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Case Study in General
Numerous individuals are worried about the likelihood of a public health crisis, for example, a regular fiasco, demonstration of terrorism, or infection outbreak. Disaster administration (or crisis administration) is the term used to designate the exertions of groups or organizations to anticipate and arrange all staff and materials needed to either relieve the impacts of, or recuperate from, characteristic or man-made catastrophes, or demonstrations of terrorism. If conceivable, crisis planning ought to keep crises from happening, and it ought to create a great activity plan to alleviate the outcomes and impacts of any crises (FEMA Working Group, 2007). Over the long haul, as more information gets accessible, usually through the investigation of crises as they happen, an arrangement ought to evolve. The United Countries characterizes a debacle as a genuine disturbance of the working of a group or a social order. Debacles include widespread human, material, investment or ecological effects, which surpass the capacity of the affected community or society to adapt to utilizing its assets. (FEMA Working Group, 2007).
1. Address the Comprehensive Emergency Management concerns
The National Representative’s Affiliation composed a period of debacle model to help crisis directors plan for and react to a catastrophe, otherwise called the ‘life cycle’ of thorough crisis administration. The four periods of calamity are preparedness, mitigation, response; and recovery (FEMA EMI, 2009).
The shared characteristics around different varieties of technological and natural catastrophes recommend that a significant number of the same administration techniques can apply to all such crises. An all-hazards methodology to crisis preparedness supports viable and predictable reaction to any debacle or crisis, paying little heed to the cause. emergency Administrators will coordinate the advancement of a danger based, all risks method that fabricates those basic proficiencies important to get ready for, react to, recuperate from, and keep or decrease misfortunes coming about because of natural and human borne crises (FEMA EMI, 2009).
Preparedness includes steps to diminish defenselessness to debacle effects, for example, damages and misfortune of life and property. This may include changes in nearby building regulations to sustain structures; changed zoning and area use administration; fortifying of open framework; and different exertions to make the group more flexible to a disastrous occasion(FEMA Working Group, 2007). Activities involve;
- Includes plans or arrangements made to spare lives and to help reaction and salvage operations.
- Evacuation plans and stocking nourishment and water are both cases of readiness.
- Preparedness exercises occur before a crisis happens.
Readiness monitors seeing how a catastrophe may affect the group and how training, effort and preparing can manufacture ability to react to and recuperate from a calamity. This may incorporate captivating the business group, pre-disaster key arranging, and other logistical status exercises. The debacle readiness exercises aide gives more data on the best way to better set up an association and the business group for a catastrophe (FEMA Working Group, 2007).These includes:
- Includes any exercises that prevent a crisis, diminish the shot of a crisis happening, or lessen the harming impacts of unavoidable crises.
- Buying surge and flame protection for your house is a relief action.
- mitigation exercises happen prior and then afterward emergencies
Reaction addresses quick dangers displayed by the fiasco, including sparing lives, helping (sustenance, safe house, garments, open wellbeing and security), cleanup, harm evaluation, and the assessment of asset appropriation. As the reaction period advances, center shifts from managing quick crisis issues to directing repairs, restoring utilities, creating operations for open administrations, and completing the cleanup process (FEMA Working Group, 2007). Activities include;
- Includes moves made to spare lives and avoid further property harm in a crisis circumstance. Reaction is putting your readiness plans without hesitation.
- Seeking sanctuary from a tornado or turning off gas valves in a tremor are both reaction exercises.
- Response exercises happen throughout a catastrophe.
Recuperation is the fourth period of calamity and is the rebuilding of all parts of the fiasco’s effect on a group and the reappearance of the nearby economy to some feeling of regularity. By now, the affected area has accomplished a level of physical, natural, monetary and social strength. The recuperation period of calamity could be broken into two periods. The transient stage commonly keeps going from six months to no less than one year and includes conveying prompt administrations to organizations. The long haul stage, which can extend up to decades, requires keen vital arranging and movement to address more genuine or lasting effects of a fiasco (FEMA EMI, 2009). Activities entail;
- Includes moves made to come back to an ordinary or a much more secure circumstance emulating a crisis.
- Recovery incorporates getting money related aid to help pay for the repairs.
- recovery exercises occur after a castrophy
2. Address the Concerns Regarding Communication
Communications are likewise a fundamental variable in accomplishing precision, great timing, and right gauging of an occasion’s extent. There are a few paramount parts of correspondences. One is the specialized capacity to convey rapidly and proficiently. This means having designated phone, radio, telex, and other electronic systems accessible, on perfect frequencies, and with reinforcement frameworks if there should arise an occurrence of disappointment of the essential framework. Capability to convey over a wide and broad range is likewise essential. An alternate significant part of correspondences is brief, well-disposed relations with the media, all of which could be of huge administration in times of crisis (FEMA Working Group, 2007).
Media (electronic and print) are extremely useful in a debacle administration related correspondences. They serve as extremely functional course between the individuals and the catastrophe administration faculty.At the point when power is off, telephones go out and the web is down, when police, blaze, and doctor’s facility administrations are overpowered, novice radio specialists are there to consume the slack as crisis communications volunteers. They have, actually, been there in for all calamities in late memory, Typhoons, blazes, ice storms, quakes, surges etc. (FEMA EMI, 2009).
3. Address the Management, Leadership, and Decision-Making
The increment of recurrence and extent of regular and human-made fiascos throughout a decade ago made it clear that conventional crisis, emergency, and catastrophe administration instruments have ended up being ineffectual. In this respect, accepted methodologies portrayed by progressive system and centralization have been supplanted by decentralized crisis administration frameworks (FEMA EMI, 2009). This change was particularly encouraged by the need to work together throughout reaction to and recuperation from compelling occasions and disastrous calamities. Collective crisis administration, which centers on the requisition of arranged coordination (Kapucu & Garayev, 2011).
There, is coordinated effort and organizations in emergency, fiasco, and crisis settings underlining decentralized and adaptable structure alongside significant managerial and administration conveyance changes, presents to its own particular notable issues to the table. One of such issues is synergistic choice making (FEMA EMI, 2009). The key components of superb reaction in such circumstances is having a pioneer who can lead and to settle on informed, reasoned choices in a group environment is indispensable to the achievement of any endeavor in emergency management (Kapucu & Garayev, 2011). Decisions need to be made with the understanding of their extreme consequesces. With lives and property at stake, it is basic for crisis managers to proficiently team up with, and direct the deliberations of others.
