to the type of customers for the high-risk product, their taste, and preference and make products that are deemed fit for their consumption.  Furthermore, high-risk products require a stratified way of utilizing them. After the making of the product, the inadequacy in the directions to use the product poses a real threat to the company particularly in a time when the product has some technicality on the usage (Moeller 2011, p.34)).  The lack of the guidelines on the use makes the demand of the product to reduce since the customer will now be illiterate on how to use the product for their needs even if they wanted to use it. These related areas while assessing the high-risk products are very critical and would help the company mitigate such risks that come from the assessment of the high-risk products.

Risks in the recruitment process

Human resource department is one of the most important departments that needs to be given keen attention in any given organization. One of the responsibilities that these agencies are charged with is the recruitment of the various employees into the company. This role has its potential risks to the business, and if not done in the most proper way, it is deemed to be quite detrimental to the enterprise. As noted in this case, there is an inadequacy in the recruitment process of the company. In the first instance, the notion of high is created if the expertise and skills of the employee do not match the area of operation in which they are appointed to work.  In this prospect, the employee is deemed not to have the mastery of the work procedures which will ensure efficiency to the company (King, & Khan 2012, p.176). 

With the less expertise, the potentiality of the employee in the company is not optimally exploited leading to mismatch in the directional of the skill to the various parts of the enterprise. The company will eventually be put to the risk of higher employee salary expenses which will eat into the profitability of the enterprise. Additionally, during the recruitment process, lack of proper training for the new staff is very detrimental to the company. The team is deemed not to have the advent of mastery of skill on how the products are being produced or how various departments are being handled. The training is also part of the way in which the organizational culture is inculcated into the new staff. The organization cannot maintain the high reputational corporate culture if it indeed does not have the notion of instilling it into the team at a fragile state. Another area of concern that needs to be looked into as a risk area is the academic qualification of the new staff. A risk occurs where their educational qualification is not up to standard. In the short term, it might not be an issue but in the long term this formulates into a bigger problem. The growth of an employee is dependent upon their academic qualification (Tarantino 2008, p.321).

An employee who is not in the realm of having a higher stance of education will want to continue their studies, and this brings on board a divided attention to the work duties and the schooling. Additionally, the company might want to train them more for them to capture the various work procedures which are a burden to the company and hence increases the expenses of the business as well. Finally, another relevant area that requires a high level of supervision is the notion clear outlining of the roles and responsibilities of the company. In the creation of the job design and the description, if the human resource department does not do a profound analysis on the proper way to accentuate the job description, the company is deemed to fall into a risk of overlapping roles. The job description while assigning task determines the advent of work coordination among the employees and also depicts the type of chain of command that is required for the company to have perfect ambiance for the inception of a proper workflow procedure and a deep organizational structure. It is important to mitigate the risks of overlapping of roles by ensuring that the job description for a particular role is well designed (Steinberg 2011, p.320).

Risks associated with the perceptions of the managers

For there to be a profound risk management strategy that would ensure a high level of mitigation to these risks, there is need for coherence regarding perception of the various managers in the organization. If the attitude of the managers new to this sector does not have the right attitude to combat the risk, then they will not even identify the risk in the first place. It should be noted with great concern therefore, that the company needs to make sure that the managers are with the right attitude (Outsell, Inc. 2013 p.198). Some of the reasons as to why this new manager may not be having the right attitude, might be because they are not conversant with the dynamism of this business and the transcending effect of various risks that are posed in this stance. Additionally, the attitude transformation deemed to take effect through high-level training that is considered to be quite important in understanding the manager’s role in the fighting of the risks in the company. The managers are charged with the responsibility of ensuring that they make an informed decision while carrying out their decision. The main reason for this is that it not only has the effect of changing the behavior of the employees but it also gives much attention to the need to protect the reputation of the company (King, & Khan 2012, p.476). The regulatory framework should be therefore constituted in such a way that the manager will be first made aware of the risks that are involved in this line of business and how best they can mitigate this advent of risks as and when they occur.

Risks from associated with the regulators of the firm

The knowledge of the various regulations instituted by the regulators for the company is crucial to ensuring the sustainability of the business both in the short and the long term. The current situation of events connotes that if the managers do not master the stipulation of these regulations, they are deemed to make decisions that would jeopardize the workflow of the company. For example, in the finance and accounting department, it is the duty of the accountant to properly calculate the taxes by the stipulations of the taxation rules, file the tax returns and pay the tax liability. If the company managers miss out on any of these procedures, the company is ought to have a high stance of a risk of being sued by the tax authorities and a fine for that matter. Additionally, the managers should not only be the directors of the various workforces in the company but also the managers of risks in the enterprise (Roebuck 2012, p.44). The identification of risk is one of the most important skills that a manager should have in ensuring that they deliver in their work. 

The inadequacy in the skill of managing the risks for example on the reputational stance of the company may have a high long term effect on the profitability of the enterprise. The managers should, therefore, be well equipped with the various stipulations of the regulator and give much attention to the consequences they would face while breaching the law in this stance.  In these prospects, the managers should be taken for regular training on the various inherent risks that are available in their workplace and the guidelines on the policy on how to deal with such hazards. For example, in the communication with the media about any company affairs, it is always very proper as an employee not to comment on any issue concerning the business to any media platform. There is a department of corporate affairs that deals with these type public relations to the enterprise.

