Category: Management

Stress is a frequent phenomenon, not only in life but also at work. The sheer number of cases and tasks, plans and reports, associated problems, and turmoil are a part of the array of stress factors that can affect employees, and it cannot help but be worrying. At the same time, not only ordinary people who want to work and avoid stressful situations are concerned about this issue but also many executives, HR managers, and other professionals around the world. For this reason, the concept of stress management, which goes side by side with the problem of coping with stress in the workplace, is now becoming more common.

When stressed, it can be challenging to concentrate, shift, and distribute attention, and even a general inhibition or complete disorganization of activities can occur. However, skills and habits remain unchanged and may replace conscious action. Under stress, perceptual and memory errors and inadequate reactions to unexpected stimuli may occur. In some people, minor stress can cause a surge of energy, increased activity, particular clarity and clarity of thought, and scenic emotions. However, prolonged stress is always a negative factor that negatively affects a persons productivity. This is why stress management is essential in businesses that want to maintain the quality performance of their employees.

The process of stress management takes place along three primary lines: preventing stressors, reducing stress from stressors that cannot be eliminated, and organizing a system to cope with the effects of stressors. Managing stress at the organizational level involves changing the organizational climate and providing anti-stress support to employees through specific programs. Understanding the adverse effects of stress is of particular importance at this level, as it is the only way for managers to monitor stress and develop measures to prevent the effects of stressors.

Creating a favorable organizational climate is one of the essential tasks of effective stress management in an organization, as it is perhaps the best stress prevention in general. Based on this fact, the leadership of many organizations today is taking all measures to create an atmosphere of trust and respect for one another within their teams. In order to achieve this, such methods as a feedback system via corporate communications are customary. In addition, team and project forms of work organization are used.

Another stress management factor at the organizational level is to give staff more responsibility for their performance. However, this factor will only work in conjunction with a clear division of function and workload to prevent under- and overwork. If employees decide for themselves what and how they do their work, the adverse effects of stress will be considerably reduced (Holman et al., 2018). Another great way to prevent stress in the workplace is to introduce flexible working hours. Minimizing stress and increasing job satisfaction can be achieved by allowing at least some employees to arrange their own schedules based on production needs and job functions. In addition, social support for employees provided by supervisors and cohesive teams is a significant organizational factor that can alleviate stress at work. Many researchers believe that they act as a buffer between people and stress (Holman et al., 2018). With the right approach, a favorable climate can be an effective measure for the prevention and mitigation of stressors and a way to relaxation and recovery.

Reference

Holman, D., Johnson, S., & OConnor, E. (2018). Stress management interventions: Improving subjective psychological well-being in the workplace. In E. Diener, S. Oishi, & L. Tay (Eds.), Handbook of well-being (pp. 153-221). DEF Publishers.

Introduction

There is no use denying the fact that the modern age could be characterized by the blistering development of society and a great number of various issues connected with it. Thus, one can admit the fact that this development to a greater degree became possible due to the evolution of the critical thought and science which made human beings think about their life and reconsider it. With this in mind, it is possible to say that the current level of science, achieved by humanity, changes a great number of various aspects of human activity, introducing some new traits and implementing new methods, which could help to achieve better results.

Moreover, new and unconventional approaches towards some traditional spheres are also outlined. Under these conditions, it is possible to say that the alternative perspectives of management could be taken as the development of human thought in this sphere as they reflect the current situation and its peculiarities. That is why, the detailed analysis of the given theory is needed in order to understand its main peculiarities and determine whether it could be of great relevance for practice.

First of all, it should be said that the chosen theory becomes more and more popular and obtains a great number of admirers. It should also be said that the analyzed approach to management draws on the main ideas of Critical Theory. That is why, it is important to analyze the basic concepts of the alternative approaches of management in terms of Critical Theory. The theory tries to introduce some criticism, based on the main social sciences and humanities, of society and culture. Thus, according to this theory, the traditional approach towards management is taken as the outdated and inefficient because of its inability to take into account the main peculiarities of the modern market and conditions, under which people function.

Besides, the traditional approach also does not give much attention to the conditions under which people function, preferring to take into account various factors that could help to improve the final result of the company or organization. For this reason, it is possible to say that the alternative approach has a great relevance to practice as it is centered around the factors, not taken into account by the outdated traditional approach.

Thus, to provide a clear evidence for this statement, the given paper will analyze the human aspect in terms of such important concepts as Human Resource Management, Culture, Consulting and Leadership.

HRM

Nevertheless, cogitating about the advantages of the alternative perspectives of management in terms of HRM, it is vital to mention the fact that the functioning of every organization or company depends on the level of performance of every worker greatly (Alvesson & Kärreman 2007). With this in mind, it becomes obvious that the atmosphere and conditions are vital for the collective as these two factors could increase the level of workers performance which, in its turn, could help to achieve better results. That is why, the fact that HRM centers around workers and conditions under which they function, could be taken as quite obvious. Additionally, it is possible to say that according to the latest researches, companies which adhere to the main principles of HRM, show better results and obtain greater incomes (Alvesson & Kärreman 2007). This fact could be taken as the evidence of the great perspectives of the alternative approach of management and the beneficial effect promoted by it on the whole sphere.

Culture

Ybema and Byun (2009) underline the fact that the cultural aspect of the functioning of every company could not be ignored anymore as it has the great impact on the whole company. Providing the case study connected with the Japanese-Dutch work relations, they tend to show the fact that people are affected by the peculiarities of culture and that the knowledge of these peculiarities could help to increase the general efficiency of a company (Ybema & Byun 2009).

That is why, resting on these assumptions, it is possible to outline the fact that the emphasize on the cultural aspect of human relations, made by the alternative perspectives of management, could have the great effect on the company. Moreover, as against the traditional approach, it provides various ways how to achieve the needed balance and use the culture of workers. Analyzing the case study provided by Ybema and Byun (2009), it is possible to outline the fact that Japanese-Dutch relations are predetermined by the culture of people involved in them as Japanese firms in the Netherlands and Dutch firms in Japan have various levels of performance and efficiency.

Consulting

Pemer and Werr (2013) underline the fact that the issue of consulting could be taken as the indicator of the state of a company and its successes. In other words, they tend to show that all consultants have various motivation which, in its turn, depends on the functioning of a company. Criticizing the traditional approach towards the issue of consulting, Pemer and Werr (2013) also state the fact that the alternative one manages to take into account the main needs of consultants and make them work with the high level of the efficiency. The fact is that they are not just people who provide the needed information about the products and goods manufactured by the company. However, they help to promote the company and increase its results and incomes. That is why, the approach towards them should be very detailed and well thought. With this in mind, it is possible to say that the critical theory tends to show the difference in approaches and underline the necessity of change.

Leadership

Finally, it is also possible to discuss the aspect of leadership because of its great importance and impact which it has on the functioning of the company. Manz, Anand, Joshi and Manz (2008) underline the fact that the concept of leadership should be taken as an integral part of the functioning of every state. Their investigation underlines the failure of the traditional approach towards management, outlining the fact that the alternative perspective helps to develop the given trait among workers which could lead to the significant improvement of the functioning of a company and result in the decrease of the level of corruption.

Conclusion

With this in mind, resting on these facts, it is possible to make a certain conclusion. It should be said that the alternative perspectives of management could be taken as an integral part of the modern world as they provide a great number of various remedies and methods which could help to increase the level of performance of a company and obtain better results. Under these conditions, it is possible to conclude that the alternative perspectives of management, which largely draws on Critical Theory, are of great relevance for practice and should be implemented in the functioning of various companies.

References

Alvesson, M & Kärreman, D 2007, Unraveling HRM: Identity, Ceremony, and Control in a Management Consulting Firm, Organization Science, vol. 18, no. 4, pp. 711-723.