As per the reading by Kapucu & Garayev (2011), Authority is characterized as capacity to impact or inspire an assembly or group towards accomplishment of certain goals. During calamity, a significant number of the relatives and companions of the pioneers could be influenced. Their consideration could be occupied to them as opposed to making choice or move for easing and recuperation of the group.In an area, the locale judge or region authority is director of the fiasco help trustees. The officers’ fundamental point is to mount successful salvage operations for the influenced individuals, give quick alleviation regarding nourishment, drug, drinking water, apparel and provisional shelter.State and national level administration will attempt to give funds and mobilize relief inside the accessible assets (Barbara et al, 2005).However, this initiative activity from top will be dependent on general energy about the calamity circumstance. For the state and national level initiative to be powerful they ought to have correct and up and coming data from the debacle zone through the area authority and leave itemized usage to the locally created managerial framework. For example in the Macondo debacle, the first rule of BP’s working administration framework (OMS) is leadership. The Head counsel’s group watched clash between directors and disarray about who was responsible for basic decisions (Barbara et al, 2005). The team answerable for key choices at Macondo did not appear, by all accounts, to be acting with a predictable and imparted reason.
Calamities include far reaching human, material, monetary or natural effects, which surpass the capability of the affected group or social order to adapt utilizing its own particular assets (FEMA Working Group, 2007). The Red Cross and Red Crescent social orders characterize debacle administration as the association and administration of assets and obligations regarding managing all humane parts of crises, specifically readiness, reaction and recuperation keeping in mind the end goal to diminish the effect of calamities. For example, the administration breakdown at Macondo disaster influenced a large portion of the operational parts of outlining and boring the well (Etkin, 2006). The chief counsel’s groupobserved the accompanying administration disappointments: (1) incapable authority at discriminating times; (2) inadequate correspondence and siloing of data; (3) failure to give convenient methodology; (4) poor training and supervision of workers; (5) ineffectual administration and oversight of contractors; (6) deficient utilization of technology; and (7) disappointment to suitably dissect and acknowledge hazard(Etkin, 2006). Eventually, the organizations put undue dependence on auspicious mediation and human judgment in light of their disappointment to give people the data, apparatuses, and training needed to be successful (FEMA Working Group, 2007).
4. Address the Needed Technical Skills for Tackling the Issues
Barbra et al. (2005) portray competency as a “particular proficiencies needed for viable execution, inside the connection of a job’s obligations, which attains the objectives of the organization”(p. 3). Coordination among emergency managers and the whole community and all stakeholders at all levels is essential to effective emergency management. Mass content informing administrations, for example, Twitter, Facebook, mass robotized dialing administrations, for example, Invert 911, and normal siren frameworks that are utilized to caution for tornadoes, wave, air-assault, and so on(Etkin, 2006). Telematics, GIS mapping, GPS and cell correspondences are assuming an expanding part in managing groups, following advancement and allocating laborers in the result of snow squalls, electrical storms, surges, high temperature waves and occasions where the wellbeing of residents is a significant concern. These innovations recently are continuously utilized broadly within associations with substantial armadas and field administration associations to run regular operations. Notwithstanding they are likewise assuming a part in storm harm evaluation and cleanup. Different offices and associations have been turning to these innovations to enhance catastrophe reaction. Red Cross employees, case in point, use handheld gadgets to evaluate harm in the result of characteristic calamities (FEMA Working Group, 2007). While previously, the Red Cross staff might hurry to the scene with clipboards under control to do their evaluations, now they utilize tough nomad handhelds to transfer data instantly to investigators at Red Cross home office.
On the off chance that these fail, mobile advances, for example, mobile phones and content informing would be used (FEMA Working Group, 2007). For illustration, the Kashmir seismic tremor in 2005 uncovered the impediments as far as access to destinations and auspicious reaction that are apparent when catastrophe strikes in remote areas far from infrastructure.
5. Address the Political and Legal Contexts
As stated by Waugh, disaster administration happens inside a legitimate and additionally political setting. It is vital that the debacle directors be acquainted with the legitimate structure controlling calamity preparedness, administration, and moderation. The anticipation and administration of catastrophes needs a multifaceted methodology (Waugh n.d). This is on the grounds that there are diverse agencies included in the fiasco reaction deliberations. In this way, there ought to be legitimate coordination between the different stakeholders included in the response effort (Moynihan, 2008). It is intriguing to see that the crazy province authorities have no clue about the legitimate structure controlling crisis reaction deliberations (case study n.d). This implies that they can’t start the important lawful procedure to look for help should the need emerge.
McEntire and Dawson (2007, p.58) state that to comprehend disaster administration in the US, one need to recollect that the nation has a federalist constitution, which impacts the way the elected and state governments react to disaster. Due to contrasts in the local and federal government methodologies to crisis administration, this can result in the calamity administration exertion to be unfocused (Mcentire and Dawson 2007, p. 60). The vicinity of shifted disaster administration associations and agencies is because of the decentralized nature of the US government (Mcentire and Dawson 2007, p. 59). The associations and agencies have distinctive commands and work utilizing diverse lawful systems. This can result in an overlap in the work done by the bodies (Mcentire and Dawson 2007, p. 60). Once in a while, the federal prerequisites for offering aid clash with local necessities. Accordingly, states may not request elected support actually when it is vital, particularly if the federal prerequisites are politically disliked (Mcentire and Dawson 2007, p. 65).
After disasters happen, there is a state of tumult as reaction deliberations arrive. This can result in part duplication and a scattered reaction exertion (Buck et al., 2006). Buck et al. (2006) suggest the utilization of an episode summon framework (ICS) as a catastrophe administration device. ICS utilizes levelheaded bureaucratic standards to guide the calamity administration deliberations (Buck et al., 2006). The framework gives a structure of standards and works on administering the movements of the numerous offices and associations reacting to a calamity (Buck et al., 2006). The ICS tries to bring request to an overall turbulent post-disaster environment (Buck et al., 2006). The ICS likewise encourages the division of work and coordination between the different debacle relief exertions (Buck et al., 2006). Directors must have sufficient lawful knowledge in the event that they are to figure the ICS (Buck et al., 2006). Earlier arranging can help in distinguishing the organizations that can fit inside the state legitimate administration and the similarity with national jurisdiction (Buck et al., 2006).
The political setting has a telling impact on disaster preparedness reaction and alleviation (Wilson et al., 2007). Catastrophe supervisors must be prepared for the political actuality that shapes pioneers’ choices (Wilson et al., 2007). The political pioneers bargain with an extensive variety of dangers and the choices they make are reliant on the predominating political substances (Moynihan 2008). There is likewise a change in general society segment as government outsources a large portion of its capacities to the private sector (Waugh n.d). The terrorist occurrences have likewise changed government mentality to that of suspicion towards the general population. Along these lines, acquiring the important data that is vital for actualizing certain choices might be troublesome. Crisis administrators likewise need to be mindful that legislature authorities, and in addition the private sector, is prone to be antagonistic to any disaster readiness, reaction or relief activities that they observe are liable to block development (Waugh n.d).
Disaster administrators must strike a barely recognizable difference on the off chance that they are to arrange successful reaction endeavors (Waugh n.d). The effective debacle manager must have the capacity to explore the lawful and political hindrances to convey the obliged help to the individuals who need it (Mcentire & Dawson, 2007, p.60).
