Risk Management and Record Keeping Systems for Multinational Companies

This report delves into the critical aspects of risk management and record-keeping systems within multinational companies. It begins by establishing the workplace context and administrative systems, emphasizing the importance of risk management in today's business environment. The report then explores stakeholder consultation, the establishment of needs for administrative systems, and the process of obtaining and selecting suppliers. It further examines implementation strategies, the development of implementation plans, and the creation of written procedures and communication protocols. The report also covers staff training, risk management plans, and the overall significance of record-keeping in mitigating various risks, including financial, technological, and HR risks. The analysis underscores the necessity for comprehensive risk management strategies to ensure business sustainability and growth, with an emphasis on the importance of data recording and stakeholder engagement.

Running head: RISK MANAGEMENT AND RECORD KEEPING SYSTEMS
Risk Management and Record Keeping Systems
Name of the Student:
Name of the University:
Author Note:

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RISK MANAGEMENT AND RECORD KEEPING SYSTEMS
Table of Contents
Introduction:....................................................................................................................................2
Part 1. The chosen appropriate workplace context and administrative system:..............................2
Part 2. Consultation with stakeholders and establishment of need for administrative system:.......4
Part 3. Obtaining quotations from suppliers:...................................................................................5
Part 4. Appropriate method of selecting suppliers:.........................................................................6
Part 5. Consultation with staff and stakeholders to determine implementation strategies:.............6
Part 6. Development of implementation plan:.................................................................................8
Part 7. Development of written procedures for the system:............................................................8
Part 8. Development of communication to implement plan:...........................................................9
Part 9. Training and support of staff:.............................................................................................10
Part 10. Conducting training with staff:........................................................................................10
Part 11. Risk management plan:....................................................................................................11
Conclusion:....................................................................................................................................13
References:....................................................................................................................................14

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Introduction:
Risk management is one of the most important workplace contexts which multinational
companies are experiencing. The multinational companies today in order to monitor and manage
risks effectively maintain extensive recordkeeping systems. Aven (2016) define risk
management is the scientific approach of understanding the impacts which risks can have on the
business outcomes. The authors in the very introductory section introduce two main tasks of risk
management. The first approach or task consists of risk assessment and risk management. This
part of the risk management approach has been addressed by Bromiley et al.(2015). The authors
mention that multinational companies ‘address all their risks comprehensively and coherently,
instead of managing them individually.’ In other words, risks are not mutually exclusive and lead
to one another. The firms that is why execute the first approach by considering the risks in a
incoherent manner taking into account how one risk attracts the other. The second approach
which Aven (2016) mention is, conducting generic research on risk management to develop
knowledge about the concepts and theories of risk management. The aim of the assignment is to
delve into risk management from the multinational companies. The approach which the
researcher would consider to conduct the research would be a record keeping.
Part 1. The chosen appropriate workplace context and administrative system:
The appropriate workplace context and the administrative which the research would
consider would be risk management and record keeping system respectively. Gaspar et al. (2016)
mention that changes in the macroeconomic conditions result in risks which business
organizations face. The changes in macroeconomic factors like taxation rates result in increase
in the taxation rates of the companies. This increased taxation expenses eats into the net profits
which companies earn. Thus, political risks result in earning lower revenue in companies.

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Haapakoski et al. (2016) add to the discussion by mentioning that advancement in technology
and advent of new technology leaves the old technology redundant. This means that the
companies are not able to recycle the amount they invest in acquisition of the technology. Thus,
technological risks lead to revenue risks. Eccles and Krzus (2018) point out that this failure of
recycle the amounts invested and increase in expenditures in order to comply with changing
taxation policies result in multinational companies incurring huge expenses. Chen, H. and
Manso, G., 2016 et al. (2016) strengthen the discussion by pointing out that multinational
companies in order to meet these rising expenses have to earn lower amount of net profits. The
companies owing to earning lower amount of net profits are not able to give high amount of
returns on investments to shareholders. This lowering ROI results in repelling investors from
investing in the shares of the concerned companies. This results in capital risks. Safarzyńska, and
van den Bergh (2017) strengthens the context by pointing of that increase in the market
competition results in companies losing their customers to their competitors. This results in
companies earning lower amounts of revenue which means that they are generating lower net
profits as already pointed out by Gaspar et al. (2016). Thus, it can be inferred that the decreasing
revenue generation owing to increasing market competition results in revenue risks. The
combined effect of the increasing capital risks and revenue risks, both of which are interrelated
result in financial risks for the companies concerned. Han, Bonn and Cho (2016) mention that
companies in order to achieve high revenue often put intense performance targets on employees
which results in intense professional stress among the latter. This leads to lack of employee
satisfaction which in turn leads to employees resigning, thus causing HR risks. Harris and Safety
(2016) point out in their discussion one of the most significant risks which other than work
pressure, leads to high employee turnover, WHS risks. Unsafe working environment results in