Manz, C, Anand, V, Joshi, M & Manz, K 2008,  Emerging paradoxes in executive leadership: A theoretical interpretation of the tensions between corruption and virtuous values, The Leadership Quarterly, vol. 19. pp. 385392.

Pemer, F & Werr, A 2013, The Uncertain Management Consulting Services Client, International Studies of Management and Organization, vol. 43, no. 3, pp. 22-40.

Ybema, S & Byun, H 2009,  Cultivating Cultural Differences in Asymmetric Power Relations, International Journal of Cross Cultural Management, vol. 9, no. 3, pp. 339358

Advice to Goldstein

Being the assistant vice president at Reliable Insurance, Amy Goldstein expects to take over the position of vice president from his retiring supervisor. However, this does not happen when the vice president explains the commitments that come with the position. Goldstein is aware that she cannot manage to work for long hours, take care of her bedridden mother, and attend various business trips.

The employee that was promoted was instead of Goldstein was her subordinate. Goldstein should be content with her current position knowing she was qualified to be the next vice president. Goldstein should consider her mothers condition and take it as part of her responsibility to take good care of her mother. The responsibility that comes with the promotion is great and may drain her energy leaving her with less time and energy to care for her ailing mother.

Sexual Harassment Lawsuit

Lewis and Hopkins accounting firms junior accountant, Jennifer Albright, has resigned from her job. The resignation comes after she has endured sexual advances from Milton Lewis. Milton is a senior partner in the firm who has made sexual advances and harassed Jennifer for six months without her filing a complaint.

Jennifers resignation and filing the case indicates the psychological stress she has endured for the past six months. Sexual harassment creates a hostile work environment for employees, which may be intimidating especially if the sexual advances come from senior employees. According to the 1991 Civil Rights Act, sexual harassment includes unasked for sexual advances or demands for sexual favors and contact, chitchat, or the dissemination of material with distasteful sexual themes. The wronged employee ought to be compensated, and the offender should be punished. Jennifers chances of winning the suit are low because Milton is related to the senior partner whose position may influence the outcomes of the case to protect the companys reputation.

South Hill High for Girls

Theresa Thomass rating declined after she became pregnant because she had difficulties discharging her duties. However, her dismissal was unfair because it was pegged to her poor performance during pregnancy. I would advise Theresa to fight for her rights and sue the school for unfair dismissal. The constitution protects women against discrimination. In addition, the Pregnancy Discrimination Act, which was an amendment to Title VII of the 1964 Civil Rights Act, protects against discrimination. The act stipulates that pregnant women are to receive treatment and consideration that is similar to that of any other employee in a firm. The amendment has shifted employers attitudes to consider the plight of mothers with small children.

Milton and Madden (M & M) Law Firm

Milton & Madden law firm is opposed to the wearing of turbans by its Sikh employees because of concern that the companys clients may perceive the attire as unprofessional. The U. S. constitution promotes the freedom of association and gives people the freedom of worship without government involvement. However, the constitution indicates that employment is an economic venture and not a social undertaking. Therefore, these freedoms do not hold in the workplace. The two Sikhs should abide by their employers dress code.

Bayou Oil Drilling

The discrimination of people based on color or origin is illegal and punishable by the law. Mexican workers suffer from racial discrimination and harassment by being called offensive names by their colleagues. The Mexicans ought to sue the company for allowing its workers to discriminate and belittle them. According to the Civil Rights Act of 1991, amendment juries are composed of workers who are sympathetic to the plight of their fellow workers. Compensatory damages as illustrated by the statute include emotive pain and suffering, psychological torment, loss of enjoyment of life, inconvenience, and other non-pecuniary losses. Individuals suffering from such damages can sue the company, which should be compelled to punish the wrongdoers.

Crystal Advertising Agency

The alteration of the firms sick rules from a certain number of days to the frequency of incidents aims to assist in evaluating the reviewed cases. Rogers tries to launch a complaint against the new policy because younger employees are not taken ill as often as the older ones. The plan to have more workers from a particular age group is unethical and unfair. The enactment of the Age Discrimination in Employment Act of 1967 aimed to promote the employment of individuals over the age of 40 since age discrimination is regularly experienced by individuals above the age of 40. Employers should avoid the discrimination of old employees during the recruitment and dismissal processes. An employee can sue an employer in instances of age discrimination during job promotions, rewards, and compensation. The hiring of young employees because they fall sick less often is also unlawful. Rogers should ensure that he does not use age to discriminate against employees because the constitution allows for people to be in employment up to the age of 65 in some instances.

Rita Hall V Bull & Bear firm

Ritas kidney failure is a form of disability. The constitution restrains employers from using disabilities to discriminate against their employees. The 1990 Americans with Disabilities Act outlines the protection of individuals with impairments or disabilities from discrimination. It stipulates that employers should be accommodating of individuals with disabilities by making the work premises accessible, modifying work equipment, and changing work schedules. Rita has a right to alter her work schedule to allow her to obtain medical attention. In addition, she is willing to work extra hours to make up for the time lost during her treatment. Therefore, she can use legal means to settle the issue if the firm fails to honor her request.

Neptune Fish Market

The firm employs a group of employees who are permanent dwellers of the area to clean and refurbish the open market. Each laborer receives a constant wage that amounts to $1,000. The laborers are required to be on duty for a total of nine hours daily. In addition, they are supposed to report to work five days a week. The 1938 congress enacted the Fair Labour Standards Act with the aim of regulating the maximum number of hours a worker can work in a day before earning overtime dues. The overtime compensation rate is one and a half times the normal rate of pay. In July 2009, the hourly minimum wage was set at $ 7.25 while the maximum working hours per day were set to eight. Neptune Fish Market underpays its workers as its hourly wages are lower than the established minimum rates. Therefore, the company should increase its rates to pay the legally recommended wage rates.

Typing Pool Complaints

Employees are at liberty to work in a healthy and safe environment. The enactment of the Occupational Safety and Health Act of 1970 stipulates that the health and safety of employees at their work premises should not be at stake. There are various health and security risks in most work premises. Consequently, the education and sensitization of the imminent danger of such hazards are mandatory. The rule aims at reducing losses incurred by employees and employers in treating injured employees. Employers lose productive labor in the case of injuries while the employee suffers from physical discomfort. The statute plays an important role in ensuring that workers have training on various aspects relating to the health and safety hazards in their immediate work environment.

The complaints from the staff are valid because the use of poor quality equipment is detrimental to their health as well as to the profitability of the organization. The costs of treating health and safety-induced complications are higher than the costs of purchasing the appropriate equipment.

Marissa Campbell versus Venus Cosmetics

Marissa hurt her back while working for the firm. The rumor that she overstated her back injury has reached her employer. In addition, Marissa was seen playing tennis with her husband when she was supposed to be recuperating. Marissa was the companys agent. Therefore, she was expected to be accountable and honest. It was wrong for Marissa to provide false information in order to be off duty. She failed to be loyal and accountable to her employer when she exaggerated her back injury and continued to receive payment by pretending to be unwell. Venus Cosmetics should give Marissa a warning letter and deduct the money that she received unlawfully from her salary.

Introduction

Quality is one of the priorities modern businesses concentrate on, trying to improve customer satisfaction and reduce costs at the same time. Total quality management (TQM) has been a framework for achieving this goal for decades, but new paradigms emerge and become widely utilized. The Six Sigma approach is one of the comparatively new models that was introduced in the 1980s and earned considerable popularity in the business world.¹ It is noteworthy that the two frameworks are very similar but still bear some differences when it comes to core aspects. Due to these similarities, in some cultural contexts, TQM is regarded as a philosophy, while Six Sigma is seen as a methodology to implement TQM.² Based on a brief analysis of TQM and Six Sigma, it is possible to assume that the latter will soon become the major quality management strategy.

