Risk Management in EE Limited, AstraZeneca and Royal Bank of Scotland

This report discusses the concept of risk management in context to three organisations; EE limited, AstraZeneca and Royal Bank of Scotland. It includes the details on how the three organisations assess risks and take initiatives to control and manage these risks.

Risk management
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Table of Contents
Introduction ....................................................................................................................................3
EE limited...................................................................................................................................3
AstraZeneca................................................................................................................................3
Royal Bank of Scotland..............................................................................................................3
Risk assessment and identification .................................................................................................4
Assessment of risks.....................................................................................................................4
Classification of risks..................................................................................................................6
Responses to assessed risks ............................................................................................................7
Mitigation of risks.......................................................................................................................7
Practices to measure business risks ............................................................................................8
Risk communication .......................................................................................................................9
Conclusion ....................................................................................................................................11
References.....................................................................................................................................12
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Introduction
Risk management is associated with the process of identification and assessment of risks
in order to make plans for controlling these risks. Risks can be arised form a range of factors in
an organisation which includes uncertainties regarding finance and other legal and technical
issues as well as other nature of risks (Greuning and Brajovic-Bratanovic, 2022). In this report,
the concept of risk management is discussed and explained in context to three organisations; EE
limited, AstraZeneca and Royal Bank of Scotland. This report includes the details on how the
three organisations assess risks and take initiatives to control and manage these risks. In this
report, the discussion regarding approaches adopted by these companies for the purpose of risk
management will take place.
Overview of companies
EE limited
EE, the formal name of which is everything everywhere, is a British based mobile
network operator which is a subsidiary of the BT group and is also a internet services provider.
The telecommunication organisation was founded in 2010 and is the second largest mobile
network operator headquartered in London, United Kingdom.
AstraZeneca
AstraZeneca is a British-Swedish pharmaceutical public limited company which is
headquartered in Cambridge, united kingdom. The company was established in 1999 and is a
prominent biotechnology company. The company was formulated through merger of the Britain
based Zeneca group and Sweden based Astra AB.
Royal Bank of Scotland
RBS is a prominent banking retail and commercial bank headquartered in Edinburgh
Scotland, United Kingdom. The bank majorly operates in Scotland with its locations of almost
700 branches along with various branches in major cities within England as well as Wales. The
organisation is a subsidiary of NatWest Holdings and it was founded in the year 1727 dealing in
providing financial services such as consumer banking as well as corporate banking and
insurance to a number of clients.
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Risk assessment and identification
Assessment of risks
EE Limited High competition in the telecommunication market: The telecom industry is full of
potential rivals and the organisation face disruption in its operations by a range of
activities promoted by existing mobile network operators to consolidate their position in
the market. Interruptions in telecom networks and infrastructure: The operations of the
organisation highly relies upon the stable connections and high networking. To operate in
a competitive environment and being a internet service provider, the disruptions in IT
infrastructure is a critical risk factor for the enterprise (Fell and Hartford, 2018). IT
operations are very prone and vulnerable to attacks which makes it a constant threat for
the company as it could leads to loss of sensitive data and information of customers. The
failure in supply chain leads to high costs and impact upon services of customer and ruins
reputation. The influence of regulatory bodies: The company has to ensure compliance with
standards and requirements of its regulatory bodies which are associated with telecom
sector in UK. The company is influenced by any decisions taken by these regulars as it
seriously impacts upon the operations of the organisation. Issues regrading spectrum: Telecom industry highly relies upon spectrum as it is the
lifeblood of the operators engaged in telecommunication services. Spectrum refers to a
range of electromagnetic waves and telecom spectrum is related to frequencies which are
required for the transmission of sound as well as data across various geographical
boundaries to cell phones (Araz and et.al., 2020). The organisation obtains correct level
of spectrum with the assistance of spectrum auctions. The company's failure to acquire
proper spectrum needs could leads to major disruptions in its operations. Privacy and security concerns: The company deals in customer telecom and internet
providing services and has access to a large number of confidential data of customers and
protecting their privacy is a constant concern of organisation.
