Risk Management Through BIM and BIM-Related Technologies
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Risk Management Through BIM and BIM-Related Technologies
Running Head: RESEARCH OUTLINE FOR DATA COLLECTION – Vodafone 1
RESEARCH OUTLINE FOR DATA COLLECTION – Vodafone 21
Research Paper
Sruthi Dhadvai
ITS 835 – Section (10)
Term: (Fall 2019)
University of the Cumberlands
Prof. George R. Mikulski
Table of Contents Introduction: 4 Vodafone’s Core Business and Strategies: 6 Vodafone International Strategy: 8 Risk on the Business Activities of Vodafone 8 Financial Risk: 8 Strategic Risk: 9 Operational Risk: 9 Hazard Risk: 9 Information Risk: 9 Traditional Risk Management: 10 Enterprise Risk Management: 12 Benefits and Limitation in ERM 15 Benefits: 15 Limitations: 16 Roles and Responsibilities of ERM 16 Risk Management Key Items: 17 Employment systems: 17 Prevention from Fraud: 18 Health and Safety policy: 18 Product and Process Management 18 Benchmarking: 18 Disaster Management: 18 Recommendation 19 Corporate Strategy 19 Marketing Strategy: 20 BoP Strategy in markets: 20 International Strategy: 21 Conclusion: 22 References: 23
In this case study, we are going to discuss an organization named Vodafone. In research, we required to identify the risk management of this company and have to provide some practical recommendations for the risk management Vodafone.
This case study uses to look at where the international Vodafone was in 2012, how the company in progress, the path through its development, growth, breakdown, and achievement. It takes an overview of the successes and challenges of Vodafone. Chief Executive Officers, Sir Gerald Whent, Arun Sarin and Vittorio Colao controlled and maintained the company’s divestments, investments, mergers, acquisitions, and other strategies.
The global strategy will be used in the relevant model, and these contain the CAGE framework of Ghemawat’s, The Parenting Fit Matrix, and the Life Cycle Stage, among others, and The Boston Consulting Group (BCG) matrix. This document will also discuss others like Industry Life Cycle. Vodafone surprised people in 2012 by the results of its annual, which determined the positive expansion in spite of competitors that have been competing from 2008 for the reason of the new CEO, named Vittorio Colao had fixed a strategic decision that changed from that of his antecedents. In terms of that, Colao had not made any pronouncement and announcement on Vodafone’s strategic view ever since considering the top job in this organization.
There is a total of three major areas that the new CEO of the Vodafone, Vittorio Colao, focused as the leading developer of performance. They are
- Cost reduction and enhanced customer services for the development of operational performance.
- For business and customers, growth opportunities are pursuance in the major areas of mobile data service, emerging market, and comprehensive business solution.
At the end of March in 2012, it suggests that the speculate for the CEO had paid off as financial results showed a noticeable enlargement in revenue flows of the company. The strategy of Vodafone in 2012, clearly define the changes and the shifting of policy by Vittorio Colao is the main argument and subject of this case study. The assignment objectives at this evaluating case study and offering some possible recommendations for the improvement of risk management of Vodafone.
The main objective of the assignment would be to discuss the risk management and recommendation of risks that Vodafone has used in terms of infiltration into emerging markets and how these succeed in increasing Vodafone’s commercial portfolio. The company can succeed in the long run if all parts of weakness will be figured out, and design recommendations of risk will be designed by following the core objectives of Vodafone’s strategy. To explain scenarios and related them with a real-life situation, some relevant models will be used. There are different types of the model, but some extraordinary models used in international trade contain the AAA triangle which determines for the following:
Arbitrage: developing distinctions by offshoring a few procedures to have economies of specialization and countries with cheap labor.
Adaptation: modifying procedures and providing to meet the local market’s requirements for boosting the market share.
Aggregation: Standardizing regional or global operations and spreading the cost in the various countries in the world helps to sustain the scale of economies.
Vodafone’s Core Business and Strategies
Corporate strategy is mostly implemented in the corporate center. The main objective of this organizational strategy is to provide value to shareholders. It is depended on the executive directors, CEO, and various specialist functions in the organization. In 2005, this company compromised total six, geographically determined business that submitted to the CEO. The contained Germany, United Kingdom, Italy, Middle East and Africa, Asia-Pacific, and another Europe. (Khan & Suhaib, 2019).