Core Concepts and Values

As mentioned above, both paradigms are concerned with quality improvement. However, the focus is rather on different aspects as TQM aims at improving processes leading to the establishment of specific standards and ensuring strict compliance.³ Managers concentrate on ensuring a specific level of quality related to a particular process or unit. The Six Sigma model is more specific as it targets defect detection and elimination (or dramatic minimization). The objective of this approach is to ensure no more than 3.14 defects on one million events or units.⁴ This quality management tool is regarded as statistics-based and more concrete compared to TQM.

As far as the values placed to the fore within the two approaches, similarities can be found in such areas as the focus on customer needs and cost reduction. Other domains that share a lot in common include leadership, employee engagement, and continuous learning. The use of both models is associated with the engagement of each employee and the lasting training and development.⁴ At the same time, the implementation of Six Sigma encompasses the same instruments, but more training is needed. The paradigm is supported by quite specific training courses that equip managers with specific skills needed to implement the model. TQM can be carried out with no specific training as no particular skills (statistical analysis skills, for instance) are needed.^{3, 4} Six Sigma model is also characterized by the use of statistical tools and clear quantifiable and measurable goals. This precision is not typical of TQM that is linked to principles and standards rather than numbers and figures.⁵ Hence, it is clear that the differences between the two quality management approaches are not numerous, but they are rather fundamental.

Methods

The methodologies utilized in terms of the two frameworks are similar as well but have several basic differences. When it comes to TQM, both quantitative and qualitative data are utilized, but the focus is on qualitative information.² Managers try to identify the major areas of concern and develop standards that can ensure the highest quality in this specific domain. As mentioned above, the Six Sigma paradigm is characterized by the focus on statistical data and the development of clear steps to achieve particular measurable goals.

The cycles of the two models implementation are also different in certain details. TQM is associated with four stages that include establishing, doing, exploring, and acting.⁴ Managers identify issues and develop a policy that is further implemented and analyzed. Effective policies become a part of the existing standards that serve as the background of quality management. The developed policies and standards are often reviewed and explored on a regular basis to ensure their effectiveness and up-to-datedness.

The Six Sigma cycle contains five stages that may seem similar to the ones mentioned above but are characterized by important peculiarities. The five phases include defining, measuring, analyzing, improving, and controlling.⁴ Managers detect the defects to be eliminated or minimized at the first stage, and the measurement of initial performance takes place. After that, each component of the associated process is analyzed meticulously to identify the causes of the problem. When the cause of the error is identified, the ways to improve performance are developed. The final stage implies the creation of specific controls to ensure that the process is effective and the necessary measures and tools are employed.

Future Prospects of the Two Models

As seen from the conducted analysis, Six Sigma is more focused and measurable, which is now seen as an important or even critical feature. Nowadays, quality managers and executives are willing to receive quantifiable data to analyze and use to improve diverse processes and operations.^{3, 5} This trend suggests that Six Sigma can become a prevalent quality management tool in the near future. However, this model has certain limitations when used cross-culturally.⁶ The COVID pandemic unveiled the value of proper data management and reporting. Due to different statistical instruments and cultures, the Six Sigma approach can be less effective as the basis of the paradigm (data) can lack reliability and validity. Therefore, TQM may be more applicable in a cross-cultural context, at least, until the Six Sigma framework is further developed.

Conclusion

In conclusion, it is necessary to note that the Six Sigma approach is likely to become the most widely used quality management framework due to its precision and a clear focus on measurable outcomes. This paradigm is instrumental in achieving the highest standards that are based on the analysis of operations and defects. At that, this model still needs further refinement, which is specifically evident in cross-cultural settings.

References

Lamine K, Lakhal L. Impact of TQM/Six Sigma practices on companys performance: Tunisian context. International Journal of Quality & Reliability Management. 2018;35(9):1881-1906.

Li N, Laux C, Antony J. Designing for Six Sigma in a private organization in China under TQM implementation: A case study. Quality Engineering. 2018;30(3):405-418.

Sreedharan VR, Sunder MV, Raju R. Critical success factors of TQM, Six Sigma, Lean and Lean Six Sigma. Benchmarking: An International Journal. 2018;25(9):3479-3504.

Saxena MM, Rao, KVNS. TQM, Six Sigma and Lean. International Journal of Applied Engineering Research. 2019;14(15):3442-3447.

Silva DC, Dantas MLR, Godeiro DPO. Organizational culture and quality practices TQM / Six Sigma: A study in manipulation pharmacies. Revista Produção e Desenvolvimento. 2019;5(1). Web.

Salentijn W, Antony J, Douglas J. Six Sigma to distinguish patterns in COVID-19 approaches. The TQM Journal. 2021;ahead-of-print(ahead-of-print).

Introduction

It is hard to disagree that the success of any company partly depends on its vendors. Their critical importance is that they ensure the ability of the organization to achieve profit goals and revenue and drive new growth within the particular industry. Therefore, vendors are at the heart of an extended number of the companys activities and processes, so it is crucial to manage and improve the relationships with them. Since an organization may have over a hundred various vendors, this process of controlling them may become rather complex and challenging. It may even appear that the company is losing money on several hidden costs or overpaying for services and goods, that is why proper vendor management is crucial. Vendor management is a unique process of sourcing and researching suppliers, paying them, evaluating their performance, managing vendor relationships, negotiating contracts, and obtaining quotes. Paying proper attention to these essential steps can help the company save both its reputation and significant amounts of money.

Overview of Vendor Breaches

Data Breaches

There are several types of vendor breaches that may occur while a company works with suppliers. One such problem is identified as a data breach and refers to a confirmed incident, in which sensitive, confidential, or especially protected data has been accessed and/or disclosed to unauthorized third parties (Kallberg, 2019, para. 2). The exposures of data may include certain important information like trade secrets, intellectual property, and any other personal data (Davidoff, 2019). Since third-party vendors are the companys trusted partners, the collaboration with them may create an increased risk of exposure to a potentially serious data breach (Kallberg, 2019, para. 2). Therefore, working with suppliers requires any company to follow certain rules and make sure that the necessary safety steps are completed properly and in a timely manner.

Minor Vendor Breaches

As for minor vendor breaches, they refer to those problems that were caused by either partys failure to fulfill a certain part of its obligation. It may happen even though the deliverable of the contract itself was eventually received by the other party (Kallberg, 2019). In cases like this, a legal remedy can only be pursued if the party that suffered the breach is able to prove that the result of the breach was the financial loss (Kallberg, 2019). For example, a late delivery will not remedy if the delay did not result in economic consequences.

Statistics

In the current world of businesses, an extended number of companies and organizations are using third-party vendors more than ever before. Hence, it is evident that there is a higher level of access to internal systems with sensitive information and private data available to these sellers. Researchers note that the 2018 Ponemon statistics show that at least 56% percent of organizations have experienced a data breach due to a vendors security shortcomings (Kallberg, 2019). Unfortunately, vendor breaches, even those that seem insignificant, are able to damage the business and its performance. Moreover, a survey across various industries found that the number of cybersecurity incidents related to third parties is increasing, which is demonstrated in Figure 1 (Kallberg, 2019).

• Cybersecurity incidents involving vendors is increasing
• Cybersecurity incidents involving vendors is difficult to manage

Seminal Vendor Breaches

As for especially severe vendor breaches, they typically cause significant damage to either party, and their consequences can affect the company to such an extent that it may have to stop its activity. Seminal vendor breaches include those challenging issues that have already occurred (Cloutier et al., 2016). In other words, they are precisely those breaches that were caused by a party that has either performed its obligations improperly or incompletely or refused to fulfill its duties by the due date. A vast number of types of remedies pursued by the party that suffered the breach may, for example, include compensatory damages.