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employees resigning from their jobs. Thus, it is clear from the discussion that MNCs are facing
immense amount of risks in their workplace context which necessitates their respective
management bodies maintain form strategies to manage the risks. Kshetri (2018) opines in this
respect that the management of the companies in order to take appropriate steps, have to
maintain records of the risks, their cause and their impacts. The management bodies also have to
maintain records on the strategies taken to address these risks and monitor the strategies in order
to ensure their effectiveness in mitigating or at least reducing the risks. This significance of risk
management in order to ensure sustainability and growth of businesses made recording keeping
as the one of most significant administrative functions.
Part 2. Consultation with stakeholders and establishment of need for administrative
system:
Multinational companies are required to consult with their stakeholders in order to
establish the need to maintain extensive record systems to gain the support of the latter. Laudon
and Laudon (2016) point out in this respect that maintaining records of the risks in order to
achieve high level of risks management operations require companies to maintain several
records. For example, in order to maintain records about financial risks, the companies maintain
detailed financial records including profits and loss accounts. Hess and Cottrell Jr. (2016)
points out one of the most critical risk multinational companies are braving, risks of fraudulent
activities among employees. Laudon and Laudon (2016) can be iterated in this matter that
companies in order to monitor their employees to ensure to control frauds have to develop an
immense management information system. Similarly, in order to manage HR risks, the
companies have to maintain extensive employee records. Liao (2019) points out that
maintaining of these records have to involve different departments. For example, the

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responsibility of financial records lie with the finance department while maintenance of
employee records are done by the HR department. Further, the companies have to invest in
knowledge management system and cloud computing to ensure interdepartmental
implementation of the data available on the records. Thus, it transpires efficient management of
records require immense investment by companies. This necessitates the management bodies of
the companies to consult with their stakeholders in order to gain approval of the latter. Laumer,
Maier and Weitzel (2017) point out that the size of record systems and the numbers of users
depend on market size of the business companies concerned. For example, multinational
companies dealing in one single industry have smaller numbers of stakeholders or users of their
record systems. Business conglomerates on the other hands operate in several industries, thus
being subjected to larger numbers of stakeholders. Similarly, multinational companies have to
ensure that their record systems complies with the laws of both home and host countries. For
example, as far as WHS risk management is concerned, the foreign companies operating in
Australia have to ensure compliance with Work Health and Safety Act 2011
(Legislation.act.gov.au. 2019). Similarly, as already shown above, the record systems used in
MNCs are used by multiple users which they have to easy to use. Thus, it transpires from the
discussion that the management of the companies in order to implement the record systems
attributed with capabilities to meet their immense business requirements, have to mobilize
immense amount of capital towards acquisition of record systems. Thus, they require to consult
the stakeholders like management and investors prior to implementing the measures. mk mvmjn
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Part 3. Obtaining quotations from suppliers:
Multinational companies in order to acquire their respective record systems to enhance
their risk management need to obtain quotations from several suppliers. For example, in order to
enhance financial risk management, the companies need to obtain quotes from different financial
accounting software suppliers. It has been shown in the quotation chart attached, the company
has attached from four different suppliers. The computer/ software supplier (A), (B), (C) and (D)
have cited $ 20000, $ 22000, $ 24200 and $ 26620 respectively. It has also been assumed that the
quotes provide by each supplier would increase by 10 percent. The management of the
multinational companies would compare between the quotes received from the suppliers. It
appears that apparently, the computer/ software supplier has quoted the most acceptable rate.
Part 4. Appropriate method of selecting suppliers:
The appropriate method to select the suppliers should combine both quantitative and
qualitative aspects. For example, equipment supplier A has quoted $100000 whereas B $
110000. Equipment supplier D has quoted the highest figure of $ 133100 among all the four
suppliers selected. Apparently, the most acceptable quote in this case is $ 100000 quoted by A.
However, it is proved that A, B and C are involved in illegal activities, the quotation provided by
D would be accepted. Thus, it can pointed out from this discussion that the multinational
companies have to take into consideration ethical and legal compliance of their suppliers as well
before accepting the quotes.
Part 5. Consultation with staff and stakeholders to determine implementation strategies:
The management of the multinational companies should consult with the stakeholders
including the staff members in order to determine the implementation of the risk management
strategies record keeping systems. The management bodies should take into account the several

