LSBM302 - Corporate Risk Management: A Report on EE, AZ & RBS

This report assesses risk management approaches in EE, Astra Zeneca, and Royal Bank of Scotland, identifying corporate risks, strategies, assessment methods, responses, and communication with shareholders. It covers business, non-business, and financial risks, detailing risk assessment procedures and mitigation strategies employed by each company. The report highlights challenges such as technological advancements, competition, and regulatory impacts, examining how each organization addresses these issues through diversification, innovation, and market analysis. Furthermore, it discusses risk response frameworks, including threat responses like avoidance, transfer, reduction, and acceptance, as well as opportunity responses such as exploitation, sharing, enhancement, and rejection, providing a comprehensive overview of risk management practices in these diverse sectors.

RISK MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
the risk management of each company, based on any publicly available information...............3
organization’s main types of corporate risk, their strategy, assessment, response, and risk
communication............................................................................................................................5
Risk communication to its shareholders......................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Risk management is a procedure that helps an organization in identifying, assessing and
controlling the threats that may occur in the organization. The risk may be in form of legal
liabilities, technology issues, accidents and uncertainties.
The current report will be based on the EE, Astra Zeneca, Royal Bank of Scotland. The
EE is the network provider of the UK. It is the one of the largest telecommunication company
that provides 4G mobiles and fixed fibre broadband services. Astra Zeneca is a global
biopharmaceutical company that has focus area on the discovery of the commercialization. They
transform healthcare services to provide treatment to the change the lives of the people in terms
healthcare challenges faced by them. Their aim is to stop and cure them of the life treating
disease. The Royal Bank of Scotland it is major commercial bank that provides personal banking
services, accounts, loans and many other services. It provides the services at the low cost from its
competitors.
The report discusses the risk management of the company for working effectively and
efficiently. The type of the risk that EE, Astra Zeneca, and Royal Bank of Scotland faces are
described in this report. This report provides for the corporate risk, response and how it impact
the communication with the shareholders of the company. Further, it provides for the strategies
that can help the company in managing the risk of the company.
MAIN BODY
the risk management of each company, based on any publicly available information
A company may faces three types of the risk that are business risk, non business risk,
financial risk. Financial risk is one of the major risk that every business may face at certain point
of time (Miyai, 2020). It is the risk that involves financial loss to the company. Business risk is
defined as risk taken by the individuals in order to maximize the value of the shareholders and
profit. Non business risk is the type of the risk that are not in the control of the firm. These risk
may arise at any time during the life span of the company. For assessing the risk management the
company apply model for carefully identifying the risk (Cramer, 2019). The procedure is as
defined below:
1. identifying the hazard that affects the functioning of the company.
2. After this identify the person who may be affected by this.
3. Measure the risk and establish control measure for the risk management of the company.

4. Record every findings.
5. The last stage involves assessing the risk of the company.
The assessment procedure includes identifying the risk for creating environment that is
safe for working (Zhao, an et.al 2022). The risk assessment procedure of the EE is defined as, the
company is lacking at adopting the fast changing technological environment of the competitive
market. This risk is the type of the business risk and will harm the overall profitability of the
firm. As the company is facing huge competition from the competitors it will lead to reduction in
the profit of the company. For this the company is adopting ICT model, so they can monitor and
control the risk (Teoli, Sanvictores, and An, 2019). This is important for all the companies as
this will hinder the growth of the company. The EE is the telecommunication company so it
needs to be updated with the technological advancement of the country. For eliminating the risk
the company is providing training to its employees so that they can handle different types of the
technologies. This is the extensive risk so for handling this the company should take major
control measures so that it continue to grow and expand. After the overall procedure everything
should be recorded, for reviewing it in the future. For reducing the chances of the risk the
company should review the assessment. For managing the financial risk the company has formed
a reserve account that helps the company at the time of the financial crises.
The Astra Zeneca is the pharmaceutical company, so the risk faced by the company is
related to the business risk that involves reduced demand for prescription medicine as now
customers are avoiding to take prescription, and they are purchasing low medicines from the
market. This challenge has reduced the demand for the medicines in the market. The risk
management is required to assess the pharmaceutical frauds. So for mitigating with this the
company is required to follow certain laws that helps in preventing the frauds related to the
pharmaceutical industry at large. The Astra Zeneca is dealing with providing and discovery of
the medicines. So there may be various hazardous substances in the firm that may harm the
individual working their. For mitigating this type of the risk the company has formed various
policies related to the health and safety of the employees, for making the environment safe for
the person working there. The risk analysis has helped in assessing all the types of the risk and
prioritizing the risk that needs to be take care first. Healthcare organization are the highly risky
and complex organization that needs to manage its risk as even the small risk can lead to serious
consequences of the company. The risk can lead to reduction in the reputation of the company.

The risk factor under the healthcare organization are assessed keeping in the mind the safety of
the patient and person involved in the healthcare safety.
Risk management in the banking sector refers to the managing the potential losses in the
banking sector. Usually risk management process is applied to manage the loses and for the
protection of the value of the assets. So that it may not face the problem of liquidity. The banks
may face the risk related to the credit risk. The customer may take loans and does not repay
them, it will interrupt the cash flow of the bank and lead to liquidity problems. The Royal Bank
of Scotland is facing the market risk that refers to risk of decreasing in the value of the assets. As
the market conditions are never static and can lead to reduction in the value of the investment
that may harm the working of the organization. The risk management process for the bank is the
important process as it helps in identifying the potential risk that may harm the reputation of the
bank. The bank faces problems due to the deregulations of the certain laws that are for the
benefits of the company. After identifying the risk the company adopts procedures for mitigating
them and reducing the risk. After this bank adopts monitoring procedures that helps in taking
corrective actions for this bank has developed a software that helps in managing and assessing
risk that is ERM.
organization’s main types of corporate risk, their strategy, assessment, response, and risk
communication.
There are various types of the corporate risk that telecommunication companies interact
with that are exchange rate, increased competition, interest rate pressure, new technologies,
access to finance (de Andrade-Matos, and et. al 2022). Fluctuation in the interest rates plays an
important role in the challenging the growth of the telecommunication company. As company
has made investment in the various long and short term investment programs. As these are highly
variable and reduction in the rate of return will highly impact the profit margin of the company.
The company faces exchange rate risk as most of the company investment in the international
market and change in the rate of the currency will reduce the investment amount and increase the
cost of the expense for the company. The another challenge faced by the company is related to
the increased competition in the market. As the cost of raw material is low so the
telecommunication company becomes more attractive for the other companies. The competition
from the other companies can be reduced by securing customer of the company.

Risk management strategies helps in reducing the risk of the company (Coppersmith,
2022). For reducing the competition from the other brands the company has adopted the strategy
of diversification and product development (Brosseau, Ebrahim, and Thaker, 2019). Under this
the company is trying to introduce 5G network that are not used by any other telecommunication
company. The company is trying to diversify its business in the other countries as well. That has
enhanced the brand value of the company. This required investment in the research and
development of the company. The EE has used market research strategy for analysing and
predicting the market demand for increasing the revenue generation of the company.
The risk and challenges faced by the Anstra Zeneca, the regulation imposed by the
government has the impact on the pricing of the medicines of the company. It has lead to
reduction in the prices of the medicines that has reduced the profit margin of the company. The
technology and innovation in other companies has increased the threat for the company. The
delayed adoption of the technology in the firm has increased the risk for the company.
The risk ,management strategies helps in dealing with risk and developing the company.
The risk management strategies that adopted by the company is that it is investing more in the
technology and innovation that has helped the company in producing and manufacturing the
medicines at the low cost (Kimand et. al., 2022). The company has assessed a wide range of
competition from the competitors as due to the covid the demand for the medicines has increased
and it has made the pharmaceutical industry attractive for the other companies to invest in this
business.
There are two types of the risk that is systematic and unsystematic risk. The systematic risk is
type that affects the overall industry of the pharmaceutical firms. So this risk will have impact on
the working of the Royal Bank of Scotland.
Risk responses framework
Risk events may be classified by grouping the threats and opportunities (Micheli, Perks,
and Beverland, 2018). There are four possible ways of identifying it. It is as follow:
Threat responses
Avoid
In this framework the companies tries to make changes for achieving the objectives of the
company (Schurer, K., 2022). This help in reducing the effect of the risk and helps in responding
better towards the changes.

Transfer
This helps in transferring the risk faced by the company to the third party so, that
company is not the only one to bear the losses (Wang, Delle Monache, and Work, 2022). The
Astra Zeneca, EE, RBS has taken insurance for mitigating the losses of the company that may
occur due to some uncertainties.
Reduce
The best way of facing the problem is to reduce the chances of its occurring and reducing
its impact if it occurs (Johannes, and et.al 2022). For this the EE has reduce the chance of threat
of new entrants by adopting new innovations and increasing the customer loyalty. The Astra
Zeneca has reduced the chances of occurring of the risk by making market analysis and assessing
the probility of its occurrences. The RBS has done this by developing strategies for managing the
risk.
Accept
By accepting the threat and accepting that nothing can be done for reducing the threat the
company can reduce the times and efforts require for this process.
Opportunities
Exploit
This refers to exploiting all the options available to the company. The most common
factor available to all the companies is to explore the technological advancement related to their
company.
Share
This framework helps in sharing the opportunities with the other partners for taking the
advantages of the financial resources.
Enhance
The enhancement of the opportunities aimed at increasing at this stage and this stage has
the positive impact on the functioning of the company.
Reject
The cost of the opportunities involves large cost then it can be rejected (Zhang, and et. al
2022). The Astra Zeneca has rejected the project of making new medicines at the time of crises
in the company.

Risk communication to its shareholders
Risk communication refers to the exchange of the communication about the assessable
risk in the company among the key holders of the company (Skaug, 2022). The Astra Zeneca
provides that risk communication is important for managing the risk in the company. The
pharmaceutical company uses various tools for communicating the risk with the people such as
summary of product characteristics, patient information leaflet, package insert. Some of the
information is require managing at the internal level as these cannot be made public because this
information will lead to reduction in the brand image of the company. Every pharmaceutical
company is responsible for communicating the risk related to the company to its shareholder. As
the shareholders are the owner of the company and they have invested their money in the
company. For this the company is require to make strategy for communicating the objectives of
the company to shareholders. The company announces board meeting after analysing the risk of
the company and how they are going to deal with it. This strategy is formed by assessing the
effectiveness of the communication after monitoring the audience.
The Astra Zeneca uses various methods to communicate the risk to the shareholders
before using any strategies for taking the opinions of the shareholders. As the risk management
us not an easy process and it requires shareholders opinion along with the project manager to
manage all the risk of the company. The company involves all the team member of the project
manager team to communicate and make a plan for dealing with the risk. This has helped in
reaching the expertise (Jusup, and et. al 2022). These specialists try to provide information to
shareholders for analysing the expectations of the shareholders. For the more complex projects
the company identifies the location of the key shareholders of those, to whom company is not
able to communicate the risk of the company. The company chooses the team member of the
project manager who resides near to that shareholder. As it is recommended that the face to face
communication plays a vital role in building the stronger working relationship between the
shareholders and the company. The company is also using the facility of the virtual meeting that
helps the company in communicating the risk to the shareholder at the same time by being at
different places. For communicating the company hire the consultancy, so that company can
update about the risk to shareholders. As the large companies have large number of the
shareholders and communicating every details of the risk requires time for the process.

The risk communication with the shareholders plays a significant role in the development
of the company and for growth of the company (Cené, and Towns, 2022). As for doing any
kind of investment company requires fund and that is provided by the shareholders of the
company. The banking business involves various types of the risk and for reducing the rate of the
threat the company borrow money from the shareholders and the other sources only. The RBS
utilizes its technological cabilitries for analysing and communicating the risk with shareholders.
For this the risk assessment is required to be appropriate as the risk communication involves the
expectations of the shareholder so wrong information and assessment may lead to the heavy
losses to the company. The company uses cost risk analysis from the beginning of the project so
that it can analysis the cost associated with project, so that the time of the company is not wasted.
As the company recognises the importance of communicating the information with shareholders.
So the project manager keep a close update that the risk related information is communicating
with the shareholders or not. This can be done by regularly reporting the common issues, report
potential issues and other project related issues with the shareholders of the company who needs
the information. Robust risk analysis software is use to analysis the risk of the company and
provides every shareholder with the realisable and quantities data that shareholder wants. This
tool act as the helping hand for the company as it provides full information about the risk
involved in the business.
CONCLUSION
The report concluded that all the three companies use the technology for their expansion.
The main risk for EE, Astra Zeneca, and RBS is technological threat and competition from the
other industries. This threat is reduced by all the companies by making the market research and
prediction so that they introduced in products for the increase in the revenue of the company. All
the companies are using the technological advancement for the improvement of the performance
of the company. Further assessment of the risk is the major process that every company has to
take care as it leaving it without focusing on its implications will lead to great loss as it may lead
to liquidation of the company. The risk assessment follows a common procedure for every
company. And the information related to this is required to be provided by the manager to its
shareholders as the company is using the fund of the shareholders that has impact on the
company. The risk management is the process that identifies all the assessable problems with
company. The risk management has the positive impact on the functioning of the company as it

provides details about the probable risk in advance so that company can develop. This report has
provided about all the strategies that can be undertaken are used in the appropriate manner so
that the employees can work effectively and efficiently. The telecommunication sector requires
to follow the sector specific functions of the country. The regulation of the telecommunication
company is essential because the company deals in the technological factors of the company, that
requires to secure the data. The data is secured by adopting various security tools in the
company. It is regulated by the national government authorities. The Anstra Zeneca is regulated
by the health and safety act of the country. As the patient requires to be taken care so that they
are treated well. The banks are regulated by the banking regulation act of the company. That
helps in protecting the clients of the bank from the unfair trade practices of the persons for
harming the company. These all regulation has helped in reducing the risk of the companies and
increased the overall productivity of the company. Risk management is the essential and
important procedure that requires to be carried out from time to time.

REFERENCES
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