Overview of Vendor Management

Frameworks

A vendor management framework is a specially created logical system that is aimed at the development of a vendor management program. The framework typically consists of communicating and determining the value each vendor brings, managing vendors, recommendations for creating the program, and divesting and acquiring vendors (Ncontracts, 2018). Financial institutions are more often to use vendors, especially for those responsibilities and tasks that may be accomplished through technology.

The purpose of the framework is to describe in detail how to choose and evaluate vendors, as well as correctly negotiate with them. What is more, the ways of making an agreement and managing the vendors performance and the relationship with them are also provided by the framework. Finally, vendor risk management is also considered within a vendor management framework (Ncontracts, 2018, para. 4). As for particular examples, the integrated conceptual framework includes antecedents, moderators, and mediators of vendor management and is considered one of the most effective in this area (Verma & Girdhar, 2020, p. 63). Moreover, such a framework plays a central role in project management paradigm improvement.

Various Approaches

Since vendor management is such an enormous issue and a severe process, it is evident that various scientists and analysts have diverse opinions on the ways of finding an approach to it. Therefore, there is an extended number of different methods that are considered to be useful in vendor management (Cloutier et al., 2016). They generally include external assessment, interpretive strategy, the Kraljic Matrix method, and the Deloitte priority model. All these and some other approaches are proven to be effective and have certain positive and negative features that determine what procedure is more useful in a given situation.

External Assessment as Vendor Management Approach

As mentioned above, there are several methods and approaches that help companies manage their vendors successfully and effectively. For example, one of them is an external assessment approach. It is aimed at evaluating certain factors and forces that may either positively or negatively influence vendor management (Cloutier et al., 2016). In order to get a better idea of external assessment, it is necessary to discuss the usefulness, advantages, and disadvantages of this approach.

Description of the Approach

This method of external assessment is carried out by either third parties or stakeholders directly involved with the organizations. The purpose of this approach is to critically and independently evaluate the current and/or future suppliers, possible hidden or unnecessary costs, as well as other valuable information regarding vendors. Moreover, the external assessment technique assists in revealing the threats and opportunities of the company and its contract with suppliers.

The usefulness of the Approach

External assessment in vendor management helps to make this process more comfortable, beneficial, and effective. Thanks to this method, it becomes possible to reveal hidden threats and eliminate upcoming breaches unless they become too dangerous (Cleary & McLarney, 2019). Moreover, some unobvious opportunities that may increase the performance and overall success of the organization may be discovered with the help of this approach (Cleary & McLarney, 2019). Finally, external assessment is useful not only in vendor management but also in an extended number of other areas.

Advantages

Since external assessment is a necessary technique, it is hard to disagree that there are many positive features of this method. To begin with, people who carry out this evaluation typically look at matters from a new perspective and take a neutral standpoint (Cleary & McLarney, 2019). In other words, in most cases, such an approach can guarantee impartiality and objectivity of assessment (Cloutier et al., 2016). Second, a relatively simple but, at the same time, beneficial advantage is the fresh look and the creativity of an external assessor. The person or the company not involved in the organizations processes may provide a completely new and fresh opinion that would be as close to reality as possible but still not noticed by the internal assessors. Finally, another advantage of this method is its breadth of experience (Cleary & McLarney, 2019). Since external assessors work with a variety of organizations, they are believed to be quite skilled. Moreover, most situations tend to repeat from time to time, so an experienced external assessor may be completely sure what should be done to eliminate a particular vendor breach.

Disadvantages

Unfortunately, this approach is not entirely perfect, and a number of serious disadvantages make it not suitable for some vendor management situations. For instance, it was mentioned above that the performer of external assessment is typically objective. However, this advantage can turn into a shortcoming if the external assessor lacks cohesiveness and involvement. It is hard to disagree that these two concepts are usually rather necessary to understand, influence, and change the companys internal processes. That is why their absence may have a negative impact on the assessment results and the companys vendor management itself (Cleary & McLarney, 2019). Another shortcoming is that performing an external assessment may be much more expensive but without any significant difference in the results. Finally, such an approach requires collaboration, which means extra time for explanations, questions, and possible misunderstandings.

Viability to Managing Vendor Risk

This approach seems to be both useful and weak in managing vendor risks, and it totally depends on the specific situation. First, it may happen that a fresh look of the external assessor is able to notice and evaluate previously hidden vendor threats or risks that seemed rather safe (Cleary & McLarney, 2019). However, a completely opposite situation may happen, and to spot a vendor hazard, it may become necessary to be familiar with the internal processes, secret or rare information, or some specific conditions of the company. In this case, some other approaches, including the internal assessment, would be more useful.

Conclusion

To draw a conclusion, one may say that vendor management is indeed an enormous and challenging issue. The power and influence of the work of the suppliers over the company are hard to overestimate, and the consequences of vendor breaches are global. Fortunately, most of them are easy to predict and escape, while a number of others do not pose a severe danger. Various methods are useful in defining and evaluating vendor risks and the ways of solving them. The external assessment appears to be a practical approach to vendor management and breach elimination, but just as in any other method, its advantages and disadvantages are equally significant.

References

Cleary, S., & McLarney, C. (2019). Organizational benefits of an effective vendor management strategy. IUP Journal of Supply Chain Management, 16(4), 50-67.

Cloutier, T. L., Gray, S. B., Peckham, J. T., & Pierce, D. R. (2016). Vendor management system and process. U.S. Patent No. 9,317,824. Washington, DC: U.S. Patent and Trademark Office.

Davidoff, S. (2019). Data breaches: Crisis and opportunity. Boston, MA: Addison-Wesley Professional.

Kallberg, J. (2019). Top 7 vendor related breaches of all time. Web.

Ncontracts. (2018). Vendor management framework. Web.

Verma, S., & Girdhar, P. (2020). Integrated framework for vendor management: An interpretivist approach. Journal of Management Research, 20(2), 63-74.

Introduction

The above statement, which announces the end of remote working for Teslas workforce, directly results from Teslas lack of engagement and connection with its employees. Such an announcement requires consultation with every organization member regardless of their seniority. Since the matter directly concerns junior employees, involving them in the decision to alter their working schedule will help them prepare and embrace the changes wholesomely (Zogjani & Raçi, 2015). The company must continue providing its workers with the independence and security necessary for a profitable telecommuting model. Having a flexible work schedule is also suitable for morale in the workplace. Employees more invested in their work are more likely to report high positivity, physical activity, and health (Setiyani, Djumarno, Riyanto, & Nawangsari, 2019). Furthermore, studies conducted over many years have demonstrated that when people are engaged, they are more productive. This study analyzes Elon Musks comment on discontinuing remote working by examining the failures lack of sufficient engagement, poor workers care and adaptation, and low resource and information supply.

Discussion

First, the lack of company-wide participation and involvement among Tesla workers is the primary cause of the programs failure. Tesla still needs to provide its employees with the required engagement and involvement, which is why the remote working arrangement has failed. For employees to put up their best effort and produce fruitful results, they must feel they have a stake in the companys success (Zogjani & Raçi, 2015). Instead, the corporation has shown its employees that they can be replaced anytime. Therefore, workers are less invested in their work and producing results, which harms efficiency.

The second flaw in Teslas remote work arrangement is the lack of adaptability and care for employees. The effectiveness of a remote work arrangement depends on several aspects: the employees ability to be flexible and their general sense of well-being (Ray & Pana-Cryan, 2021). Tesla, however, has yet to give its workers either of these. Instead, employees are expected to work long hours and are not offered the option to telecommute. As a result, employees are more stressed and anxious, which has a knock-on effect of lower output.

Lastly, Teslas remote working arrangement has failed since the firm has yet to supply its employees with the required engagement and involvement. The corporation doesnt care about its workers flexibility or happiness, which are crucial to a productive remote work environment (Ray & Pana-Cryan, 2021). It is the latest in a series of actions by large employers to restrict remote work. Teslas statement is disappointing but not surprising. It reflects an increasing trend among employers to coerce workers into showing up to work and putting in long hours. But there may be better courses of action.