6. Address the social and Ethical Contexts
Hoffman (2009) states that vulnerable groups are regularly ignored throughout and after disasters. Vulnerable groups, which incorporate the monetarily hindered, appear to endure the most throughout calamities (Hoffman, 2009). This is on account of they don’t have the emotional, fiscal, and social assets that can help to relieve that catastrophe (Hoffman, 2009). Disaster administrators ought to have a rundown of such burdened persons with the goal that they can accept the fundamental backing throughout a calamity (Hoffman, 2009). A large portion of the monetarily impeded persons tend to be from ethnic minorities who are isolated from social order (Hoffman, 2009). Subsequently, throughout calamities, they may not accept help from the ethnic dominant places. These individuals can’t manage on their own, thus the need for the disaster director to provide for them unique thought (Hoffman, 2009).
If the suitable ethical viewpoint is connected to circumstances, then, the result that gives the greatest good to the biggest number of individuals is the best. At the point when disaster happens, there are numerous contending investments for the pitiful assets (Hoffman, 2009). Disaster supervisors need to settle on choices on the best use of the accessible assets. Supervisors ought to pick a game plan that guarantees the insurance of the life of the biggest number of individuals (Hoffman, 2009).
The coordination of disaster reaction, administration, and mitigation exertions happens inside the social circle. Powerful disaster administration is reliant on how data is produced in three essential stages – the Distinguishment stage, the evaluation and portion stage, and the criticism and assessment stage (Sobel & Leeson, 2007). The data required to oversee calamities could be found inside the social order (Sobel & Leeson, 2007). Nonetheless, this data is unique and is held by diverse persons (Sobel & Leeson, 2007). The undertaking of the catastrophe supervisor is to guarantee that precise data is accessible for guaranteeing that catastrophes don’t get out of hand (Sobel & Leeson, 2007). Successful disaster administration is dependent on the data acquired in each of the three stages Sobel & Leeson, 2007).
All persons have the right to a reasonable treatment and a powerful legitimate solution to guarantee the insurance, regard and happiness regarding their rights concerning the anticipation measures arranged or if the powers neglect to act to embrace aversion and fiasco hazard decrease measures and to organize relief (Etkin, 2006).All persons should receive prompt help in the occasion of a regular or innovative calamity, including the benefit of essential wellbeing administrations. Compassionate help is given reasonably, fairly and without segregation, indicating due respect for the helplessness of victimized people and for people’s and assemblies’ particular needs (FEMA EMI, 2009). This humane help meets the needs of the populaces concerned, as per worldwide models and the best existing practices.
In conclusion, extensive crisis administration marshals all the assets accessible to meet all potential crises under composed administration (FEMA EMI, 2009). CEM empowers a state to reach its obligation in crises and calamities by facilitating open and private projects to readiness and reaction to debacles, as well as for relief of their results and increasing recuperation from them. CEM encourages a federal state-neighborhood working association.
FEMA Working Group. (2007). Principles of Emergency Management. Retrieved from http://training.fema.gov/EMIWeb/IS/IS230/Principles%20of%20EM.pdf
FEMA Emergency Management Institute (EMI), (2009). The College List. Retrieved from http://training.fema.gov/EMIWeb/edu/collegelist
Barbara, J. A., Macintyre, A. G., Shaw, G., Seefried, V., Waterman, L., & deCosmos, S. (2005). VHA–EMA Emergency Response and Recovery Competencies Survey, Analysis, and Report. Retrieved from http://training.fema.gov/EMIWeb/edu/EMCompetencies.asp
Kapucu, N. &Garayev, V. (2011). Collaborative Decision Making in Emergency and Disaster Management. International Journal of Public Administration, 34,366-375. Retrieved from http://sangyubr.files.wordpress.com/2012/02/collaborative-decision-making-in-emergency-and-disaster-management.pdf
Etkin, D. (2006, September). Emergency Management Core Competencies. Retrieved from http://training.fema.gov/EMIWeb/edu/EMCompetencies.asp
Buck, D., Trainor, J. & Aguirre, B. (2006). A Critical Evaluation of the Incident Command System and NIMS. Journal of Homeland Security and Emergency Management, 3(3), 1-27.
Hoffman, S. (2009). Preparing for Disaster: Protecting the Most Vulnerable in Emergencies. University of California, Davis, 42(1491),1491-1547.
McEntire, E. & Dawson, G. (1991). The Intergovernmental Context. In Emergency Management: Principles and practice for local government.(Eds). New York: ICMA Press.
Moynihan, P. (2008). The Response to Hurricane Katrina. International Risk Governance Council. Retrieved from: http://irgc.org/wp-content/uploads/2012/04/Hurricane_Katrina_full_case_study_web.pdf
Sobel, R. & Leeson, P. (2007). The Use of Knowledge in Natural-disaster Relief Management. The Independent Review, 11(3), 519-532.
William L. Waugh, W. (n.d). Public Administration, Emergency Management, and Disaster Policy.
Case Study: Fleyton Electronics: Risk Management Plan for Customers’ Credit Card Data Leaks Prevention Project
Fleyton Electronics: Risk Management Plan for Customers’ Credit Card Data Leaks Prevention Project
This document is a risk management plan for customers’ credit card data leaks at Fleyton Electronics. It defines the risks and the risk management process to be employed by the firm in protecting customer credit card data from leaking at points of sale and in mitigating negative effects of such leaks. The CIO is responsible for reviewing and maintaining the risk management plan to ensure that the risk process remains appropriate to deal with customers’ credit card data leaks. The risk management plan of the Fleyton Electronics will involve the scope and objectives of the risk management process, risk tools and techniques, and the implementation review and control of the risks involved (McNeil, Frey & Embrechts, 2010). Therefore, the risk management plan directs Fleyton Electronics on the evaluation and control of the company’s risks.
Project Description and Objectives
The Union Century Bank established that customers’ credit card information was leaking at Fleytons Electronics Stores. This was through their regular examination of patterns in fraudulent accounts where they found above-average number of bad cards having been used in our stores. This information was shared with the management of Fleytons Electronic Stores who initiated this risk management plan for the firm.
The scope and objectives of the risk management plan for Customers Credit Card Data Leaks Project are as follows;
- To protect customers’ credit card data from leaking to unauthorized individuals
- To create awareness of the risk of customers’ credit cards data leaks throughout the organization and develop an approach to its prevention, detection, and mitigation.
- To identify, measure, control, report and review any business risk that might result from customer credit card data leaks at the firms’ points of sale, whether out of negligence, or otherwise.
- Develop a response mechanism to customer credit card data leaks at the organization’s points of sale, both towards solving the data leak itself and communications to the customers, public, and law enforcers.
- Allocate optimal organizational resources towards the mitigation and prevention of the customer credit card data leak risks.
- To reduce lawsuits and other liabilities that might arise from credit card data leaks at Fleyton electronics stores’ points of sale.