This commercial center assumes three significant roles: Administration of presented businesses, growth of new companies as well as act as a warden or agent for persons who have an investment in the businesses that are the shareholders. Vodafone set up two top organization committees to supervise the implementation of the strategy set by the mainboard. The administrative Committee would focus on financial structure, policy, and organizational structure. To attempt to expand new businesses, Vodafone moved importance to promising markets in Africa and Asia, such as Ghana, South Africa, and India, among others (Khan & Suhaib, 2019). The last primary function of the Corporate Centre is to act as a warden or agent for those who have funded the businesses that are the shareholders, Vodafone striped non-profiteering markets, and then enhanced prepared performance, pursuing growth opportunity and approaching speculation in a restricted manner.
To be an excellent instructor, the corporate center requires support in the accomplishment of above-average returns, by supervision well the businesses that make up the company, separating from those that cease to offer value while obtaining or rising activities that do. This was what made up the CEO’s reign of Vodafone from 2008 all the way through to 2012. He fed on the three functions of the Corporate Centre as piercing out by Davies in the middle of 1999 Management Quarterly. CEO of Vodafone removed the spotlight from international strategy to corporate strategy. His focus of importance was on recovering operational performance through enhanced customer service and cost reduction, following growth opportunities in three main areas as well as motivating shareholder returns. This price-cutting and asset trimming and portfolio alteration were intended to recuperate shareholder expansion. Achievement of this was seen in the 17% rise in shares during a time when European competitors in the same period were acquiring losses, and Telecom was downwards by 5%, Telephonic had turned down 34% and Telecom of France by 45% (Kresak, Corvington, & Williamson, 2016). The corporate center also accepted other activities such as external relations, trade with reporters, and supervision relationships with government and other firms, which are essential to the smooth functioning of the enterprise because they make available the rest of the businesses to center on serving clients.
The corporate parent or quite a center also has the significant functions of adding value through any one of three primary roles:
- Portfolio manager- that use to activated as an active investor.
- The synergy manager- the corporate parent, looking to improve value for business units by administration synergies across business units.
- Parental developer – looks to utilize its central potential to add value to its business — the closer linkages between businesses, the higher the opportunity for creating value from sharing resources and transferring capabilities.
Vodafone is a professional company, formulated the use of a strategic planning style that is likely to involve not only coordination to exploit the economies of scope and transferrable skills. Generally, the activities undertaken by the Corporate Centre can either add value or destroy it. Below are some of these activities that are more relevant to the case of Vodafone.
Vodafone International Strategy:
Effective global strategic management allows a company to fight effectively in the overseas market and is an inclusive framework for achieving a firm’s fundamental goals.
There are about six diverse international strategies, the international, global, multi-domestic, home duplication, elasticity, and home duplication strategy. Of these, the ones Vodafone could probably be using are: Home duplication strategy involve a company’s directly move their main spirited advantages from their home market to an overseas market by replicate the home market compensation that a company has in the overseas market that it wants to enter. The global approach is another probable strategy that Vodafone is using, sees the world as one market with the essential uniform customer worldwide intending to produce consistent products and services to attain a very high level of economies of scale (Panibratov, 2017). With the Global Strategy, there is usually a head office that directs the marketing and manufacture of the world market, thereby centralize corporation power and result making.
Risk on the Business Activities of Vodafone
Risk takes many complexions and fluctuations in the process of business. The impact of different types of risk on organization Vodafone is evaluated.
Financial Risk: Financial risk occurs as a result when a firm changes its interest rates and the foreign exchange rates. It affects the activities of the business process. When the central banks change the bank rates then banks change their interest rates on lending and also change the interest rates of the loan which the already given. Thus, if there is an increase in the interest rates which further can increase the financial cost to Vodafone Company if there is any loan is taken by the company from the bank (Wei, 2019).
This increase in the financial cost decreases the net actual income of the company.
Strategic Risk: This industry is operating with a competitive market environment and this increases the strategic risk to the firm like Vodafone to maintain and develop in the business. The competition in the telecommunication industry is downing the consumer market share and also the sales revenue of Vodafone company which changing the performance of the process of the business of Vodafone.
Operational Risk: Operational risk has a negative impact on the consumer’s mind and the product or service is not granted according to their demands and requirements. The consumers of the telecommunication industry become dissatisfied when they don’t get a proper network from the service provider. Vodafone believes that providing high-quality network service to the users and which have no operational risk (Ang, 2016).
Hazard Risk: Hazard risk boot-out the Vodafone from the competitive market when the company can’t bear the losses after the incident of some significant natural calamity or other disasters. It comes with huge economic and non-financial losses to the company.
Information Risk: As a telecommunication company, Vodafone holds large data and information related to its consumers, clients, suppliers and also the blueprint of some new services and other confidential records. But when this data would be stealing or hacked then it creates a severe loss for the Vodafone (Ang, 2016).