Tesla, a manufacturer of electric vehicles and a provider of solar energy, has a unique approach to business that is hard to replicate. However, the CEOs utterances that they will treat employees as though they have quit if they are out of the office for more than 40 hours per week sounds unprofessional (Brand, 2022). Perhaps, Tesla is unusual amongst businesses because it mandates office attendance from its workers. This has caused friction among remote workers, who feel they are losing their independence and autonomy. The company lacks a proper explanation for denying its employees a chance to participate in its decision-making process.

This essay contends that Teslas remote-work policy is immoral and breaches US Constitutional rights. Companies like Apple, Microsoft, and Google are called digital feudal rulers, and their lack of support for remote workers is criticized due to their inflexibility (Weidema & Hofmeyr, 2020). For that reason, the articles limitations are addressed. Employees are sought after for their adaptability and the possibility that they may provide answers to issues that cannot be resolved by the line managers alone (Azad, Anderson, Brooks, Garza, ONeil, Stutz & Sobotka, 2017). With the proper infrastructure, remote workers wont be a distraction to those in the office. Numerous studies have demonstrated the high productivity and increased employee engagement that result from allowing workers to do their duties from a distance.

In addition to showing a lack of trust in employees and their actions, the policy appears to run counter to instructions from the National Labor Relations Act and other ethical principles, as the authors point out. Teslas legal remote-work policy is unethical. Section 7 of the National Labor Relations Act allows employees to engage in such collective agreements for collective bargaining, mutual aid, or protection. Teslas policy of requiring employees to quit if they miss work breaches this right (Azad et al., 2017). Teslas regulations on remote work are unethical because of the negative impact they have on employees lives and livelihoods. When Tesla went public in 2014, it caused quite a stir because it was the first prominent American automaker to do so in almost a decade (Setiyani et al., 2019). In just a few short years, Tesla evolved from a relatively unknown electric vehicle maker to a household name. Elon Musk was named The Worlds Youngest Billionaire by Forbes. Numerous explanations have been proposed for Teslas sudden rise, such as its innovative products and marketing campaigns.

The unusual CEO of Tesla is responsible for the companys success and recent stock price dip. The media has been split between Tesla, with some calling Musk a real-life Iron Man and others saying hes rude and arrogant. Some surveys have found that as many as 85 percent of businesses utilize bonuses to motivate their workers. You will hear, At Tesla, we dont do bonuses; we pay for results. This means that bonuses are available at Tesla. However, they are not tied to the employees annual or quarterly performance but rather to their productivity in the workplace (The New York Times, 2018). The number of hours worked, and miles driven together make up a workers weekly productivity (work time). It may look like a punishment, but its designed to keep employees at Tesla. One caveat is that productivity issues may be one of many factors in the decision to cease remote employment (Foster, 2022).

Conclusion

In conclusion, the statement by Tesla CEO Elon Musk shows the gap in the capacity of Tesla to engage its employees. For that reason, no motivation can play such a role as a push to boost morale and participation among workers. Managers have a hard time monitoring worker productivity and addressing potential problems in a conventional office. Consequently, the organization device strategies like meeting one another, which can help the organization to improve connections between employees and managers in the workplace. While this decision may have some benefits, it also may have some problems.

References

Azad, N., Anderson, H. G., Brooks, A., Garza, O., ONeil, C., Stutz, M. M., & Sobotka, J. L. (2017). Undefined. American Journal of Pharmaceutical Education, 81(6), 102. Web.

Brand, A. (2022). Elon Musk ends remote working for Tesla employees: Is office working ideal? HRreview. Web.

Crowe, S., Cresswell, K., Robertson, A., Huby, G., Avery, G., & Sheikh, A. (2011). The case study approach. PubMed Central (PMC). Web.

Foster, J. (2022). The impact of managers on workplace engagement and productivity. Interact software. Web.

Guest, D. E. (2011). Human resource management and performance: Still searching for some answers. Human Resource Management Journal, 21(1), 3-13. Web.

The New York Times. (2018). Teslas Elon Musk may have the boldest pay plan in corporate history (Published 2018). The New York Times  Breaking News, US News, World News, and Videos. Web.

Noon, M. (2018). Pointless diversity training: Unconscious bias, new racism, and agency. Work, Employment and Society, 32(1), 198-209. Web.

Ray, T. K., & Pana-Cryan, R. (2021). Work flexibility and work-related well-being. International Journal of Environmental Research and Public Health, 18(6), 3254. Web.

Rogers, B. (2002). What changes and what stays the same in behavior management? Teacher Leadership and Behaviour Management, 4-19. Web.

Setiyani, A., Djumarno, D., Riyanto, S., & Nawangsari, L. (2019). The effect of work environment on flexible working hours, employee engagement, and employee motivation. International Review of Management and Marketing, 9(3), 112-116.

Torres, E. (2014). The limitations of history to the field of intelligence. E-International Relations. Web.

Weideman, M., & Hofmeyr, K. B. (2020). The influence of flexible work arrangements on employee engagement: An exploratory study. SA journal of human resource management, 18(1), 1-18.

Zogjani, J., & Raçi, S. (2015). The role of leadership in achieving sustainable organizational change and the main approaches of leadership during organizational change. Academic Journal of Interdisciplinary Studies. Web.

Major Facts

To improve customer service, reduce running costs, and improve the balance sheet, a computer peripherals manufacturer should find out how to reduce inventory. The company stocks items such as expensive engineering systems that customers rarely purchase and relatively inexpensive standalone PC support devices with a higher sales frequency. The management was tasked with updating the inventory and production of goods policies and methods to improve the situation.

Major Problem

The companys main problem in this context is the insufficient amount of inventory management efforts. With the proper level of categorization of goods by type, disposal of dead assets and reduction of the production scale of slow products, this problem should be solved and contribute to improving the companys efficiency.

Possible Solutions

There are several possible solutions to eliminate the problem of accumulation of inventory. Firstly, a computer manufacturer can conduct a logistics cost comparison across all divisions to determine inventory holding costs (Carlson, 2020). The classification of stocks by dividing them into types and separating the dead, slow ones from the majority is a convenient analytical tool. Managers should understand that, as a rule, companies get about 80% of their sales from 20% of their inventory (Carlson, 2020). The advantages of this method are its clarity and the ability to identify weaknesses in the inventory accurately. However, as a disadvantage, there is a possibility of incorrect inferences due to the excessive overall level of neglect of the stock organization. If the management situation improves, this method will do an excellent job of maintaining control as an expected outcome.

Secondly, a computer manufacturer can form a cross-functional team for the evaluation and disposal of excess and obsolete inventory. The inventory creation process should be viewed as an opportunity to improve the management of manufacturing operations and inventory (Ho et al., 2021). The expected outcome is to free up space and put the inventory in order. The advantage of this cardinal method will be a full-fledged strategy for further production with the prospect of developing the company and adequate use of stocks. However, the disadvantage is the loss of a significant amount of physical assets and the potential disposal of goods that could have been sold.

Lastly, a different approach may involve centralizing the function of logistics through the implementation of written policies and detailed inventory planning procedures. The inventory conditions can be systematized, predicted, reported, and managed through a renewed stock planning and forecasting information system (Lyu et al., 2020). It will achieve the expected outcome of making process management more efficient, better forecasting active stock sales, and avoiding overstocking. Blockchain-based technologies are a widespread solution today, and the Zero Inventory policy is implemented through remote management of warehouses, procurement, and supply logistics (Ho et al., 2021; Lyu et al., 2020). The advantages are the possibility of long-term planning and optimization of procurement at the local level, while the disadvantage is the high complexity of implementation and retraining of personnel.