- To clearly assign the responsibility of specific risk management areas to specific officers of the firm.
- To work with other stakeholders in the credit card payments industry in the development and application of industry standards developed
Risk Tools and Techniques
The following tools and techniques will be used in the risk management process of the Customer’ Credit Card Data Leak Prevention Project.
- Risk Identification-this is the understanding of a potential occurrences in the leak of credit card data that might positively or negatively harm the operations of the Fleyton Electronics. Identification of the risks using the following techniques;
- Review of records, checklists, and other available literature
- Brainstorming by all members of Fleytons Electronics involved in security matters and the senior management.
- Developing and analyzing assumptions that are to be followed in the project
- Use diagrams to depict relationships between variables involved.
- Creation of a risk register to record identified risks
- Risk Assessment
Customer credit card data leak risk threshold shall be measured by the:
- Proportion of customer credit data leaked to the whole population of customers who use their credit cards at the Fleyton Electronics point of sales as shown below.
- The vulnerability of the firm’s infrastructure in cases of hacking and loss of data.
- The integrity of employees handling sensitive data and related infrastructure.
Probability and impact assessment for each identified risk threshold is as in the table below
- Response Planning
The response strategy selected will depend on the nature of risk. The response strategy will be both in the internal activities of the organization as well as the external environment. Response to risks shall be recorded in the risk register.
Risk report to issues and the Vice President Loss Prevention. Such reports will be included in the risk register. Risk reports will be issued to line managers and functional heads from junior officers and then the CIO who will prepare the final report for the Vice President Loss Prevention. The risk committee requires the provision of ad hoc reports to stakeholders and project team.The company’s risk reporting should be in line with the risk aggregation capabilities and the risk reporting policies of Fleyton Electronics. The risk reports should look at the disappointing facts of relevant part necessary for improvement in the company. The reports of Fleyton Electronics are created on the value-based culture that leads to responsible risk management programs. The organizational need to anchor risk management is based on the operational and strategic control aspects in the risk management program (McNeil, Frey & Embrechts, 2010). Therefore, the risk reports should provide a systematic business model and measure to avoiding the credit card leaks to the public.
In understanding the international risk-reporting framework, Fleyton should make risked decisions in a timely manner in order to ensure the stability of the risk management program. Risk reporting is done based on the progress monitored by the risk committee of the company and supervisory guidelines from identified institutions. The risk committee identifies the suitability of the risks to be included in the risk reports
- Implementation Review and Control
Agreed activities as per the risk management plan will be implemented. The stakeholders to identify new risks will review them on a regular basis. The activities assist in checking the progress of existing risks and agreed-upon responses, and assess the effectiveness of the process. These activities include the adoption of advanced technological applications and the process of identifying and reviewing the risks. In the implementation review and control of the risk management, Fleyton Electronics should align itself with the current technological advancement. The alignment of the business with the current technology helps to maintain the business competitive and enhance growth (McNeil, Frey & Embrechts, 2010). Fleyton Electronics can adopt recent computer and software application to minimize the risks of data loss in the credit cards. This enhances the company integrity and availability in improving the operational and financial performance of the business.
Current information technology adoption exposes the business to the current risk of the credit card leaks. These include weak security, inaccurate data and information, and incomplete transactions. The review of the risk management program allows the management to obtain the reliable information on the risks. Implementation and review can lead the business to different control that mitigates risk related to the development of new applications. It provides an understanding of the key communication approaches on the risks involved and creation of relevant relationships with the clients. In order to integrate security in the development of the applications, Fleyton Electronics should ensure the availability of adequate finances. This includes testing and measuring of the additional techniques to be installed in the company to enhance effective risk management. Throughout the implementation review, Fleyton Electronics is able to address the key risk in the modification of its credit cards leaking system. Activities agreed on the risk management plans are used in the implementation review and control of the risk process (Culp, 2002).
The risk threshold section provides acceptable levels of risks by Fleyton Electronics if the credit cards are hacked. The risk thresholds seek to provide the acceptable risks by the company. In most organizations, they set a risk policy that identifies the risk threshold. In Fleyton Electronics, the risk threshold schedule identifies the project risks that are acceptable by the company. The risk thresholds assist in determining the negative threats that can be accepted if the company can tolerate the inconveniences with the balance of its benefits. As indicated in the figure below, the proportion of customer credit leaked is grouped into four of the risk thresholds. Theses include the high risk at 15 percent, medium risks at 6 to 14 percent risks and low risks at 1-5 percent of the proportion of credit cards that can be hacked at Fleyton Electronics.
Fig.1 Risk Threshold Schedule
|Risk threshold||Proportion of customer credit card leaked|
The risk levels have been defined as the proportion of credit cards hacked at Fleytons Electronics. They are measured as high, medium, low and nil, which are >15%, 6-14%, 1%-5%, and 0% respectively.
Based on the nature of Fleyton Electronic operations, the values of risk levels in the threshold schedule are justifiable. At high risk of the credit cards being hacked, the business has an acceptable rate of 15 per cent. In most occasions, the credit cards can be hacked, but the 15 percent is justifiable. In the case of 14 percent to medium risk, it is relevant due to the ability of the business to control the risks. In spite of all, the business accepts 1 to 5 per cent of the lower risks on its business operations. Therefore, the different levels of risks acceptable by the business are justifiable considering the nature of the business.
Definitions of Probability and Impact
|RISK THRESHOLDS||PROPORTION OF CUSTOMER CREDIT CARD LEAKED||PROBABILITY||IMPACT ON FLEYTON ELECTRONICS’ BUSINESS OBJECTIVES|
|COST||REPUTATION||EFFECTS ON OPERATIONS AND FINANCIAL PERFORMANCE|
|HIGH||>15%||15%||-$10,000,000||It might result in a very high level of negative reputation as they may lead to media attention||It will have a profound effect on the operations and financial performance of Fleyton Electronics|
|MEDIUM||6%-14%||15%||-$8,000,000||Medium level of negative reputation||It might have a relatively high effect on the operations and financial performance of the Fleyton Electronics|
|LOW||1%-5%||60%||-$4,000,000||Low level of negative reputation||It might have a relatively low effect on the operations and financial performance of the Fleyton Electronics|
|NIL||0%||10%||$0.00||No change||No effect on the operations of Fleyton electronics|
This is the probability that any of the risk levels above occurs during the operations of the company’s activities. The probability distributions are shown in percentages that range from 0 to 100 percent. This indicates the likelihood that a certain risk will occurs in the business. Based on the four risks, high skills have a likelihood of 15 per cent, medium have 15 per cent, low have 60 per cent, and nil has 10 per likelihood. Fleyton Electronics should be keen on the risk levels in the company in order to control its risks effectively. The different probabilities indicate the effects of possible risk occurrences in the company activities.