Traditional risk management is an approach to risk that is managed by various responsible management. According to the structure of risk management, the risk is managed in each unit of business, adapted with each strategy, profitability level, and prices, products, and relationship with the management. It focuses on pure risk and refers to an individual’s risk as if they don’t interact (Zou, Kiviniemi, & Jones, 2017). As the focus is on real risk, management highlights the description and management method of insurable natural hazards and has five ingredients that are the classification of risk, analysis of risk, risk control, risk financing, and management of risk (Zou, Kiviniemi, & Jones, 2017). In the identification of risk, the risk is classified, identified, and measured. An analysis of risk, the risk is managed through qualitative assessment and quantitative assessment in which the qualitative assessment risk is managed through the classification exposures, and in quantitative assessment risk, the information is based on the accounts receivables, contractual and deductions transfers, exposure of third parties and personnel, and measurement of cost risk. Traditional risk doesn’t approach with the company requirement of risk management and according to which risk should be treated as a whole, and therefore results are satisfactory due to increased independence of different types of risks to be managed. Such risks cannot be segmented and managed by individual departments, this being the reason, why a fragmented approach to risk does not fit within the aggregated approach to risk throughout the company.
It is regarded as the decision-making process, and the risk is made based on the principle of management that is identifying, examining, selecting, implementing, and monitoring. With these five steps, the risk of the organization can be managed. Suppose, Vodafone wants to increase or start working on any new project, then the organization first establishes the plan, then for implementing, the plan the employees are selected, and based on the skill the task is divided. After the division of task, the explanation about the completion of the task, with the help of the plan, illustrated and finally, it is monitored by the leaders of the team. Vodafone is one of the companies that are committed to providing world-class security.
Before framing any strategies related to the growth and survival of the organization, the primary part of a business organization is risk management. Risk management aims to recognize the uncertainty for future and assessment related to risk management, which can affect the activities of the organization at several extents. Based on these assessments, the priorities of enterprise in business are identified. The fundamental idea behind the risk is to recognize and reduce the unforeseen impacts, which can be a negative impact on the activities of the organization.
Risk is one that arises due to the uncertainty of financial markets, threats from society or trade union, the threat from the failure of the project, legal liabilities, loan repayment, and other natural causes. Efficient risk management is possible when the organizations assessed accurately the business internal and external environment that comprises of managers, employees, workers, competitor’s strategy, law and order, organization policies, trade unions, condition of global economic, technological change, the natural activity of environment, and societal issues (Zou, Kiviniemi, & Jones, 2017). In this way, the risk of any enterprise such as Vodafone illustrated.
The management of risk plays an essential role in the function of business as well as in making strategic planning, marketing, quality management, appropriate accounting, and legal work, health, and safety of an organization. The strategic planning helps the organization in focusing its all the energy in the functional department energy towards the objective of the company. In this way, all the factors related to functions illustrated for the enterprises.
The ERM or enterprise risk management is the part of managing risk or challenges based on business strategy that tries to identify, evaluate and make a solution for any type of danger, hazard, and disaster. Enterprise risk management can be physical and figurative. It looks after the operation and goals or purposes of one organization or company (Olson & Wu, 2015). Only managing the risk is not enough, so the discipline of enterprise risk management is not responsible just to identify the risk but to face the risk or manage the problems or challenges well.
The ERM or enterprise risks can be different types and deal with the industries of construction, finance, and consumer reporting based. That type of management method can define each circumstance or condition. The main responsibilities of that risk management are to be accessing the operation, the degree of force, preparing or planning the acknowledgment strategy (Olson & Wu, 2015). The process also included addressing risks and events by monitoring. Through that enterprise risk management, one company can protect and make the content for stakeholders, employees, and regulations.
One company can have different types of risks like making business insurance for damaging by fire or for loss and any type of natural disaster and theft. The other key element of ERM is to obstacle the problems of the technology that related to one particular company and managing the failures of technology. It also looks after the cost and financial problems.
Today businesses face different types of obstacles and possible dangers. How to manage the problem or challenges through easy steps and processes also deal with the ERM. That part of the management process also includes the human sources administration, legal part, financial and operational systems. Project administrators and other specialists who are connected with the ERM process of risk management evaluating the opportunities that can be related to their businesses or industries, making proper decisions of handling the problem and making an account and outline on various disasters and its potential responses in the time of emerging risks or disaster. The ERM team plans together how to mitigate the danger when one accident will happen.