Choice and Rationale

Implementing a centralized logistics function is the most optimal solution allowing for more detailed management planning than a simple analysis of the advantages and disadvantages of the current inventory. The element of technology application within the framework of centralization will simplify and automate most processes. As a result, managers of warehouses, purchases, deliveries, and sales will receive a work plan, and adherence to this plan will to lead to improved financial indicators. Management with the application of blockchain-based logistics tracking will guarantee the order in ensuring the availability of goods, and analytical forecasting of demand and procurement will simplify planning. Finally, management and reporting automation will simplify the works administrative aspects.

Implementation

Implementation of this plan can be done in several steps:

1. The decision to centralize logistics management on the highest level.
2. An analysis of technology procurements potential benefits and costs.
3. Special programs selection to monitor and manage logistics, procurement, and reporting processes.
4. Educating employees and testing technologies as part of the centralization of logistics management.
5. In case of success, technology implementation for half a year, with the subsequent re-evaluation of usage.

References

Carlson, R. (2020). How does inventory investment affect profits? The Balance. Web.

Ho, G. T. S., Tang, Y. M., Tsang, K. Y., Tang, V., & Chau, K. Y. (2021). A blockchain-based system to enhance aircraft parts traceability and trackability for inventory management. Expert Systems with Applications, 179(1), 115101. Web.

Lyu, Z., Lin, P., Guo, D., & Huang, G. Q. (2020). Towards zero-warehousing smart manufacturing from zero-inventory just-in-time production. Robotics and Computer-Integrated Manufacturing, 64(1), 101932. Web.

The continuous flow process type model is the most commonly used model to measure the capacity of firms in diamond value chain stages. The model allows for examining how much service a firm can produce given its resources and the demand. This information is important for assessing a firms potential and understanding how changes in production at one stage of the value chain can impact production at other stages. There can be multiple measures of a diamonds capacity, but the most common is carats. One carat is equal to 200 milligrams. Diamonds are also measured in points; a point is 1/100 of a carat, so that one-point diamond would weigh 2 milligrams (Collier & Evans, 2020). The capacity at the mining stage is based on the number of stones falling within a specific weight class. For instance, if sixty percent of all diamonds mined weigh less than 1 carat, then the mining stages capacity would be based on stones that weigh less than 1 carat. This approach ensures that all stages in the diamond value chain can meet customer demand for specific weight classes of diamonds.

Hudson Jewelers diamond cutters use the latest in cutting technology to craft each diamond to perfection at the cutting and polishing stage. The team follows a rigorous process for measuring a diamonds capacity, which is the volume of water that a diamond can hold without spilling (Collier & Evans, 2020). Capacity measurement is taken by filling up a calibrated glass container with water and carefully lowering the diamond into the water until it touches the water surface. The meniscus, or curved edge of the water, is then measured and used to calculate the capacity of the diamond. Capacity can be measured at the jewelry manufacturing for custom and standard jewelry stage by counting the number of pieces produced in a certain time frame (Collier & Evans, 2020). For example, a company might produce 1000 pieces in one hour. At the retail store stage, capacity can be measured by counting the number of customers served in a certain amount of time. For example, if a store serves 100 customers in one hour, then its capacity is 100/hour.

Reference

Collier, D. A., & Evans, J. R. (2020). Operations and supply chain management. Cengage Learning.

Introduction

Environmental factors that cause risk

The success of any business is highly dependent on the strategies it employs as well as the environmental conditions in which it runs. The business environment of today is being changed frequently. Changes in technology, market, and political environments increase the uncertainties of managers as they try to make decisions. This usually makes obsolete or fruitless the business practices of the past. Irrespective of the kind or magnitude of business, the situation is similar. Todays managers encounter external factors that are changing significantly. The manager therefore is required to be familiar with such changes and should be in a position to comprehend them and react to them in an appropriate manner. Any of the changing factors may have a significant influence on the decisions and success of businesses. As a result of the changing environment, decision makers operate under conditions of uncertainty (Daft and Marcic 2009).

The result of such environmental variations and uncertainty is the dramatic changes in the competitive nature of todays business. Many newer, and less conventional competition at times international, are entering the markets. This is especially the case with unregulated industries such as trucking, telecommunications, financial, airlines, and travel industries. In most occasions, the competitors introduce new products and services, newer modes of competition as well as more efficient methods of production such as lower costs of labour. As a result, the traditional modes of competition are rendered obsolete. Due to the dramatic change of business environment and uncertainty, numerous techniques have been proposed and used to deal with the uncertainty and manage risks (Slywotsky 2004).

Decision making in businesses

A decision refers to a choice made from available alternatives. Decision making is the process in which people identify problems and the possible opportunities and then try to resolve them. The decision making entails effort both before and after the actual choice is made. For instance, the decision to hire one of the applicants for the position of a junior auditor necessitates the accounting manager to determine if a new junior auditor is indeed required, ascertain the availability of possible job candidates, interview the candidates to obtain the required information, choose one candidate and follow him/her up with the socialization of the new employee into the organization to make certain that the decision is successful. There are two categories of decisions that businesses have to make: programmed and non-programmed decisions (Daft and Marcic 2009).

Programmed decisions entail conditions that have already taken place frequently enough to assist the decision makers to develop and apply appropriate solutions in the future. These decisions are made in reaction to persistent organizational challenges. Examples of a programmed decision include the decision to make additional orders of paper and other office supplies when inventories fall below a specific level or the decisions that concern the types of skills needed to fill certain job vacancies. On the other hand, non-programmed decisions are made as a reaction to exceptional events, are inadequately defined and mostly unstructured, but have significant repercussions for the firm. Majority of the non-programmed decisions entail strategic planning due to the great level of uncertainty involved and the complexity of the decisions. Examples of non-programmed decisions include the decision to construct a factory, the decision to develop a new product or service, the decision to enter into a new geographical market, the decision to move the firms headquarters to a different location and the decision to invest in the stock market (Daft and Marcic 2009).

A good example of a non-programmed decision is the decision by ExxonMobil to enter into a consortium to drill for oil in Siberia. This decision created one of the largest foreign investments in Russia and the costs involved are more than $12 billion (Daft and Marcic 2009). The major difference between the programmed and non-programmed decisions is the degree of risk and uncertainty involved. Programmed decisions are less risky because they are made based on events that have already occurred or are occurring presently. On the other hand, non-programmed decisions are highly risky because they are made based on future and predicted events. Nevertheless, the risk involved in non-programmed decisions cannot stop businesses from engaging in them. This is the reason why techniques have been created and proposed to assist businesses minimize the risks involved in decision-making and forecasting. This paper will examine a few of the techniques used to manage risk and uncertainty namely: investment in corporate venture capital, scenario planning, and business process modelling.

Risk and Uncertainty Management Techniques

Investment in corporate venture capital

Companies have often reacted to the necessity of continuous innovation through corporate entrepreneurship strategies for instance the creation of additional businesses within the current business and/or making changes to the current businesses through strategic renewal. However, a common problem facing firms is the decision of how to organize for far-reaching innovation because structures needed to optimize on the existing resources can hinder a companys capability to react swiftly to innovations that are troublesome to the business. Even though corporate entrepreneurship often entails internal venturing, new projects may prove to be more effective when established outside of the firm. As a result, large firms may reap benefits from expanding their territories by forming partnerships with and making investments in small entrepreneurial ventures (Henley 2007).

Minority investments offer enhanced bargaining power of firms and enhance their coordination with the venture. Vertical strategies are important for the strategic management of the firm because it requires a stable and continuous supply of raw materials and a market for its products. This has been demonstrated by the investment of IBM in Intel whereby the minority investment increased IBMs bargaining power to better ensure the availability of supplies and to prevent its competitors from gaining control of the small company supplier. This is important in cases where small firms have fundamental competencies that enable them to produce better inputs or to engage in more efficient production than the large firm (Deogun & Scannell 2000). To help establish a market for its goods, Intel has made numerous investments in fledging ventures that buy its goods, a similar action was taken by Compaq Computer before it was bought by HP (Hill & Rothaermel 2003).