This is a quantification of opportunities that may be lost due to credit card data leak, such as lost sales and costs that may be incurred in defending lawsuits, investing in infrastructure, and fines. The allocation of costs depending on the proportion of cards leaked on the different risk levels rather than the probability distributions. At high risks, Fleyton Electronics will incur costs of $ 10,000,000, at medium risks it will incur $ 8,000,000, at lower risks proportion it incur $ 4,000,000, while at lower risks it will incur no costs. Therefore, the higher the rates of credit cards leaked, the more costs are incurred in the business.
This is the effect of each level of exposure of credit card data leaking risk on the reputation of the store. The exposes of the credit cards to leaks exposes the company to operational risks that places their close competitors on the gain. The operation of the business is subject to intense competition in the industry. Many companies offer credit cards in the industrial sector. The levels of credit card leaks in Fleyton Electronics expose the company to the risks of losing its customers to close competitors (Culp, 2002). Thus, increased exposure of the credit cards to data leaks has adverse effects on the reputation of the company.
Effects of the Operations and Financial Performance of Fleyton Electronics
This is the effect of each level of exposure of credit card data leaking risk on the operations and financial performance of the store. The risk management department in the company states that the risk involved in the company affected customer satisfaction. The breach of secret affected their confidentiality and credibility on the services offered by Fleyton Electronics. In addition, Fleyton is required to operate under certain regulatory framework in the technology industry. Some of the regulatory framework requires that the organization should maintain confidentiality and professionalism in its operations (Duckert, 2010). The risks involved in the operations of the business contravene the regulation and thus affects the smooth running of the company. Certain risk includes systems failures, hacking of ten risks and lack of secrecy. This eventually affects the credibility and the ability of the company to maintain appropriate levels of safety in the company.
Based on the operational risk in the section, Fleyton Electronics are affected by the reputational concerns that may reduce their financial earnings. The revenues of the company depend on the public image of the company to its prospective and existing customers. The evaluation of the financial and business performance of Fleyton Electronics reveals a reduction in the investments of the company. The company depends on external sources of funds for its operations. Based on the assessments of risks, the investors are unwilling to invest in the company. This indicates the adverse effects of the existing risk in Fleyton Electronics. High levels of risks in the company can reduce financial performance due to reduced revenues in each financial year.
Culp, L . C. (2002). The risk management process: business strategy and tactics. New York: John Wiley & Sons
Duckert, H. G. (2010). Practical enterprise risk management: a business process approach. New York: John Wiley & Sons
McNeil, A. J., Frey, R., & Embrechts, P. (2010). Quantitative risk management: concepts, techniques, and tools. Princeton, NJ: Princeton university press.
Habitat Loss, Land Use, and Conservation
A habitat is a natural area occupied by particular kinds of animals and plants. Habitat loss may be caused by various reasons such as physical disasters, which cause adverse effects on the environment (Parejo, Oro, & Danchin, 2006). Poor management of lands such as the burning of vegetation and poor cultivation can make the habitat to disappear entirely. It is thus necessary for the government to try to come up with measures to conserve the habitat for instance by requiring that the people that it represents are mindful of the environment in their day to day activities to ensure that these valuable natural habitats are not destroyed.
An invasive species is a plant-animal species, fungus bacteria insect, fish, or organism eggs, which are not native to their location, which tend to scatter to a certain degree and are believed to harm the environment. They have affected some parts of the United States regarding human health and economy.Some of the invasive varieties in Nebraska include the zebra mussels, white perch, and the rusty crayfish. On the other hand, endemic species are those found in specific regions in the world. The scales vary in scale and exist in mountains, lakes, and islands among other regions.
Endemism can also apply to subspecies, genera, families, or other taxa. Additionally, most of the endemic species are found on Islands, given that geographic isolation contributes to the preservation of endemism. Some of the endemic species found in Nebraska include the swift fox, northern long-eared bat, black-footed ferret, river otter, and the southern flying squirrel (Habtemariam, 2017). Millions of birds existed initially, but due to the growth of the offspring of cats that fed on them, their numbers dropped to a few hundred thousand. The only bird that could be traced was the ascension frigate bird, which had been moved to nest on an offshore rock where the cats could not access.
The government later intervened by destroying invasive species It has shown its support though coming up with laws to prevent the killing or trading of endangered creatures, making safe pesticides, and protecting habitats. Some of the protected species include the American bald eagle, the crying wolfs, the humpback whales (The Economist, 2016). The most prominent problem facing the government is the loss of habitat. The government has come up with some measures to deal with the degradation of the habitat like creating awareness among its people and educating them on the importance of the habitat and its surroundings. It has also advocated for the preservation of the wetlands and salt marsh vegetation to provide valuable habitats for birds and other crucial species.
Despite the challenges facing the government, it has come up with a plan to curb the developing of areas of significant beauty. The principal way of minimizing the use of pesticides and animal poaching is to establish guarded areas like national parks. Over time, more parks have been established all over the world and more land preserved (The Economist, 2013).
The cougar is famous for its jumping ability and strength. Initially, cougars were regarded as endangered creatures, but their population has been growing predominantly in Western North America. They require extensive lands to support their breeding, and so humans should be cautious not to harm their habitats (Heath, 2013). However, due to the growing economy, people have established settlements on land where these species inhabit and thus destroyed their habitat.
The illegal animal parts’ trade generates 200 million a year, and the number is still growing. However, poaching is illegal and can lead to severe penalties. Although the penalties are enforced, there is a slim chance of a poacher being caught, as there are not enough law enforcement officers in the federal wildlife parks or game wardens.
The Centre has been evaluating the link between economic costs and conservation value of its living collections. The method it employs is simple in that it compares 60 plants in the array to a large sample of plants existing in the initial population. Additionally, in this scenario, the amount that the state can put in to preserve this phytology vegetation may be around two hundred billions taxpayers’ money. Some of the benefits brought about by conservation include preventing erosion, saving endangered species, protecting health, and assuring food security (“Where eagles dare,” n.d).These plant collections are measured using various graphs that relate conservation size and the cost of plants growing in that a group of 60 plants, and it captures all but a small percentage of the population diversity.
A point where additional plants in a collection do not give or add significant conservative value is referred to as the diminishing marginal returns. This is because of the addition of genetic taking as the sum of these plants increases. The correlation between collection size and cost, for most conservation work, is the travel time to the field sites and the personal values for the field botanists. The relation reflects the efficiency of the operation. One can preserve a plant when there is maximum collection size, whereby the unit cost is equal to the lowest collection size since the value of conservation is the same.
is thus essential for the government and other stakeholders to preserve the
environment by taking care of the plants, animals because they add value to the
economy and the surrounding of the country.
