In Chapter 15, Edmonton used the PM-squared risk scorecard process to manage risks, and that included five steps as per the textbook. To reflect on this, I bring up a recent lawsuit against Tesla, w

2 Substantive reply posts:

Post 1:

I don’t think I would have handled it differently.  Especially in light of how it so negatively impacted Toyota when they took the time to investigate, finding the claim had no merit.  The way that I would use the PM2 risk score card in relation to this crisis is to first identify the strategy or standpoint we are going to take to confront this particular situation.  Determination of this would likely be made by looking at past instances where such things have happened with other auto companies and how they had responded and what the impacts of their actions were.  This along with consultation with the automobile experts would help in the creation of the strategic objectives we want to see achieved. 

Once our strategic objectives are defined, then looking at the risk elements that exist in reference to those goals in areas like finances, reputation, and affiliates would need to be compiled by the ERM team in conjunction with the automobile experts.   After defining those risk elements we can score those elements on a scale of 1 to 5 in relation to the potential of that risk happening in conjunction with scoring each risk in association to each goal or strategic objective producing a risk matrix.  This process would then lead us in the understanding of programs we already have in place that may be affected and we would score these to see where impact could occur in relation to our goals or strategic objectives resulting in a process analysis. Then defining the links between our strategic objectives and the initiatives we want to see, we can rate these as well concerning how they correlate to determine strategic gap and risk weighting.  All of this can then be used to analyze correlation factors for determining risk indicators revealing through this analysis the probable mitigating actions that one should take in reference to where the most risk exists and should be mediated.

References:

Kolb, R. W. (2015). Implementing Enterprise Risk Management: Case Studies and Best Practices. Hoboken: Wiley.

Post 2:

Wall Tesla may have enjoyed an initial spike in stock prices due to the immediate response provided by the CEO. Complaints continue even today, with 127 consumers siding vehicles unexpectedly increasing in speed, causing crashes(Tung, 2020). Long term consequences of the Swift denial of the charges are still unestablished. Consumers expect a certain amount of trust from corporations if Tesla is found to have neglected that trust stock prices could dramatically lower and continue to decline over the long term resulting and the CEO being removed by the board of directors.

Using the PM2 risk scorecard methodology, Tesla could identify possible risk elements and score them as appropriate. By outlining and predetermining the risks associated with a swift denial as compared to a long-term investigation. The company could ascertain a coherent strategy in relation to the incidents. The risk versus reward metric could be moved dependent upon the study and research provided. Having an enterprise risk management plan or strategy for this type of incident is rare. However, the company could have ascertained that any product malfunction or behavior Should be directly and swiftly countered.

It is the author's opinion That the long term consequences associated with a lack of trust from consumers do not warrant the actions taken by Tesla. Toyota, who took a few months to investigate and correctly conclude that the claims were baseless, may have suffered a short-term financial loss but retained consumer confidence in the years to come. This is not something that Tesla will enjoy in the future, especially if it is found that there are accusations that are determined to be true. This is future plagued by the fact The Tesla year over year faces the same complaints from different consumers. It is the opinion of this author The Tesla should have taken the proper amount of time to investigate the incidents properly and determine if the complaints were valid.

Tung, L. (2020, January 20). US looks into over 100 complaints of Tesla cars suddenly accelerating and crashing. https://www.zdnet.com/article/us-looks-into-over-100-complaints-of-tesla-cars-suddenly-accelerating-and-crashing/.