Essays on Managing Strategic Risk Case Study

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The paper "Managing Strategic Risk " Is a perfect example of a Management Case Study. The case study involves Formaldehyde Chemical Company whose main process entails producing Formaldehyde that is supplied to several industrial customers in UK and Europe. Formaldehyde (CH2O) is an organic compound and is the simplest of aldehydes. Normally it is a gas at room temperature. Formaldehyde is a colorless gas and has a pungent, irritating smell. It is used as a precursor to several materials and chemical compounds (Robert, 2005). The company is located outside the Industrial Centre of the City and is relatively close to three housing estates and a small village, with about 3000 people.

A tributary to the River Ure passes directly alongside your company boundary and the river is a habitat for salmon and other wildlife species. Formaldehyde is the most important and profitable part of the company. Some local community members would like the site should be relocated due to a leak that occurred three years ago from the storage bund. The local authority would prefer the site relocating. This report seeks to carry out strategic risk management of Formaldehyde Chemical Company. Risk assessment to ascertain the risk to your business from the on-site process and transportation off-site of formaldehyde Storage risk The gas in the storage tanks may leak which might end up being released in the environment.

The business premise is near a river which is a successful habitat for salmon and other wildlife species. Therefore, this poses an environmental risk to the species habiting in the river because formaldehyde is hazardous due to its mobility, and endurance, aquatic toxicity as well as toxicity to vertebrates.

The probability of formaldehyde leaking increases this risk. However, since the leak has occurred just once in a period of 40 years, this shows that the risk of formaldehyde leak to the environment is low. Additionally, if there are effective mechanisms to control the diffusion of formaldehyde to the environment the risk is relatively low (Damodaran, 2008). Likelihood scoring scale Level 2 Descriptor Medium-low Comment There is a relatively low likelihood of formaldehyde leaking into the river although the location of the business premise near the river relatively increases the environmental risk (Paul, 2012) Process risk The technology used in the manufacturing of formaldehyde may at one time go be erroneous or a technological change may occur which might render the current technology redundant.

Additionally, workers working in the company exposed to a probability of airborne exposure to formaldehyde. Within the workplace, formaldehyde exposure can take place through a gaseous form where the respiratory tract absorbs it and can also be absorbed through skin contact. The health effects resulting from formaldehyde exposure vary with the route of exposure and the absorbed concentration. Moreover, the preparations used in manufacturing formaldehyde if swallowed can be harmful and irritating to the eyes.

However, since there is good ventilation, respiratory protection, and all workers use respirators, the likelihood of the risk occurring is low (Lynn, 2004). Likelihood scoring scale Level 1 Descriptor Low Comment The business has set the required protective measures against formaldehyde exposure and thus the likelihood of the risk occurring is low (Paul, 2012) Transportation Formaldehyde is highly flammable especially if exposed to open flames, sparks, static discharge, heat, in addition to other ignition sources. This exposure can occur during transportation. In addition, formaldehyde can explode if exposed to high temperatures.

For example, in the area where the temperature is 180 C, there is an explosive reaction with nitrogen dioxide which is readily available in the air. With high temperatures, there can also be explosion hazards indoors and runoff of the gas to the sewer can result to fire breakout or explosion hazard (Damodaran, 2008).

Bibliography

Anderson, T., 2006, Perspectives on Strategic Risk Management, Copenhagen, Copenhagen Business School Press DK.

Alexander, C., 2005, The Professional Risk Managers' Handbook: A Comprehensive Guide to Current Theory and Best Practices, London: PRMIA Publications.

Damodaran, A., 2008, Strategic Risk Taking: A Framework for Risk Management, Melbourne: Pearson Prentice Hall.

Edward, B., 2005, Risk, Crisis and Security Management. New York: Wiley

Harris, E., 2012, Strategic Project Risk Appraisal and Management, Leicester: Gower Publishing, Ltd.

Lynn, A., 2004, An Assessment of Texas State Government: Implementation of Enterprise Risk Management, Applied Research Project. Texas: Texas State University.

Mark, S., 2007, Introduction to Risk Management and Insurance (9 ed.), Englewood Cliffs, N.J: Prentice Hall.

Martin, G., 2008, Risk Management Systems: Technology Trends (Finance and Capital Markets), Basingstoke: Palgrave Macmillan.

Paul, K., 2012, Fundamentals of Risk Management 2nd Ed., New Jersey: Kogan-Page.

Robert, C., 2005, CRC Handbook of Chemistry and Physics, Boca Raton, FL: CRC Press.

Schroder, W., 2012, Strategic Risk Management Practice: How to Deal Effectively with Major Corporate Exposures, Cambridge: Cambridge University Press.

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