Cougars (Mountain Lions) – Living with Wildlife | Washington Department of Fish & Wildlife. (n.d.). Retrieved from http://wdfw.wa.gov/living/cougars.html
Habtemariam, S. (2017). Other Moringa Species Endemic to Africa. The African and Arabian Moringa Species, 193-207. doi:10.1016/b978-0-08-102286-3.00013-0
Heath, C. (2013). 18 Tigers, 17 Lions, 8 Bears, 3 Cougars, 2 Wolves, 1 Baboon, 1 Macaque, and 1 Man Dead in Ohio. The Best American Magazine Writing 2013. doi:10.7312/asme16225-006
Parejo, D., Oro, D., & Danchin, E. (2006). Testing habitat copying in breeding habitat selection in a species adapted to variable environments. Ibis, 148(1), 146-154. doi:10.1111/j.1474-919x.2006.00494.x
Where eagles dare. (n.d.). Retrieved from http://www.economist.com/news/special-report/21585083-more-prosperous-countries-now-favour-protecting-wildlife-not-killing-it-where-eagles
Ethical case studies
Case study 1: Breach of Conduct
Martin has been enrolled in the postdoctoral research program in the company for the last one and a half years. He was assigned the main research laboratory and has since been working closely with Paul, Clifford, and Maryanne, technicians in the laboratory. The research Martin was working on is crucial to the company’s anticipated product launch, and there was a tremendous amount of pressure on Martin and his group to show results on the research project. In addition, the company had sunk a considerable amount of money into the development of the product and there was a high expectation on Martin to show returns on the investment made. Management was convinced that the project was theoretically well grounded and there ought to be a positive outcome from the research Martin was conducting. The company has a strict policy for its research scientists, especially for the junior scientists who are joining, where progression and retention within the company is linked to positive research outcomes. Due to financial constraints, the company has a relatively limited number of researchers working on projects, and sometimes it is not possible for an in-house re-assessment of research findings, especially in cases where projects are time-squeezed.
Details of situation
Quality assurance has been a challenge in the recent past, as the company has considerably cut its research and development budget in response to the hostile economic climate that has led to cash-flow problems. Researchers are expected to conduct their research under conditions of minimal oversight, and report findings without falsifying or fabricating data. The system largely depends on the integrity of the researchers and their assistants, presuming that they will observe best practices in their research and reporting of data findings. The company has not had any major incident of data falsification in the recent past, and hence the company sees the system as an efficient way of producing research at minimal cost. However, to safeguard the company’s reputation, products are sent to independent testers to give feedback on the performance before they can be released to the public.
Martin and his assistants were working on a software program developed by the company over the last two years, to be released within the year. They had to test the performance of the program under a number of conditions and report on the stability and effectiveness of the program under a number of conditions. There were concerns about the stability of the program when used over different platforms that delayed the release of the program, forcing the development team to rewrite the code in a bid to address the inherent weaknesses.
Martin was part of the development team and his research was to determine if the new changes in the program had addressed the observed weaknesses. Martin and his assistants produced a report showing that the program was stable and performed beyond expectation in all the parameters tested. The company generally does a considerable amount of in-house testing of its products before they are released to the public. The purpose of the testing is to ensure that products meet the industry specifications as well as perform to the advertised company specifications. The company generally has separate development and testing departments to avoid the possibility of conflict of interest in the testers. However, this arrangement has been under pressure in the recent past as the company reduced the number of active researchers in the payroll to cut down on operational costs. Consequently, it is not uncommon to have cases where the people involved in the development of a product also take part in the product’s testing.
The company forwarded the internal testing report and the program to independent industry testers before it could release the program to the public. However, at this stages number of problems became manifest. On testing the program independently, it was found that it performed below expectations in most of the parameters that Martin indicated otherwise. There was a considerable variance between the results obtained by the independent testers and those reported by Martin. It appeared that Martin based his data on the theoretical performance, rather than on the measured performance of the program.
Therefore, although his data was within the theoretical limits of performance, it did not reflect in the true performance of the program as tested in simulated working conditions. It is when the report of the independent testers was returned to the company that it became apparent that the data produced by Martin and the technicians he was working with was fabricated. The situation was detrimental to the reputation of the company because reports by independent industry testers are archived and can be accessed by any interested person easily. The large variance in company and independent test outcomes is especially bad as it paints the company in a bad light since, ideally, the outcomes should be similar when testing is professionally done.
Ethical basis for action
There is a clear conflict of interest in this case, considering that, Martin is involved in both the development and testing phases of the program, making his impartiality in the testing phase questionable. The work environment is also pressurized not only as regards to his career prospects within the company in the event of failure, but also in the need to produce a working program within the stipulated timeline. The lab technicians are also cognizant of the pressure and expectation on the project. Consequently, the motive for fabrication and falsification of data to meet the expectations is relatively high. However, the actions of Martin and the technicians raise a number of ethical issues. First, will it be fair to punish Martin considering that it is the company that placed him in a compromising situation by assigning him development and testing duties? Should the technicians, who are working under the direction of Martin, be punished? Despite the circumstances, can Martin and the technicians’ actions be defensible? Cognizant of these issues, Martin should be relieved of his duties because as the lead researcher, the fabrication of results has not only cast aspersions on his integrity but also put the company into disrepute. This decision is based on the deontological approach to utilitarianism, and Martin is punished for acting in a manner that contravenes the rules, and hence his actions can be judged to be ethically wrong (Secker, 47). The technician should be disciplined administratively for failing to report the malpractice in data reporting.
Case study 2: Accident in pilot plant
The company has been facing challenges in the manufacture of products due to the old manufacturing technology that it is using. This puts the company on a competitive disadvantage because its products tend to be more expensive, primarily due to the manufacturing inefficiency. In addition, the technology the company is using is not environmental friendly and the Green Revolution activists have been conducting a vociferous and visible campaign against the company on its pollution impact on the environment. There are threats to call for boycott of the company’s products, and the negative publicity that the company has been suffering is becoming injurious to the company’s image as well as earning potential. The CEO, Ms. Brown, directed that the company must take cognizance of the issues raised by the environmentalists and institute measures to ameliorate the damage caused not only to the environment, but also to the company’s image. Ms. Brown ordered one of her senior managers, Mr. Kraft, to expeditiously find a solution to the issues raised by the environmentalists. The proposed solution had to also address the inefficiencies inherent in the manufacturing process with a view to streamlining the process to make it more profitable to run.
Details of situation
After being assigned the task of addressing the issues raised by the Green Revolution and increasing the efficiency of the manufacturing process in the company, Mr. Kraft identified the adoption of a new synthetic reaction system as the solution that will adequately address the issues. The system will significantly cut down on the pollution effect of the manufacturing process while increasing the efficiency of the manufacturing process, making the company more profitable. After consulting Mr. Mokbel, the operations manager, Mr. Kraft decided that before the company could overhaul its manufacturing system, it could first establish a pilot plant. Kraft, Mokbel and Ms. Paula, the plant manager settled on the synthetic reaction system as the manufacturing process that could address all the problems that the company was experiencing. Consequently, a pilot plant using the synthetic reaction system was set up by Chamolia Corp, and Mr. Chambers was put in charge of the new plant, reporting directly to Kraft.