Any manager is therefore not allowed to say anything about the company since this poses a risk to the firm and at the long end, the company is deemed to have a high sense of risk mitigation through controlling the information about it to the public. In following of the manuals and the guidelines of the various policies of the company, there is a need for multiple managers to separate their opinion and judgment from the stipulations brought out in this stance. The main reason for this is that the managers risk making the wrong decisions if at times they use their intuitions and not following the precepts connoted by the policy manual. As a reminder, the managers should review the policy manuals at every point in time to keep up with the dynamisms of the events.

Risks associated with aggressive sales strategies

Aggressive sales entail the variety of issues that needs to be addressed in their immediate context.  Even as the company engages in the aggressive sales, the salespersons’ motive is to sell as many products as possible without looking at how the product would benefit the customer (King, & Khan 2012, p.176). In this set of proposition, it should be noted that the company will in the long end have a notion of a high sense of misinformation which emanates from the lack of proper knowledge on the product. This experience happens when the sales persons at times lie for the customer to buy the product. In this sense, the reputation of the company is put at a high risk of the satisfaction level that the business product is not what the customer expected. Aggressive sales also lead to exaggerated stances of advertisement. Customer loyalty is based on how the client needs are met and the honesty that the company agents give the clients regarding the product knowledge.

Risks of losing a long-term customer are a high stance if honesty does not prevail in this prompt. The transcending effect of the dishonesty is that the company will not only lose clients in the long term, but the profitability will reduce due to the weak demand for the goods produced by the corporation (Roebuck 2012, p.224). The strategies for the aggressive sales are usually based on the target. The high marks brought forward to have the effect of predication of a significant amount of product to be manufactured to meet up with the planned target. If these objectives of sales are not met or are not forthcoming, the company is deemed to incur high holding costs which will eat into the profits of the enterprise. It is therefore quite imperative for the company to proceed with caution while carrying out the aggressive sales since it has not only the impact on the reputation of the company but also the profitability of the same.

Product quality risks and the criminal targeting the products.

In the designing of a product, there is need to test the product with the sole intention of understanding the effect that it has on both the health and the wellbeing of the customer. Poor design of the product gives a leeway to a risk of an adverse effect of the product to the consumer.  In this prospect, the company must ensure that the production a certain product not only comply with the rules and regulations stipulated by it also give much attention to the inception of a high level of intended effect on the final consumer (King, & Khan 2012, p.226).  Through a thorough research carried out about the product and how it affects the humanity, the company can institute a corrective measure in case of any discrepancy in the production of these goods. Criminals who target the products also pose a high risk to the company by producing the exact product that the corporation is building but may be faulty. This move makes the company be at risk of poor quality production which at the long end has the effect of jeopardizing both the long term profitability and the reputation of the firm (Steinberg 2011, p.320).


The risk identifiedActivities to deal with the riskPersons responsibleTimeline
Customer suitability assessment risks due to high risk productsCarrying out a research on the policy regulations on the production of the product as required by the law Proper study on the customer needs and preferences Analysis of the customer feedback about the experience on the high risk product. Provision of proper direction of use of the high risk productsThe production manager, The compliance officer The research and development manager  5 weeks
Risks on the recruitment process  Carrying out a proper job description and design Carrying out profound training on the new recruits for proper familiarity with the work they are doing Creation of policy manuals for the recruits as pertains to their areas of work for proper understanding of their boundaries as concerns work. Hiring qualified professional who have the skills and the attitude for the job description so far created. Carrying out the research on the various developments in the employment world in terms of the delivery of the of work schedules teaching the recruits on the sameHuman resource manager and their subordinates6 weeks and periodically for trainings
Risk due to the attitude and lack of skills of the managers in terms of risk managementOffer proper training to the various departmental managers on the need to mitigate risks by taking them through the various compliance manuals of the company as stipulated by the law and also the statutes of the company.Compliance officer5 weeks and periodically
Risks due to aggressive sales practices and negative aspects of the productSetting out competitive, relevant and attainable sales objectives and goals for the salespeople Providing training for the sales department to enhance profound product knowledge of the company Carrying out profound analysis on the various dynamism of the market as concerns the company products and helping the salespeople understand how best they can pitch the product in the market Carrying out a mystery shopper’s survey on the product to understand the customer experience and make an improvement on the same.  Carrying out a market analysis on the gap between the information on the adverts and the actual experience of the customers and carrying out a corrective measure as per the findingsManager sales and marketing department Sales persons Research and development team/ manager3 months and continually
Risks of the product being targeted by the criminalsCarrying out a research on the products already in the market to understand whether the products are original or not. Report any suspicion on the product to track down the criminals responsible for the manipulation of the products.Research and development manager/ team Compliance officer 


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King, N., & Khan, A. R. (2012). Governance, risk, and compliance handbook for Oracle applications written by industry experts with more than 30 years combined experience, this handbook covers all the major aspects of governance, risk, and compliance managent in your organization. Birmingham, UK, Packt Pub.

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