Risk Management Case Study: Alstom

Task 1

Part A:

Risk is an uncertain event that should it occurs will have an effect on achievement of objectives. Risk has always been an inherent feature in any business therefore risk management is a basic concept for successful businesses. A business cannot thrive without taking some risk. Those organizations that are more risk aware appreciate that actively managing not only potential risks but also potential opportunities provides them with an edge over their competitors. Taking and managing risk is the very vital for business continued existence and growth. A large company like Alstom can benefit from effective risk management as it will lead to:

• Fewer sudden shocks and unwelcome surprises- Alstom will be ready for any situation beforehand.

They may come about because of strikes and lock-outs by profession unions; carelessness of a representative; mischances or passing’s in the business; ineptitude of the director, and so on. For Alstom it is not a genuine hazard as the vast majority of its operations are mechanized.

• Technological risk are the unforeseen changes in the methods of creation or circulation. They may bring about mechanical outdated nature and different business dangers. Alstom utilizes new engineering and rate of progress in innovation in this industry is not quick so it is not an extreme danger.

• Physical risk are the dangers which bring about misfortune or harm to the property of the business. They incorporate the harm and disappointment of hardware and supplies utilized as a part of business e.g fire, terrorism assault. Alstom works in track segment and therefore physical danger is high and can upset its taking a shot at a substantial

Similarly storms can damage body of train.

• Fire – Fire has a potential to physically destroy a Alstom business and property.

• Power cut - loss of power could have serious consequences. Alstom uses pre-programmed management center computers for signaling so a power failure can disrupt the business.

• IT system failure - computer viruses, attacks by hackers or system failures could affect Alstom ability to function.

• Terrorist attack – Terrorist attack are a major sort of crisis that can occur . Alstom’s assets can be destroyed completely and it would adversely affect its business in short as well as long term.

• Crises affecting your business ' reputation – Alstom business will suffer a blow if its reputation is affected. Alstom is a leader in the industry and reputation is of prime importance.

Other businesses depending on their particular nature face different crisis. These might include theft and vandalism, loss or illness of key staff, outbreak of disease and infection, crisis affecting their suppliers or