Mr. Chambers was to report to Kraft daily on the progress of the system, filing reports on the different parameters that were needed to determine the efficacy of the new system. The new pilot plant, in all appearance, worked optimally with peak output. There were no major problems reported on the synthetic reaction system and it seemed that the overhauled manufacturing system will use the synthetic reaction system. However, after around two months, an accident occurred in the pilot plant leading to the destruction of the pilot plant. A fire broke out during peak running of the plant leading to the destruction of the plant. Fortunately, no employee was seriously injured in the two pm blaze, and the cause of the fire is not very clear with employees present in the factory giving conflicting reports about the origin and cause of the fire. From the varied accounts of the fire collected from the employees, it appears the blaze originated from the core of machine before quickly spreading due to the flammable raw materials used in the manufacturing process. Following the fire, there was need to conduct an investigation to determine the likely cause of the fire and the suitability of the synthetic reaction system for adoption and use in the manufacturing process of the company.
When Kraft was requested to produce the daily progress reports filed by Mr. Chambers, he claimed that the daily progress reports had been used to make weekly progress reports and then destroyed. Data for the last three days leading to the accident is missing and Kraft claims that a weekly reporting schedule has been used instead of the daily schedule earlier anticipated. Chambers claims that the notes he had made for the weekly report has been destroyed by the fire, hence cannot be used for the investigation. The weekly reports in the possession of Kraft show that the pilot plants had been experiencing operational problems that were interfering with the efficiency of the system. The reports show that the pilot plant was showing structural integrity problems in addition to unpredictable changes in system core temperature. The reports imply that the accident is a force majeure, and the management is not in any way culpable for the accident.
Ethical basis for action
The information obtained from Kraft raises a number of issues that have to be considered when making ethical decisions. It is surprising that the problems that are well articulated in the reports are unknown to the CEO, considering that Kraft and his team had not raised any red flags on the synthetic reaction system. This raises serious concerns about the accuracy and integrity of the data presented by Kraft. For the company to be compensated for the accident there should be no suspicion of negligence from the employees. Using the consequentialist approach to ethics, it can be argued that Kraft may have acted unethically, although he had the right motives – minimizing damage to himself as well as the company (Louise, 67)
Cognizant of the likely consequences, it
is possible that the top managers were motivated to deliberately tamper with
the testing data to insulate themselves from censure. In addition, if the
report presented by Kraft is true, he is culpable for negligence, which may
have led to fatalities, for not acting on the observed weaknesses. Therefore,
Kraft and Chambers should be immediately suspended from the company to
facilitate a full and impartial investigation into the accident. It will be
unethical to summarily dismiss them because it is not certain that they
falsified the data. Using motive consequentialism, it is prudent to determine
the motives of the employees acts before determining whether they actions were
right or wrong (Hooker, 115). In addition, staff at the pilot plant should be
interviewed thoroughly to get a balanced picture of what might have happened.
The staff at the plant should only be punished, if after the investigation,
they are found to be culpable for the accident.
Hooker, Brad. Ideal Code, Real World: A Rule-Consequentialist Theory of Morality. Oxford: Oxford University Press. (2000). Print.
Louise, Jennie . “Right Motive, Wrong Action: Direct Consequentialism and Evaluative Conflict.” Ethical Theory and Moral Practice, 9.1, 65-85. (2006). Print.
Secker, Barbara. “The Appearance of Kant’s Deontology in Contemporary Kantianism: Concepts of Patient Autonomy in Bioethics.” The Journal of Medicine and Philosophy, 24.1, 43-66. (1999). Print.
Nivea Case Study
Describe the first “P” in the Marketing Mix, People. Who are the consumers and what is the nature of their demand?
People denote the knowledge, level of expertise and services of individuals working for a company, as they help in getting the firm from its challenges. In most cases, customers will make decision about products and services and the delivery depending on the representatives of the company. In this case, company employees require service knowledge and outstanding interpersonal skills to present a quality service. They also need the capacity to choose, recruit and retain the right people with excellent skills and matchless abilities. Consumers buy products either for use or resale. In this case, the consumers are teenage women and mothers acquiring the commodities for their daughters who share common lifestyle and attitude. They buy products in company of other friends who are shopping other goods from groceries.
Describe what is meant by a business being ‘consumer led’
This refers to when a business firm operates in response to the tastes and preferences of buyers in the market. For Nivea, it endeavors to meet the needs of its customers through innovative products. It addresses lifestyle needs of its customers, making it consumer friendly. A consumer led business always improves its current products and introduces new ones to fulfill the demand of buyers. Over the years, Nivea meet beauty needs of its customers, offering value for their money through quality products. This makes Nivea, a customer led company.
What are the key parts of the Marketing Mix? Explain how each works with the others
A marketing mix encompasses understanding the market in terms of what customers want, how they will use the product, branding, color, price, size, and features, which address the needs of buyers. Through market research, it is possible to identify market segments with regard to attitude, age and style. Companies can collect this information by gathering data from customers, listening to their comment or through product testing. The product is the center of any marketing mix, since it creates the need to be in the market, priced and promoted by qualified people.
After indentifying a product, the second step is pricing. Price of a product refers to a cost, which maximizes profit margins of the business and guarantees value for customers’ money. It is important for a company to provide customers with high quality products, worth the cost. Additionally, establish if your customers are price-sensitive, i.e. will a slight drop in price lead to a higher market share or will small increase lead to extra profit margins. Moreover, a company should factor in discounts and compare prices with other players in the market. Too high prices repel customers while too low prices attract losses. Price is key because every product needs a price tag before getting to the market. Through price, a company will make profits or losses.
Promotion is about deciding the appropriate time and place to communicate marketing messages across the target market. Promotion is usually through ads in print or electronic media, internet, billboards, and PR strategies. Among others, a firm identifies how competitors in the market reach their target audience, best promotional times, and identifying any environmental issues, which could determine the timing of the promotion. Promotion makes a product competitive in the market as it denotes the availability of the product. Promotion further ensures that the product is in the right target market.
Place is where customers will find the product. Will they visit the internet, or physical store? How will they access distribution channels? Identify the need for a sales force and establish the activities of competitors and their locations. Identifying the most appropriate point of sale is paramount. Once a company has identified the product, promoted and price, it meets the needs of customers in a specific location.
Explain why the balance of the marketing mix is as important as any single element
Balancing the marketing mix is of great significance because the product reflects the efficacy of the company and makes it possible for customers to identify affordable products, depending on the purchasing power. Additionally, having such a balance is importance as it ensures that the firm produces high-quality products, which satisfy customers’ needs. This further helps in retaining the product brand. Moreover, the price tells the organization about customers’ acceptability to buy the products. Balancing the price is also essential to ensure that the company has satisfactory performance rewards and their jobs, making them more productive. Balancing the mix through place allows the company to have a higher market share and make higher profits through increased sales. Such diversified global market further makes the organization competitive internationally.