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 Financial risks: There are a range of financial factors which serve as a major risks for
the company regarding its dividends, capital reserves, debts, creditors, sources of funds
etc.
AstraZeneca Risks associated with development of vaccine: One of the major risks that are currently
identified and assessed in context to AstraZeneca is the risk factors associated with the
formation of its vaccine developed as a means to cure the fatal disease of Corona Virus.
Vaxzevria is highly effective and providing benefits through eliminating the symptoms of
COVID-19. However, there are certain risks associated with the vaccine which can cause
serious blood clots in some case which is very rare though. Counterfeiting of drugs: A counterfeit medicine refers to the drug which is mislabelled
with respect to another identity and is a fraudulent practice in pharmaceutical sector.
This practice is a major threat as counterfeiting of drugs leads to decline of reputation
and illegal use of brand name on such products majorly impact on the integrity of the
company. Disruptions in supply chain: the distribution process is a lengthy procedure and is
associated with involvement of many stakeholders; wholesalers, logistics, retailers etc.
every step which is involved in the process of supply chain for pharmaceutical
companies, the threats of criminals is a constant risk.
 Increased level of competition: The competition in pharmacies is getting tough day by
day and it serves as a constant threat for the company and is highly influencing its growth
and performance (Munir and et.al., 2020).
Royal Bank of Scotland Macroeconomic issues: The bank face risks of increasing impairments which is a result
of defaults in sectors mainly real estate and shipping. The critical economic collapse has
further increased impairments and the organisation also faced obligations for the support
of pension schemes and it is held responsible for major investment related with the assets
of schemes. Legal risks and regulatory issues: As a result of the failure of achieving fair consumers
outputs, the conduct costs of the organisation has increased which has also lead to the
threat of reputational damage. With respect to mis-selling, the corporation has increased
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its costs further as it failed to demonstrate compliance with regulatory standards and
framework. Moreover, further losses and damage of reputation is a continuous threat
which has arised from litigation. Risks regarding operations: Cyber attacks and issues in information technology is a risk
which leads to losses and high costs as well as lost consumer confidence in the services
of the enterprise.
 Political threats: The major principal operator subsidiary of the bank is headquartered as
well as incorporated in Scotland. The result of the referendum which has been hold by
government of Scotland is causing uncertainties and its outcomes will suggest fiscal and
monetary as well as legal changes in regulatory framework of the organisation (Ivanov,
2018).
Classification of risks Economic risks: This risk factor exists in business organisations due to fluctuations in
market which sometimes leads to positive changes whereas other times it has negative
implications on a company. Compliance risks: These risks are associated with legal problems which arise as a result
of breaching of laws and standards. For instance, AstraZeneca has to ensure compliance
with the medicines and healthcare products regulatory agency in order to operate
business in ethical way. Security risks: This risk is associated with theft of data and breach of privacy which is
leading to cybercrime and fraudulent actions in companies (Gupta and Sikarwar, 2020). Financial risk: Such risks mainly includes extension of credit or high debts as well as
fluctuations of interest rates. Every business enterprise is prone to financial risks and it
has to effectively plan budgets to avoid such risks. Reputation risks: These risks arise due to companies involvement in controversial
matters and any fraudulent practices which might leads to reputational damage.
 Operational risks: Such risks could be a result of companies external or internal factors
which might leads to disruption in flow of production or provision of services.
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Responses to assessed risks
Mitigation of risks
EE Limited
 The organisation is focused upon establishment of a resilient administration and ensures
compliance with standards. Developing a cost effective audits is required for monitoring
the activities and operations to address the risks of data theft and privacy breach.
 The organisation pays emphasis on eliminating unnecessary controls and attempts at
creating a centralized evidence repository which should be also easy to access.
 Implementing a robust program to mitigate IT risks as well as automation of monitoring
workflow is a great approach that company adopts to address IT risks (Valinejad and
Rahmani, 2018). This enables the organisation in assessing threats so that they could be
surveyed and controlled.
 The company focus on integrating and automating technologies so that it can leverage its
current information technology expenses in order to establish areas of priority where
risks assessed are higher (Manhart, Summers and Blackhurst, 2020).
 The company attempts at reducing its financial risks through ensuring the credibility of
its clients as the organisation face serious credit risks.
AstraZeneca
 In order to address and mitigate risks of counterfeiting of drugs, the company attempts at
joining forces with organisations like international anti-counterfeiting coalition Inc.
which is a non for profit corporation and its aimed at eliminating counterfeit product in
order to address the health related concerns for individuals. The company also focus upon
devising strategies of brand protection so that the risk of practices of counterfeiting
cannot ruin its reputation and goodwill.
 For effective supply chain management, the company has gone to great extent for the
purpose of protecting its products by the introduction of a innovative measure of security.
This security measure enables the suppliers to tag packages of medication with radio
frequency identification tags so that they can track their products in the process of
logistics and distribution.
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 For the purpose of mitigation of health risks, the company focus upon researching and
obtaining information form healthcare professionals on drugs and warnings as well as
precautions as on how to correctly intake a medicine and what are its implications.
 To reduce medications frauds, the company focus upon its packaging which implies
proper instructions and advice on the package. The important instructions on intake and
size on packaging is crucial to ensure for a pharmaceutical company in order to comply
with legal standards as well.
Royal Bank of Scotland
 The organisation focuses upon optimising the situations of group's shipping as well as
real estate portfolios. In order to mitigate risks of increasing impairments, this is a
strategic plan of the capital resolution group. The bank has made plans and strategies to
focus upon cost reductions and minimising their vulnerabilities taking into consideration
the slow economic growth after COVID-19.
 The organisation focus upon improving customer services through complying with their
ethical concerns (Yang, Wang and Ren, 2019). The organisation has implemented
simplification of its products and stopped offering others.
 The bank make effective use of technology to combat with security issues such as
installing effective anti-virus programmes in their systems. They focus on continuous
improvement of systems to address and mitigate technical risks through enhanced back-
up systems.
 The bank focus upon mitigation and elimination of its financial risks and losses through
assessing credibility of its clients. It pays emphasis on improving its lending frameworks
and structure and granting loans to credit worthy individuals to avoid losses (Vishnu,
Sridharan and Kumar, 2019).
Practices to measure business risks
For the purpose of effective risk management, companies have to engaged into
measuring risks so that their extent could be measured. There are mainly two common
approaches that is adopted by an organisation to measure the extent and threat of a risk: Deduction method or priori principle: Under this approach, an organisation attempts at
measuring its risk on imaginary basis without considering any past experience. For
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instance, if an organisation is involved in illegal practices, there exists possibilities that it
might be punished sooner or later.
 Past experience method: An organisation tries to analyse risks based on its past
experiences to determine uncertainties so that risks could be eliminated. For instance, a
financial institution tries to calculate risks through evaluating current trends of market
and assuming their implications would be same as they were in the past.
The measures for reducing risks can be broadly classified into two categories stated
below: Internal planning for reducing risk: Under this approach, a business organisation
attempts at reducing its risks through integrating various possible efforts without
assistance of any external source. For instance, RBS can make surety of granting loans to
only credit worthy people and it would be an example of internal planning to reduce
financial risks.
 External planning for reducing risk: Under this approach, external sources are used for
the purpose of mitigating certain risks. For instance, companies carrying audits and
investing in new technologies is an example of reducing risk factors through external
planning. Similarly, organisation investing in insurance policies to mitigate risks of loss
is a great example of external planning (Yang and et.al., 2018).
