Risk Management Strategies

Whilst the alternative strategy is not without risk, the pre-mortem in Appendix 1 enables us to identify there numerous mitigates and controls for these. The issues and risk of new suppliers not being able to deliver on services levels and other outsourcing related risks have been studied at length, Lonsdale and Cox (1998) categorize several risks which will be overcome in the following areas;
• Experiencing a drop in service, performance levels and end-customer satisfaction levels may decline because of service delays or interruption with the partners. To mitigate this risk GI must; o Ensure high level of procurement skills are acquired to ensure the due diligence of any and all potential suppliers is completed at a high level, o Ensure
…show more content…
Including running scenarios to test and run failure mode and effects analysis.
This is critical for GI as the potential reputational risk is large concern for GI. The risk adverse nature of the group around any potential of reputational risk as a result of the TPP, would mean the complete service the partner provides needs to be at a level that will not adversely affect the reputation of the CBA group.
The pre-mortem analysis also highlights a risk of leverage by suppliers, which could bring this strategy undone. Once GI entering into an outsourcing agreement it possible that success will attract competitors to look for similar arrangements, increasing the cost of services as suppliers gain more market power. Whilst GI cannot control the external market we can minimise this risk, through; o Enter into long term contract once initial trial periods have concluded o Incentivize those who deliver superior results, whilst we risk losing good suppliers to competitor who may pay higher for the services, incentivising the supplier for work that exceeds contract requirements, an interim increase GI profitability can be financial
…show more content…
With a divisional structure, head of divisions have P&L responsibility for that line of business, because of this they will often think about what best for their division and not pass on new innovative ideas to other division, causing some divisions to lose pace.
• Divisional goals may take priority over organizational goals; teams within each division will likely focus on divisional goals instead of organisational goals,
In any organisation, regardless of organisational structure, it is difficult for general managers to know every problem and they must rely on middle managers and staff to overcome these problems themselves and this is where boundary systems play a role in ensuring the right outcome is adhered to and risk are avoided (Simons 1995). As part of the financial industry, there are a number of Boundary systems already in place due to the regulation in the industry, these boundary systems will allow for a robust change dashboard for the future changes, however in the current organisational strategy these boundary systems are well define and rigid which is impacting the ability for staff to have flexibility resulting in an impact to innovation, a core capability for the group. This is why the new belief systems are an important as part of the new organisational

Related Documents