Some risk that related to the ERM is the operational risk, financial risk, hazard risk and as well as human risk. The operational risks deal with client satisfaction, Stock failure, Sincerity, Reputational hazard, internal damages and Data consumption. The financial risks deal with the Pricing hazard, Asset danger, Currency problem, and as well as reputational risk. The technical risk can be the problems of technology that one company can face in the time of implementation. The hazard risk can be the damages of property through fire, theft and any disaster and accountability also.
That risk management can help Vodafone to bear the losses or for the not unbearable loses it can help to boot-out. Hazard risk mainly deals with the property damage that can be handled with the hazard risk management process.
The financial risk occurs because of the change in the interest charges and for the exchange charges. It can affect industrial activities. When the bank increases the interest charges and the charge of the loan then it creates a problem for one company. Vodafone already is in pressure for increasing loan charges. The strategy sometimes does not work. Some businesses have different tastes or extra susceptible in the case of pricing. A company’s production constantly more common in one nation than another nation (Kerr & Moloney, 2018). When a company accounts incorrectly it experienced a difficult fortune.
The operational risk defined the chances of an industry and point out the risks that one company can face. The business activities, methods, and practices are in the operational risk part (Kerr & Moloney, 2018). It also includes human mistakes and failure due to different types of actions and decisions. That risk has a contradictory impact that can affect the customer’s mind in the time of product service.
When the product services are hampered then it can be the cause of negativity. The network of Vodafone never experiences any type of network problem so the customers of Vodafone do not have a negative impact. Where other telecommunications are not successful for running a hazard-free network Vodafone is the best.
The technical risk can depend on the design or the entire base system. One can consider that type of risk occurs in the time of implementation. Vodafone has the managing group that looks after the business continuity arrangements and individual supplier collapse.
Benefits and Limitation in ERM
- The enterprise risk organization helps to allow one organization to gather a clear image of all the risks.
- It can improve risk management and well understand the risk.
- It can improve the resources or capital of the deployment.
- It also helps to follow the hazard appetite and make a strong strategy.
- It uses more efficient resources.
- Improve the administrative and evaluate the agency, and the shareholder’s opinion
- It enhances the internal power and also elevates the risk awareness.
- The process promotes transparency
The weakness of that risk management system in the industry is,
- Loss of structure or framework: ERM cannot find out all the parts but its goal to support and address all the risks.
- Reactiveness: There is no recognizable method for classifying any risks before the problem occur.
- Cannot assume the value of mitigation: The process can assume the risk but cannot calculate the mitigation cost which causes a big problem.
Roles and Responsibilities of ERM
Roles and responsibilities must be precisely described and known throughout the industry.
Board of leaders – They have final responsibility for all opportunities or risks. Risk management systems must be reviewed regularly and risk control mentioned plans must be examined and certified.
Superior administration – plan, execute, and manage an efficient Core work and framework. State policies and ideas, build and control the danger appetite, and report annually to the council of leaders. Develop a risk-aware experience.
Business systems – identify, evaluate, measure, director, administration, and record risks to senior executives. Manage associated risks within the structure installed by senior administration. Assure the agreement with systems and methods also the duty of it.
Maintenance purposes- present assistance to business units in the process of developing and implementing systems and methods.
Regional Review and Compliance – director, monitor and provide objective support of the effectiveness of the Structure.
Risk control – adjust the establishment of the Structure and implement the risk management process expertise.
Management of risk can be done by using good methods and procedures in the company associated with work practices, fraud prevention, policy related to health and safety, assurance of tangible assets and continuity of business, management of method and product and disaster management (Brustbauer, 2016). The different risk management strategies that can be used in Vodafone are-
Employment systems: Vodafone management can use conventional employment practices like remuneration policy, and recognition policy, wages policy, promotion policy which can help the company to eliminate the risk related to large employee turnover.
Prevention from Fraud: Vodafone controls and even eradicate fraud by selecting strong fraud policy and code of conduct. Fraud also eliminated by training regularly on awareness of fraud in the company. A 360-degree evaluation of employees also eliminate fraud in the company. Putting the right number of CCTV cameras in different departments helps to eliminate fraud in the company (Brustbauer, 2016).
Health and Safety policy: Health and Safety at Work Act also followed by the company in order to assure care which is adopted for the health and safety of workers at the workplace. The company also make some health and safety policy to eliminate the accidents at the workplace. Protection of physical assets and continuity of business – Vodafone makes some sound policies to protect the physical assets of the company (Brustbauer, 2016). This can help to reduce losses related to machinery or tools. For this, the company requires some regular training to the workers about the operating process of the equipment with safety and security.
Product and Process Management: The policy related to process and product management will also help Vodafone significantly in the management of operational risk related to product failure (Brustbauer, 2016). The policy will help the company to identify the loopholes and to overcome the recognized problems.
Benchmarking: Benchmarking deals with setting the standards for finishing some tasks by setting the benchmark the company can get help in doing an assessment or can compare the standard that is achieved by the department.
Disaster Management: The business company must have disaster management policies to react effectively in an emergency situation. A disaster management strategy assigned with some roles and responsibilities and developing a team quick task force in the organization to meet immediate requirements (Brustbauer, 2016).
The recommendation is one through which the suggestions or proposal is made for getting the appropriate action of the plan in the enterprise and project, but the representative of the organization represents the plan with the help of leaders in the group. The recommendation can be based on different factors like corporate, international, and several factors like this.
It is one of the strategies which is concerned with the firm competes that is the scope of its actions towards the work and plan. The dimensions of the scope are the geographical, vertical, product, new ventures, and acquisitions. Meeting and fulfilling the requirement of customers in the national market and responding to the customer and stakeholders softly to local circumstances, and it requires greater decentralization in the market. The cost and benefits of critical mass for centralizing the research, and development of new development of the project, but innovation is one that occurs in multiple places in the multinational companies, and the other company needs to creative and initiative throughout the project (Rodrigues, 2019). Vodafone is one of the companies that consider the subsidiary’s use to adapt to the distinctive features of the market. The Corporate center should have been more careful in their research this would have encouraged the organization to withdraw a lot of financial losses due to malfunctions in some of the countries they examined to begin. They should have taken into evidence the return on investment, if the money they lost in Japan, France, and China other countries could have been guided to developing businesses, they may have got much better financial results.
The company recommends managing the risk in a management process and they must be responsible about the process of management and overseeing the process to identify the risks of the company. After that also monitoring the risks and try to solve the issues of the company with the responsibility (Essays, 2018). Though the management will be dependent on the framework. The framework includes the duties of the board and the directors to maintain the boards. Committees to solve the risks related to different risks.
The recommendations for boards and developing their responsibilities when dealing with the risks and provide some strategies to deal with the risks. Risk intelligence is used check how the company deals with the risks and the transparency of the different levels of the company.
There are some areas to improve and strategies to implement to increase revenue improve their brand and public image and launch and make their own-brand handsets to their competition. From the analysis Vodafone is technologically forward in terms of the services they provide, lack innovation in handset manufacturing. By implementing the recommendation, promote hand-sets and become more competitive overall. Risk holds a perspective that has a dual perspective positive and negative. It is difficult to see any industry not facing any risk. Risk is included in all aspects of organizational activities and the cause of this risk is unavoidable in nature. But it can be minimized to a level to reduce the losses and this can be done with the help of a proper risk management process (Essays, 2018). The process includes the identification and assessment of risk. Risk management is executed in the business by analyzing various factors and operators that affect businesses with the management strategies for risk management.
It is one kind of strategy which is obtained at the international level. They can make use of arbitrage strategies by exploiting wage differentials offshoring production to low wage locations and exploiting distinctive knowledge available in different locations (Essays, 2018). MNCs can make use of cross-subsidization of competitive initiatives using profits from other markets which involves predatory pricing by using profits from cash cows to finance their stars. In the international strategy, there is a need to use some of the tactics such as
Need for national differentiation: it is normally challenging to satisfy the needs of the “global customer”, as inclinations such as culture, religion, politics among other issues, agree to specifications next to impossible.
Need for changes in the marketing strategy which caters to consumers in the target market. Globalization allows a company to reach more customers. And several more like this.
Vodafone should really have taken their time in making these acquisitions and mergers; also they should have done the due diligence to use the correct mode of entry into markets. Also, they should not have put so much effort into penetrating mature markets, but rather growing markets as this are less stringent and they would get first-mover advantage (Rodrigues, 2019). Vodafone should in a sense have been more risk-averse, the speed with which they increased their global footprint showed that they were not scared to take risks, but this shows a lack of due diligence.
From the article, it found that the matter deals with the extent management of uncertainty or risk which is an important and essential part of an industry. The research paper presents each factor of risk which included the assessment process and explained the management factors of Vodafone company activities. The two types of risk management systems of Vodafone explained well with the proper benefits and limitations. That also identifying the risks and future possibilities. There are different working operations of the company which represents all the risks like reputation risk, and financial theft.
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Risk Management
Employment systems
Fraud Prevention
Health and Safety policy
Product and Process Management
Benchmarking
Disaster Management
Recommendation
BoP Strategy in emerging markets
Corporate Strategy
International Strategy
Marketing Strategy
Strategic Risk
Operational Risk
Hazard Risk
Information Risk
Types of Risk