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Risk Management Audit in Company

   

Added on  2020-03-15

16 Pages3294 Words102 Views
RISK MANAGEMENT AUDIT OF TRANSPORTATION AND LOGISTICS COMPANYContentsIntroduction...........................................................................................................................................2Risk Management Audit........................................................................................................................2Risk Management..............................................................................................................................2Disaster Recovery Plan......................................................................................................................9Business Contingency Plan..............................................................................................................10Controls...........................................................................................................................................12Organizational Structure..................................................................................................................13Conclusions.........................................................................................................................................13References...........................................................................................................................................141

RISK MANAGEMENT AUDIT OF TRANSPORTATION AND LOGISTICS COMPANYIntroductionMaersk Group is a Danish company that provides transportation and logistics services in over130 countries. The company has its head office in Copenhagen, Denmark and subsidiariesacross the world with over 88,000 employees working for it. It has a fleet of over 650container ships and it transports over 15 million containers through these ships around theworld. This is a report on risk management practices that is used by the company formanaging its risk portfolio. The report would investigate the risk management strategies usedby the company with an aim to assess their effectiveness. It would analyze the current riskfaced by the company and would do its mapping. The report would also explore how riskmanagement practices like disaster recovery, risk contingency planning, and businesscontinuity planning can be used by the company. The organizational structure used for riskmanagement along with the control processes would also be analyzed in this risk audit report.Risk Management AuditRisk ManagementThe company uses standard steps for managing risks in the organization including risk identification, assessment, ranking and response planning.Risk Identification: The micro and macro aspects related to multiple organizational andindustrial perspectives can be explored to identify risks faced by the organization. Theseinclude social, political, temporal, environmental, financial, legal, geographical, technical,managerial, and outreach perspectives. These perspectives can act as key risk topics andwhen they are delve deeper into, sub-topics related to risks can be identified which wouldhelp in identification of specific risks or risks that may be faced by the logistics andtransportation services organization.Risk TopicRisk Sub-topicsRiskRisk DescriptionSocialCulturalChange Employee resistanceThe company is going through acultural change that may not beaccepted easily by itsemployees who may fear thechange as negative. This causes2

RISK MANAGEMENT AUDIT OF TRANSPORTATION AND LOGISTICS COMPANYresistance in employees towardschange[ CITATION JOC14 \l16393 ]CompetitionHigh competitionreducing market shareIf the competition is high thenthe market share of thecompany would be affected.One of the major competitors ofMaersk is Hanjin in Koreawhich is fighting with Maerskfor the first position in the highend shipping segment[ CITATIONOle13 \l 16393 ]TechnicalSystemCyber attackIf the IT systems used by thecompany face problems likecyber attacks, they can causedisruptions in its operations.The company’s systems hadfaced a major cyber attack thathad affected most of itsapplications such that thesystems had to be shut down.Maersk took a week to make1500 of its applicationsfunctional again after the attackwas identified[ CITATIONReu171 \l 16393 ].PoliticalSecurityIn-transit loss of goodsIf the cargo gets damaged intransit then it leads to a loss forthe customer of the companyand a reputation loss forMaersk[ CITATION Exp11 \l16393 ]FinancialRevenue lossIncrease in cost leadingto revenue lossIf the freight rates and oil pricesrise, it would affect the3

RISK MANAGEMENT AUDIT OF TRANSPORTATION AND LOGISTICS COMPANYoperational profits of thecompany leading to loss ofrevenues because of increase incost of operationsInfrastructureTransportation delaysPoor infrastructurecausing delays indeliveryIf the infrastructure used fortransportation of goods such asport infrastructure near seas isnot up to the mark or notsufficiently developed then itcan cause delays in transportinggoods to customers of MaerskEnvironmentalAir PollutionAir pollution from shipemissionsThe ships used for transportinggoods via sea cause emissionsthat can pollute theenvironment. Shippingcontributes 4% to the globalCO2 emissions[ CITATIONThe113 \l 16393 ].OutreachMarketingIncorrect customersegmentationThe company has been trying todevelop a segmentation modelfor the categorization of itscustomers but failed to come upwith an effective model whichmade it difficult for thecompany to market itselfefficiently[CITATIONPlaceholder12 \l 16393 ].Risk Assessment: The strategic objectives of the company can be explored to understandhow the identified risks can affect the strategic positioning or operations of Maersk group.Strategic objectives of an organization can come under any of the common four categoriesincluding provision of highest quality of products or services, creation of global environment,providing efficient solutions, and creating cooperation with the social and businessenvironment. 4

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