Minority investments create limits for the investing firms asset exposure and risk while at the same time they retain the strategic flexibility that is significant when the ventures technology or market is in its initial stage or is altering drastically. Two techniques of managing risk and uncertainties that may be valuable in corporate venture capital strategies include a real options approach and diversification. In the real option approach, a firm can make investments in promising ventures using a comparatively limited resource commitment for minimal asset exposure. However, as the firm obtains additional information, the level of uncertainty is minimized and, the larger firm can enhance its investment and even acquire the venture if both parties consent to the arrangement (Beer & Nohria 2000). If the expected benefits of the minority investment are not achieved or the technology of the small firm becomes obsolete, the resultant loss, in form of money and time is negligible. This strategy enables firms to invest in projects that may lack a significant impact in the immediate future but can improve the future opportunities of the firm. A collection of ventures makes the diversification of the firm possible because not everything relies on a sole partner. Large firms can protect their bets by making investments in numerous small firms that offer similar but somewhat diverse innovative technology. This strategy is effectual in extremely uncertain business environments because it can spread the risk until the emergence of a dominant firm, technology or product is realized (Bourgeois, Duhaime & Stimpert 1999).

Scenario planning

In a business environment where changes may be unpredictable and occur suddenly, companies have to be prepared for identifying changes and adapting accordingly (Ahn 2002). Under such an environment companies need strategic planning to be flexible enough to survive. However, formal strategic planning methods have not proved satisfactory (Mintzberg 1994), nor have traditional forecasting methods provided credible answers under changing environments (Bunn & Salo 1993). Correspondingly, strategic planning moved towards a new style in the 1990s (Taylor 1997): less bureaucratic formal planning, more emphasis on implementation and innovation and fewer staff planners but more line managers and teams of employees (Clarke 1997). In particular, the dissatisfaction with formal planning and forecasting techniques has resulted in the development and widespread use of scenario planning (Phelps, Chan & Kapsalis 2001).

Scenario planning was first used in the Second World War. Kahn brought the approach to the business world through his associations with the RAND Corporation and later the Hudson Institute. Throughout the late 1960s scenario planning gained popularity in the corporate world. One of the well-documented applications of scenario planning was at Royal Dutch/Shell Group. Through a framework for constructing a flexible and dynamic world-view, Wacks (1985) team made significant progress in adapting to a changing business environment. They used scenario planning for broadening the perspective of key decision makers and as an effective communications vehicle for disseminating new thinking throughout the organization. Wack and his colleagues considered the scenario technique central to Shells success in the 1970s and 1980s. Other success stories of scenario planning include: Cable & Wireless, the US Electronic Commerce Resource Centre, Electrolux, the UKs National Health Service, KRONE, Shell and United Distillers (Ringland 1998). The applications were based on the premise of scenario planning: preparing for the future by understanding the driving forces behind major uncertainties rather than holding a simple view of the world.

Scenario planning takes place in a sequence of five stages: opportunity identification, design, testing, introduction and life cycle management (Urban & Hauser 1993). The best market to enter is defined in the opportunity identification step and ideas for market entry are then generated. The ideas are converted into a physical and psychological entity in the design step through engineering, advertising and marketing. Actual products or services and marketing/advertising strategies are evaluated until they are ready for a market test. The product or services are then tested in the testing step along with marketing/advertising strategies. If the final testing is successful, the product or service can be introduced to the market. In this step marketing warning signals have to be monitored and handled to improve the product or service launching process. Once the product or service is successfully introduced life cycle management begins. In this step return on a successful product/service launch is realized and periodic improvements and strategic movements are used for maintaining maximum profitability over the products life cycle.

Business process modelling

In the context of information processing, a business process can be defined as a series of transformation steps used to create information from data. For example, in the financial services sector, loan applications are turned into creditworthiness indicators. The business process uses resources such as computer systems and labour to turn inputs into outputs. The business process model is an instantiation of the workflow necessary to turn inputs into outputs (Cemauskas & Tarantino 2009). The governance of business process management is described by Spanyi (2008). Spanyi argues that it is critical to overlay a form of corporate governance that empowers the appropriate organizational framework. It also needs to create rules with a system of measurements and alerts to manage an organizations end-to-end business processes. A first step in any business process model deployment should be to create a business process management governance framework. Then one can proceed with finding the fastest and cheapest way to get from process A to process B. It should include an enterprise-wide collaboration that goes across functions and locations while enforcing management accountability and compliance to all applicable standards and regulations. Therefore, it makes sense that proposed business process models be reviewed by such stakeholders as the chief compliance officer, chief risk officer, and internal auditors, before going into production (Cemauskas & Tarantino 2009).

Business process management is a successful methodology, in most cases, because it presumes that owners of businesses just have an overall notion of their needs but not how they can attain an optimized process. Business process management also presumes that needs will be altered as process and technologies are implemented and used. When replacing labour-intensive and/or inefficient manual risk management processes with automated controls, workflows and electronic forms, business and IT users will typically recognize additional opportunities to shorten and standardize processes. Business process modelling would typically look to apply a Pareto approach  providing 20% of functionality that offers 80% of the benefits. As business users become more familiar with the new processes, they will become much more likely to propose improvements in functionality. Unlike the rigid waterfall approach, business process management supports a feedback mechanism and variations in the initial plan of a process. This is particularly vital when dealing with the multifaceted and often intricate characteristic of financial risk management.

Business process modelling allows an organization to gain insight, reduce risk, and potentially optimize a process. It provides a framework from which key risk and performance indicators can be identified and utilized to indicate quality process performance when process metrics fall within pre-specified tolerance limits (Wiel et al. 1992). Additionally, business process modelling provides the framework into which process controls for monitoring, adjusting and controlling the output of a process can be added. Classical control theory has been used in manufacturing for years to improve the quality of and reduce the losses associated with the business processes of any firm. Process control can be executed using statistical methods (statistical process control). Statistical process control attempts to answer two main questions: Is the process under control? Does the process meet the intended specifications? (Pruett & Schneider 1993). Statistical process control (SPC) has been employed extensively to monitor and control processes through the use of control charts and focuses on eliminating the root cause of variability. Statistical process control tries to improve the process over the long run. It focuses on the oversight of processes and fault recognition with minimal process adjustments. Statistical process control is most effective when the process outputs are independent and identically distributed and the quality goal is to find departures from this assumption (Michaud 1998).

Conclusion

Businesses are often exposed to environmental factors which expose them to risk and increase their uncertainties about the future. The worst thing about environmental factors of risk is that businesses lack control over them. Despite this, businesses have a wide range of options that can be used to manage their risk and uncertainties about the future. While the options are numerous, this paper focused only on investment in venture capital, scenario planning, and business process modelling. Risk and uncertainty management techniques enable firms to accurately predict future occurrences and to implement measures that will cushion the firm against incurring losses when the events do indeed occur. In short, risk and uncertainty management techniques make it possible for firms to make decisions that serve the best interest of the firms.

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This report examines contemporary approaches to Project Risk Management, their advantages and disadvantages. The paper further makes recommendations as to appropriate risk management process that should be implemented within the context of my organization. A risk is an issue that might come up. If it happens, it may affect the project positively or negatively. Risk management is the identification, assessment of these risks and planning on what to do or what actions to take when they occur.

Risk management is important because there when least expected. Additionally, whether a risk comes up when expected, unless there was prior preparation, managing it becomes very difficult. Managers cannot be able to avoid risks but they can manage them. Risk management is carried out in the whole project as it develops. In-calculating risk management in the project development process leads to the success of the project because management would have identified the sources of these risks early enough.

There are three different contemporary approaches to risk management. The three approaches are; project management body of knowledge, PRAM and AS/NZS 4360 standard.