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strategies in order to commence with the strategy. They should consult with the external
consultants like financial experts and technical experts. T Iglesias and Garrote (2015) point out
that implementation of risk management strategies require the operational methods undergo
massive changes. For example, in order to exercise more control on the employee
communication, the management bodies of the companies may implement the mandate which
would require employees communicate and exchange business data on the respective email ids
only. Measures like these may create insecurity among the employees. Thus, management bodies
of companies would require to implement change management strategies. Similarly,
implementation of the new record systems would require employees to participate more
proactively in maintaining records. The management bodies of the companies would also be
required to implement piloting strategies to initiate more advanced record systems in the
companies to report risks. The strategies would be communicated with the stakeholders like
investors and employees by holding meetings. The minutes of the meetings are communicated on
official emails of stakeholders.

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Part 6. Development of implementation plan:
Implementation of record
system to manage
business risks
Management of MNCs
hold meetings with
the managers to
identify the risks
The departmental
heads identify the
issue and proposes
the project to be
undertaken along
with the budget
Management
approves the project
proposal and
approves allocation of
finance. Finance
department release
funds
MNCs hire
consultants to
conduct market
research
Consultants form the
market research plan,
risks management
report and budget and
submits to the
management of MNCs
for approval
Plan approved
Market research to
identify risks (PESTEL)
Political and legal
analysis of the
market of Australia
Economic
analysis(including
interview of
suppliers)
Social
analysis(including
Interview of
customers)
Technological
analysis
Environmental
analysis
Preparation of the
risk management
report by the
consultancy firm
Presentation of the
market research
report before the
management of the
MNC
Management of
MNCs reviews the
report
Acquisition of record
systems
Forms strategies on
record systems
aqcuisititions
Invites quotes from
suppliers of
resources (see
quotes)
Receives quotes
from suppliers
Management of MNCs
holds meeting to
select suppliers
Enters in
procurement
policies with
suppliers of
different record
systems (like
financial record
systems and IT
record systems)
Acquires record
systems
Implements risk
management
strategies based on
the record system
Monitor the outcome
of the strategies
Further amendment
in startegy and
implementation
Part 7. Development of written procedures for the system:
The MNCs adopting the risk management plan based on the record system should
develop written procedures for using the system. The procedure should contain clear and

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definitive guidelines which the employees have to follow to use the system. The following are
the procedures which the management of MNCs can implement:
1. All the employees below the levels of assistant managers would require approval of reporting
managers in order to gain access to the record system.
2. Adding, changing or deleting data from the record systems are subject to approval of the
management.
3. All communication should be done on the email allotted to each employee.
4. Any business requirement necessitating sharing of business data would require managerial
approvals.
5. If reporting managers are not available at any point of time, the skip managers should be
approached (Alternative procedure).
6. All telecommunication calls would be recorded and may be used for future references, if
required.
Part 8. Development of communication to implement plan:
The MNCs should develop a communication system to support the implementation plan.
All the steps of the implementation plan should be communicated to the stakeholders like
management bodies and employees. The communication should be strictly administered by the
management as per the procedures mentioned above to ensure authenticity.

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Part 9. Training and support of staff:
A training manual should be developed to train and support the staff. The HR department
in association with the other department should prepare a training manual which would be
provided to the trainees.
Part 10. Conducting training with staff:
A short introductory training should be conducted with the staff to introduce them to the
new administrative systems. The training should last of 10 minutes.

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Part 11. Risk management plan: