LSBM302 - Corporate Risk Management: EE, AstraZeneca, RBS Report

This report provides an assessment of corporate risk management approaches in three distinct organizations: AstraZeneca (pharmaceuticals), EE (internet services), and Royal Bank of Scotland (banking). It identifies and analyzes the specific risks faced by each company, including business development targets, product launch delays, and price monitoring for AstraZeneca; data breaches, operational risks, financial risks, compliance risks, and strategic risks for EE; and credit risk, operational risk, and market risk for Royal Bank of Scotland. The report further explores the responses of each organization to these assessed risks, such as setting lower development targets, focusing on existing product lines, maintaining patent rights, monitoring software and hardware, providing staff training, and utilizing bank guarantees and letters of credit. The importance of timely communication of risks within the organization is also emphasized to facilitate effective mitigation strategies. Desklib offers a variety of resources, including past papers and solved assignments, to support students in their academic endeavors.

Corporate Risk
Management

Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
1.Risk Assessment and its Identification:...............................................................................2
2. Response to Assessed Risk:................................................................................................6
3.Communication of Risk:......................................................................................................8
CONCLUTION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
The corporate risk management refers various techniques used by the business concern
which are used by them so that they can reduce their losses to an acceptable level because in
business there are ups and downs as there are many events and activities which will raise the
game for an entity otherwise create hurdle for them to survive in the market. In this report
multiple organisation has been taken for different sector names as AstraZeneca which is a
pharmaceutical company, the another one is the EE which is engaged in providing internet
related services and the last one is the Royal bank Scotland which is engaged in the banking
sector based in Scotland (Brudvik, Jones, and Røsok, 2019).
For the above set of company’s this report carries out the assessment of risk they may face in
carrying out their operational activities. Further when such risk is analysed then what the
organisation do in response to such risk has been explained in this report. Risk assessment and
their response it important but the organisation must ensure that such risk should timely
addressed to the other team members of the organisation so that such could be mitigated on
timely and defined manner. As far as different companies are concerned, Astra Zeneca is a
multinational corporation which is working in pharma and biotechnology. It has its headquarters
based in Cambridge city in England.
Another financial institution is Royal Bank of Scotland which in engages in providing banking
related services such as sanctioning of loan, providing cash credit, amortization facility to
different category of investor. The last group is EE which is providing internet services which is
a British group and the important thing to note that it is a market giant in his industry stated in
the second position when market capitalisation has been considered. They started their business
in the year 2010 by establishing their set up in Hatfield, England. Their main business is to
provides 2G and 3G services to their customer which helps them to lead the market and fulfilling
the need of customer by providing them higher speed (de Waal, 2021).

MAIN BODY
1.Risk Assessment and its Identification:
The risk has been identified according to the organisation and their working style in respect to
that industry. The risk is classified according to the companies classified above: -
 Astra Zeneca: They are facing multiple kind of risk while working in their industry and
number such risk is 28 Plus and they need to manage such risk so that they can provide
assurance to their stakeholders that their funds are safe in the organisation. As far as risk
is concerned the important risk they are facing are defined below in detail: -
1. Not Capable to meet out the targets in relation to business developments:
They are not meeting the targets relating to business development on regular
course of interval as the development of pharma products are very complex and
time consuming and they fail on multiple occasions to meet out the targets related
to same. Further in pharma research and development require huge amount of
resources and funds and due to volatility in the market structure in pharma
business related to different products they face the tough competition too. The
development of the products is related to operational activity of the entity and
multiple failure at this part affect their business on multiple occasion (Evans,
Widman, and Stewart, 2020).
2. The new product and services they are launching are delayed many times:
The critical part of the pharma business is the drug they made after making so
much efforts and research and development and it is important to obtain licence
and patenting of such medicine which takes so much time to get approval from
the authority. Since they are dealing in medicine and whose patenting is difficult
therefore they are not capable enough to launch their products and services in the
market. Further the launch of the product is time consuming and if the products is
risky then it will create the risk for whole of the business.
3. Monitoring and supervision on prices:

The cost of goods and services plays the vital role for survival for any
corporation. If the cost is not control by the organisation, then their final product
will become overpriced which ultimately affect the customer base an entity holds.
Therefore, it is important for Astra Zeneca to restrict the prices of the medicines
to an acceptable level so that they can be afforded by individual and their
institutional buyers too. Further in order to reduce the prices their liquidity
position gets affected on regular course of time and it creates a liquidity risk upon
them.
 Everything everywhere: As they are engaged in internet business then it is important for
them to safeguard their data as data breech is the major risk for them and if they are not
able to provide security to them then their business gets hampered completely. Their data
is related to vast services they are offering to their customer and of the data is highly
secure which is protected and not accessible to general public. There are certain instances
that such data is leaked in public domain which will affect the financial profitability of
the entity and the trust of their customer also reduces upon them. The various risk faced
by the telecom operator has been discussed below: -
1. Risk in Operation: The risk in operations are connected with daily activities and
process the entity followed in its organisational structure. Operational risk is
related to the risk of managing the work between the team, regular supervision of
the management team and providing regular advice to them creates the risk if
such communication brakes on any level. Further the system also gets failed if
any trouble shoot problem incurred at the time of assembling of the systems
(Heath and O’Hair, 2020).
2. Finance related Risk: It simply means the inability to make payment to the
supplies and distribution which are connected for the organisation for the longer
period of time which supports them in running the business.
There are chances of frauds and errors as many organisation uses the franchise of
the entity and after taking the same they Denys to make repayment for the same.

3. Compliance Risk: This threats occurs when an organisation fails to comply with
the legal requirement relating to business and telecom sector is highly governed
with many regulations. The EE has been governed with Communication Act 2003
and their norms and regulation are very strict and if they make non-compliance
with this then they have to pay heavy penalty too. It is important for the entity to
adhere to with the legal compliance so that business function will work smoothly.
4. Strategic Risk: This threat is occurred due to impact of external factors as these
factors affect the strategic vision of the corporate. Such risk also arises when there
is shuffle in the technology which also brings difficulty for the organisation and
also involves lot of cost as to comply with new technology is not easier to come
up with.
 Royal Bank of Scotland: Banking industry has various risk specially the loan they have
sanctioned to their retail and other institutional corporate borrower clients as there are
high chances for the debts or default in payment by the customer. The NPAs are
challenging too for the banking industry but also expose to foreign exchange risk
exposure towards payment they have been made in future. Since the bank has been
working internationally across the globe therefore they facing challenges towards
international practices (Kumar, Sharma, and Cerda, 2019). Credit assessing of the
borrower and sanctioning the loan to them also creates the risk that whether the funds are
repaid back or not on the due date. The bank has carried out the risk assessment on their
operational activities which shows that bank guarantee and various letter of credit gives
them sufficient protection towards the funds they have given towards their customers.
The documents they have stored in physical form provides them additional security
towards protection of funds as such papers contains all the important documents on the
basis of which the loan has been sanction to individual and other corporate borrowers.
The risk which are faced by the Royal Bank of Scotland has been classified below after
considering the working they have made: -
1. The risk with respect of funds they have granted or sanctioned to the
individuals after analysing their repayment capacity but sometimes it happens

that borrowers unable to repay the monthly instalments and that will create
handle for bank to recover the same after providing multiple reminders to
them.
2. Operational risk is also faced by them as all the work and processes are
connected to the system and through online mode and if disruption takes place
then the whole online system gets disturbed as such damage may affect
businesses processes and their customer badly.
3. Market risk that is directly related to transaction which are exposed to foreign
exchange risk exposure. In the capital markets market risk created problems
from the banking industry the market fluctuations are mitigated to an
acceptable level and beyond that it is not controllable by the financial
institutions.
2. Response to Assessed Risk:
 Astra Zeneca:
They have response to the risk assessed is that the developments target set by the
business concern has been kept very low at the begging and focusing on the existing
product line so that existing customer will get retained. To control the risk strategy Astra
Zeneca focuses on determining the real threat that has been carried out on the working of
the business. In order to reduce the risk, they start working on to play smart and maintain
the business to an acceptable level so that operational working does not get affected (Lee
and Yamori, 2020).
Their new products have not been carried out in the market and such risk they cope up
with offering multiple varieties in the products and services. Further they are trying to
maintain and establish the patent rights so that market share gets increased and they focus
on installation of advanced that fulfil the demand of the market and they are meet out that
the revenues also get increased accordingly.
They are not capable enough to control the cost they have incurred so far in the
development of the product. However, such risk can be mitigated in level checks has

been performed from the beginning to an end starting from the operational activities so
that unnecessary cost that have been absorbed in the final price of the medicinal drug can
be curtain down accordingly. Further in order to curtain down the cost of inputs they are
workings towards different suppliers that provides them better deal with reduced prices
over the period of time (Lyu, Shen, and Yang, 2019).
 Everything Everywhere:
The risk faced by EE can be quantifies and eliminated depending upon they priority in
the activity’s they are facing in its work culture. The must ensures that their software and
hardware they are using in the business must be monitor on regular course of interval so
that damages does not take place to their resources. Every system and software needs the
regular check-up so that any deviation can be addressed accordingly so that telecom
services they are providing will not disrupt on short to short time (Narayan, Mercaldo,
and Miles, 2021).
The software problems and the risk they constitute will be addressed by appointing more
technical staff and provide them adequate training so that replacement will be available
on any time. Such industry in very challenging and continuously changing with the
advancement in the technology such as 5G evolution, Artificial intelligence and so on
shows that if EE in not updated towards the changes that are bringing on the board then
they will get out from the market easily.
They are also giving license to other operator which provide them additional revenue
along with their operational activities. The financial risk they can mitigate by receiving
the regular payment from those sources which contributes to the business without getting
any risk and helps the business to get expand in market (Saura, Oliveira, and Palacova,
2019).
 Royal Bank of Scotland:
One of the hurdle that arises at the time of initiating risk management system that an
organisation has to decide whether they should go for centralised system of processing

or not so that risk and their mitigation measures will be reduced accordingly. In banking
industry risk are voluminous and hits every part of the business and if they want to
mitigate the risk then they have to reduce the percentage of losses they are incurring
everywhere (Shitara, Iwata, and Saito, 2019).
The operational risk bank of Scotland has been facing can be reduced by implementing
Effective ORM capability that will have the full access to the risk profile and help in
building the database that provides the track relating to events that are directly related to
risk. In order to reduce the risk relating to foreign exchange transaction they can diversify
them by using their mitigation strategies such as forward cover, money market hedging,
spot market exchange etc.
These tools help the banks to mitigate the risk towards the payment they have to make or
receipt from the foreign supplier or the party from whom they have entered the contract.
The vigorous banking system are those that identify the risk in short interval of time.
3.Communication of Risk:
 Astra Zeneca:
In order to gain confidence in the business and working profile it is necessary for every
business to communicate the risk to its stakeholders and other board so that the
positioning of the business is clearly visible to them in terms of risk they are facing. If
Astra Zeneca submits report to stakeholders, then they can use such information for the
welfare of the company. Various report also includes sustainability report they need to
submit that is related with the strategy and governance that Astra Zeneca has been
followed. Further they also include the mergers and acquisitions they have taken place
during the operational year. Various strategies and working style of the company has
been highlighted so that investors and users of Astra Zeneca can have linked them as the
member of the corporate and guides the entity when they need them in difficult times
(Shu, Gainor, and Lanuti, 2020).
 Everything Everywhere:

The stakeholders of EE use the information in their way so that they can ensure that
organisation is working according to the ethics and objectives they have set in the
beginning. Communication of Risk is necessary so that performance and deviation in
working can be easily understand by the members. Such risk is communicated for that
investor get to know the risk the corporation has been facing and they can invest the
funds on it depending upon the structure of risk they are governing through. The risk they
are facing could be installation of signal network, circuits etc. which consist of higher
risk which may sometimes cause serious health implication to staff and workers
(Wilhelmsen and Ostrom, 2019).
 Royal Bank of Scotland:
It is necessary for the financial institution to communicate associated risk to the members
and owners of the bank so that it will help in developing the strong bonds between them
and such community includes employees, government, supplier, creditors etc. Not only
risk communication is important but also providing adequate security for the assets they
are utilising is vital for Royal Bank of Scotland so that they do not gets misused by
outsider attacks. Communication of risk is necessary because external shareholders will
see the performance of the bank on long term perspective.

CONCLUTION
From the above report the conclusion can be drawn that risk identification and their response
on timely manner is essential so that business risk can be mitigated on timely manner. Every
industry has some sort of risk that they have to face and they have to fight with that so that entity
operating activities does not get affected. In this report three different entities have been defined
and their associated risk has been identified. After identification of those risk factors, how these
organisations have response against those identified risk has been explained. At the end of this
report communication of those risk to respective management has been highlighted in the
detailed manner. The major issues which has been discussed in this report is the types of risk a
corporation faces in their operating business and how such risk creates hurdle for them has been
justified thoroughly. The three companies that have been discussed are Astra Zeneca which is a
pharmaceutical company, another entity is everything everywhere which is an internet service
provider and last one is Royal Bank of Scotland which is engaged in the banking sector and these
organisations risk has been explained in detail in the report mentioned above.

REFERENCES
Books and Journals
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de Waal, E.E., 2021. Arterial Stiffness, Assessed with Carotid-Femoral Pulse-Wave Velocity,
and Vasopressor Response. Journal of Cardiothoracic and Vascular Anesthesia. 35(1).
pp.81-83.
Evans, R., Widman, L., and Stewart, J.L., 2020. Gender differences in parents’ communication
with their adolescent children about sexual risk and sex-positive topics. The Journal of
Sex Research. 57(2). pp.177-188.
Heath, R.L. and O’Hair, H.D., 2020. The significance of crisis and risk communication.
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Narayan, A.K., Mercaldo, S.F., and Miles, R.C., 2021. Potential of using mammography
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the national health interview survey. Breast Cancer Research and Treatment. 186(1).
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Saura, C., Oliveira, M., and Palacova, M., 2019. Neratinib+ capecitabine versus lapatinib+
capecitabine in patients with HER2+ metastatic breast cancer previously treated with≥ 2
HER2-directed regimens: findings from the multinational, randomized, phase III NALA
trial.