Risk communication
Communication of risks is crucial for an organisation in order to establish awareness
about risks and how these can be understand by stakeholders of a company. An organisation
follows various approaches and undertakes different means and methods for effective process of
risk management communication. In context to EE, the company make sure that its employees
are involved and are fully aware of the operations and policies of their organisation. Several
communication methods are adopted by the enterprise in order to ensure that they are informed
on several practices of the organisation. For the purpose of communicating its risks and what the
company is attempting to do to address those risks, it conducts meetings and perform face to face
briefings to make employees aware. To communicate its stakeholders about the assessed risks
and their mitigation strategies, the organisation make effective use of emails which are
forwarded from senior managers to all relevant employees. Moreover, EE's intranet site is a
effective mode of communication ensuring proper interaction and awareness among employees
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regarding updated policies and action plans for mitigating risks. Splash is the company's social
news network which is broadly accessible and available to every stakeholder of EE and it can be
used on mobile web, laptop, tablet etc. this network enables individuals to find company's latest
news as well as important messages regarding management. The network updates various
stakeholders on policy changes and initiatives undertaken by the company to combat with its
risks and threats (Rampini, Viswanathan and Vuillemey, 2021). Feedback of employees and
their viewpoints on various policies are taken care of using employee opinion surveys which is
known as Pulse. After receiving such feedbacks and views, the company is engaged in
promoting structured plans and these plans are developed on both functional as well as company
level so that continuous information is flowed between employees and company ensuring their
involvement and active engagement.
In context to AstraZeneca, the organisation is a pharmaceutical company and its
important stakeholders includes its staff, general audience, media, patients, healthcare
professionals as well as other associated organisations. For the purpose of risk management, the
organisation ensures awareness among its stakeholders on changes promoted by the organisation
to address risks and uncertainties. The company effectively indulged in communication to media
and other stakeholders regarding its vaccine development and how it is assessing the vaccination
risks with the help of high medical assistance. The company frequently update media releases on
the information regarding COVID-19 vaccines. Moreover, effectiveness in communication is
important in order to avoid any misunderstanding and misconception regarding any information.
The risk management committee of the organisation ensures proper flow of communication on
risk management practices to aware and inform its stakeholders on company's activities and
initiatives of mitigating risks. The company's annual report is a effective mode of
communication providing every important information regarding risks management and its other
aspects. It provides details on identified and assessed risks as well as initiatives of the company
on the effective strategies and changes that are to be implemented to mitigate these risks. The
annual report of the company is communicated to all important stakeholders and senior
authorities of the company in order to make them aware about the risk management.
In context to the Royal Bank of Scotland, the bank communicates with its relevant
stakeholders such as public, clients, customers, staff and other key associates regarding the
information related to the aspects of risk management. The bank conduct meetings,
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brainstorming sessions in order to inform employees and involve them in the practice of risk
management (Friday and et.al., 2018). The organisation is engaged in practices of sending e-
mails to inform employees and other stakeholders on important policies and actions adopted in
response to risk assessment. Notice boards are a important mode of effective communication
which enables the bank in informing employees and increasing awareness about existing risks of
the organisation and how employees act in accordance to mitigate such risks. The bank also
made relevant data available on its sites and intranet in order to inform stakeholders on its
present condition on what risks it is facing and how it can be mitigated. The company ensures
effective communication with its clients through prospectus and documents on the policy of
credit worthiness of customers and how it is important for customers to prove their credibility.
Conclusion
From the above report, it has been concluded that risk management is an important aspect
for organisations as businesses have to consider various risk factors and develop effective plans
to manage such risks. Through this report, risks are evaluated in context to three organisations
dealing in different sectors; telecom industry, pharmaceutical sector and financial services
respectively. It has been deduced that some risks are common in every industry such as financial
risks, reputation risks and compliance risks etc. and every organisation has to take into account
such considerations to assess and mitigate risks. In telecom sector, security risks and
technological risks are higher whereas in pharmaceutical organisations risks are higher in context
to production of medicines and their effectiveness. In banks, financial risks are more as well as
macroeconomic issues is of high significance as fluctuations in interest rates is likely to
influence operations of the organisation to a great extent. An organisation attempts at measuring
its risks through adopting different approaches and implement effective communication for
informing stakeholders about risk management practices.
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