The Institute of Project Management provides an approach known as project management body of knowledge (PMBOK). Project management body of knowledge consists of four major processes. These include, risk identification, risk quantification, risk response development and risk response control.

Risk identification involves analyzing the risks that can affect a project. It is vital for the risk identification mechanisms to be assessed at regular intervals throughout the project development. It should involve careful consideration of external and internal factors such as budget allocation, work delegation policy analysis and economic factors.

The approaches involved in risk identification include organizing a workshop for the information technology people who will identify the problem. There are different types of risks and each risk has to be approached according to its peculiar characteristics. In identification of a risk, the source of the risk should be identified. During identification, it is important not to skip any risk. Risk identification also involves identifying what generates those risks and any sign that shows that a risk is going to happen. This process results into generation of a list showing the risks in the project. Its easy to investigate the events that may lead to risks when the source of the risk has been identified.

In risk quantification, all the information about all the possible dangers is analyzed. This process helps risk managers make a risk decision. It also involves the assessment of how different risks are related and how they communicate with each other. Qualitative risk analysis assesses how the identified risks affect the cost of the project, schedule and objectives. There are several different aspects of risk qualification. There are complex calculations which may lead to inaccuracy and inconsistency. In addition to these, a risk event may lead to a snowball effect. Ways to exploit this risk and the chance of a risk occurring may communicate in ways not expected.

Risk response development is a process in which options are developed in order to minimize threats so as to increase opportunities. The options developed include avoiding measure in order to stop the cause of the threat. Another option is mitigating which is reducing the cost of a risk event by minimizing the possibility of it happening. In addition, accepting the consequences of a threat is developed.

One advantages of project management body of knowledge is that project managers who strictly follow this technique are well guided because its a detailed process. The details it provides enable a user to be able to follow through without loosing track. It also means one does not have to be an expert to use the method. The detailed directions can be used to direct user towards affecting a risk management process. Another advantage of this approach is that management processes and risk management processes combine well to make it successful. Any project unless fully supported by management processes is bound to fail. Therefore, the idea that risk management can go well with the risk management processes leads to success of the risk management process. The implementation of this process is cost effective.

One disadvantage of this technique is that it may be quite tiring and not good for big projects. Another disadvantage is that complex calculations involved in this process may lead to inaccuracy and inconsistency.

The second contemporary approach to risk management is UK Association for Project Managements Project Risk Analysis and Management (PRAM). This is a guide for new users on project risk analysis and management. It involves studying and organizing risks on different projects. When project analysis and management is implemented well it results to successful cost effective projects; projects finished in expected time and of required performance.

This guide which offers practical framework for new users is divided into risk analysis and risk management categories. Risk analysis includes qualitative and quantitative analysis. Quantitative risk analysis involves use of statistical methods or approaches to gather relevant data. There are numerous statistical methods that can be used in gathering information. Further, statistical methods like linear programming are used to optimize solutions. Quantitative analysis deals with numbers to ensure exact measures or risk are established.

Qualitative analysis is the identification and recognition of non numerical factors which lead to risks. These non numerical factors could be issues to do with management processes, employee attitudes or quality of items and tools being used. Qualitative involves an assessment to describe risks and their consequences. Quantitative analysis on the other hand helps remove uncertainties on cost and time estimates as well as individual doubts.

Risk management describes managements response to risks and it includes a number of measures. First it concerns identifying measures so as to prevent and minimize risks. It also includes implementing plans to respond to risks. In addition, investigation of useful information in order to reduce uncertainties is carried out. Transfer of risks and its consequences to a third party or asset is another preventive measure carried out by the management. Furthermore, allocation of risks in contractual agreements and allocating budgets by setting possibilities is another way management responds to risks. PRAM is a structural process which makes it easy for managers to understand and learn.

The techniques involved in this approach are detailed and to the point. Because of its detailed techniques, the process is useful for project team in that it guides it all through the project development. Details of activities and tasks come with significant inputs and result to expected outputs. Another advantage is that it provides a direct connection to the management. The advantage of using the risk concept of avoiding is that the risk will be avoided and the cause of the risk eliminated as well. The concept of transfer of risks and its consequences to a third party is advantageous because it means responsibility of managing the risk now lies on a third party.

The first disadvantage associated with PRAM is that it uses broad concepts that are subjected to several discussions. The transfer of risks may also affect the budget of the project if it was initially not included.

The third strategy known as AS/NZS 4360 standard is a strategy that was developed to help private and public organizations on risk management. This standard is a methodology specifically for risk management. It is a highly structured method that can be used on any project. However, in order for it to suit an organizations objectives, the methodology has to be modified. Risk management process for AS/NZS 5360 standard consist of five steps. Step one is the establishing of the objectives and situations for risk management. The second step is to identify the risks. Next is analyzing possibilities of risks occurrence and their consequences as well as estimating the risk level. The fourth step is evaluating and placing the identified risks according to their levels. The last step is to deal with the risks in the most suitable options and measures.

This standard is simple thus is easy to follow. It can also be used on any type of project because its easy to follow. In addition, it is can be able to support different levels of risks. The standard is acceptable and many organizations use it worldwide. One disadvantage of using the standard is that the way it is implemented does not accommodate assessment of risks.

Changes in Information technology at times may lead to poor executions of projects or production of low quality products. I work in an organization that efficiently manages information technology. Most of our projects are new information technology driven, which helps towards efficiency and effectiveness for customer delight. Risk management is always done and careful planning is also done so as to reduce risks and take advantage of opportunities that come up. My organization takes security of software very seriously and strictly follows standards that are recognized worldwide.

AS/NZS 4360 risk management standard specifically handles risks. It is also recognized worldwide and used by many organizations. It is a strategy that was developed to be used by private and public organization thus it is flexible and can be used in any organization. It is also a good strategy because only a small team is required to conduct risk management. Additionally, inputs to the project are only obtained by the appropriate teams in the project. The method is highly structured and can be used for any project in my organization. It is can also be adjusted and modified to suit the objectives of any organization.

Implementation AS/NZS 4360 risk management standard is very cost effective and enough resources must be allocated. The risks and measures taken are attended to according to urgency thus priorities are set. This standard is detailed but suitable for a government organization or agencies which deal with risk control, maintaining of budgets and data security, which is the number one priority. The other thing about this standard is that by adopting it, people have to be trained and roles and responsibilities of personnel have to change. It is a very easy and simple strategy for people to follow, this means that it may take a short time to train people. AS/NZS 4360 should be included during the planning of the project. It involves change of roles and responsibilities of personnel and this change might take time and planning as well. Therefore, management has to take a very significant role of communicating continuously to the staff. In addition, management constantly plays the role of delivering policies to the staff. AS/NZS 4360 requires input from staff and project managers. By doing this they raise awareness towards a common understanding concerning project risk management being achieved by both management and staff. AS/NZS 4360 standard gives opportunity to staff and management to work together in order to achieve the objectives of the organization. This standard supports different levels of risks thus it is suitable for any project which produces different levels of risks.

PMBOK and PRAM may have similar effects when adopted. The strategies are both easy to understand but they may not be effective for risk management in an organization. For a private or public organization the processes of PRAM and PMBOK may be hard for staff to understand and comply.

There are issues such as culture and organizational structure that might make some strategies not work in my organization. The management needs to understand the importance of third party audits that assess the process of risk management. Third party audits may incur cost but they are very important because they assess the internal risk management team. This ensures that risks are managed effectively. Extra costs leading to avoidance of external risk auditors may lead to strategies not being successful. People always take risk management as a process of blaming and exposing errors in a project. This culture and belief has to end and give way to the understanding that risk management is the only sure way to manage doubts concerning a particular project. These are negative attitudes that have to be eliminated in order to make project risk management successful in any organization. All projects have risks and risk management is always important in every phase of project development.

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