Analyze the marketing mix for NIVEA VISAGE Young. What are its strongest points? Explain why you think this is so
For a company to develop new products, it needs knowledge of the market, through product gathering and collection of important data from customers. Nivea Visage Young uses a range of pricing methods to price its products. These include cost-based, which covers costs, penetration cost, which encourages customers to buy and price skimming, which guarantees the firm high profits. For place, Nivea Visage Young uses a range of distribution channels, like retail outlets, where customers receive skin care products. The company further sells its products in high street stores mainly for youths and mothers. It uses different promotional strategies like direct mail, business to consumer trade fairs, branding and public relations. Uses product samples for customers and has an online magazine to publicize its brand to young women. Nivea Visage Young’s strongest point is the use of the internet to reach young women, since this category of people uses the internet a lot. As a result, it is possible for the target group to know more about the available products.
Global Wine Wars 2009: Old versus New World
The wine industry experienced significance growth in the Christian era because competition for luxury and dynastical stature. Earlier, Europeans had plantations of vines to manufacture various grades of wine. With the establishment of a wine processing firm in France, production of wine grew tremendously. Because of favorable conditions in the country, France became a major producer of wine all over the world. France dominated the industry for centuries before other countries could match her production capacity. Notably, the thriving wine industry in France became the epicenter of economic, social and political issues in the country. One of the leading factors, which led to France’s successful wine production, was its proper climatic conditions and geographical features. Located at the heart of Europe, the country experienced as reliable rains and good weather conditions for the growth of grapes. Moreover, France had the right soils, which had matching nutrient requirements of grapes (Bartlett, 2009, p. 78). With naturally fertile soils, France got bumper harvest of grapes, which provided sufficient raw materials for wine production. This was its strength over potential competitors regionally and worldwide. Due to these conditions, France got experience in wine production, and supplied the finest wine brands in Europe and all over the world.
Its excellent and promising quality of produced wine further propelled France to dominate the industry. It heavily invested in quality wine production as compared to its competitors, making it an experienced player in the market. Additionally pioneers of wine production and promoters embraced the country’s passion for high quality wine. Thus, the industry not only gained dominance but also global recognition. Adoption of technology in wine production further contributed to France’s dominance in the industry. During this time, plants adopted new technology in mass production of bottles, manufacture of crock stoppers and pasteurization of crude wine. With new technology, it was possible to store processed wine for a longer time and meet the demand for wine in different markets. France also supplied wine to distant markets, creating a lucrative global market of which it was the main player. With innovation and relevant technology at hand, wine became stable as it could stay longer without going bad (Bartlett, 2009, p. 82).
France further thrived in wine production because of the government’s goodwill and support. The government of the day formulated and implemented policies, which ensured disciplined practices and high quality production. The government was in full control, making it easy to monitor wine production directly. Some of the measures, which the government implemented, were VDQS and AOS, which regulated wine production from setting up the vineyard to processing. In terms of wine processing, France rose to dominate the market because it had more competitive advantages than its competitors did. Some of these advantages included government support, new production technology, and suitable climatic conditions. By dominating the global market, French wine industry grew not only in Europe but also in the world.
It is worth noting that France faced a range of threats even though it had numerous competitive advantages in the market, as it was exposed to vulnerable conditions. For instance, there was disharmony between vineyards and production, which led to the disintegration of the entire process. Furthermore, unprecedented poor weather conditions, diseases and the high cost of the vineyard dented sales and French distribution system. High taxes and poor roads for transport further catalyzed the vulnerability of the sector. Consequently, the wine industry in France began experiencing logistical and operational challenges in the production process.
Because of the escalating challenges, France and other traditional wine producers started losing their dominance in the industry worldwide. For example, French system of production changed, resulting into high cost of vineyards in the country. Moreover, the continuous production of wine led to the depletion of vineyards. While this was the case, new world had begun using new land, which was more affordable than traditional French vineyards. The entry of New World Countries in the wine industry affected the performance of France and other traditional wine producers. These new countries gained momentum in the industry, with their lower prices, stemming from low operational costs. Which cheap land in these countries, it was also easier to acquire vineyards (Bartlett, 2009, p. 84). Appoint to note, most New World Countries adopted grape farming and applied new technology in processing. Growing grapes remained an extensive exercise because of irrigation techniques. With the introduction of mechanical harvesters, farmers adopted mechanized harvesting. There was high production because of the introduction of fertilizers and adoption of pruning methods. New World Countries also adopted on-site lab technology, which was key in carrying out analysis on proper grape farming and harvesting practices. As a result, they experienced low cost of production, causing a shift in the global wine market. With these developments, France and its affiliates lost their traditional global market share to the New World Countries, which capitalized on their already existing advantages to dominate the world market. This had negative impact on economies of former wine-producing giants.
The most appropriate advice for the head of French Wine Industry concerns regulatory measures and policy framework in processing and manufacturing. For example, AOC regulations are hurting the industry by offering non-competitive opportunities with the emergence of New World Countries, even though they allow production of finest wine in the global market. Thus, the head of French Wine Association must work towards lessening the application of AOC rules together with meticulous research and use of technology in wine production. The head of French Wine Association should further discourage total control of the industry by the government. Some of the government policies ought to be annulled because they undermine wine production process (Bartlett, 2009, p. 87).
In addition, the proprietor of Bordeaux Vineyard, which is a renowned producer of premium and super premium wines, must implement operational measures in order to take advantage of the situation. A good example is developing technology in production to allow new brands thus retaining customers. Bordeaux Vineyard must put into practice responsive attributes regarding new technology and production of new brands. They must however put weight on lucrative markets, which have more opportunities for better returns.
Notably, The Australian Wine industry is successful in implementing its operational measures. With its mission and vision, it is ahead of other competitors in the market. For instance, it has an achievable mission of being the world’s best producer of wine brands by 2015 through innovation and pricing. Nonetheless, it continues to struggle with issues of promotion, price and image design. To handle this, the association should invest in global marketing campaigns to enhance their public image and awareness of the Australian wine quality (Bartlett, 2009, p. 89). If it implements these measures, the association will overcome current threats and thrive in wine production and marketing.
On the other hand, Vineyard in Barossa should carry out intensive research on high quality wine production at a lower cost. They also consider other markets like Asia and China and not relying on US and British markets.
For the US wine industry, the head should focus on streamlining the production cost through mechanization like the Australian wine industry does. Moreover, the US should do away with its three-tier distribution system, as it is a threat to export products, while handing over cost advantage to other players. USA wine producers should also include middle segment in the whole production process. American wine agencies must develop brands and promotional strategies to reach the global markets.
Washington Mutual Bankruptcy
Washington mutual bankruptcy marks the largest case of a bank failure. Washington mutual was a popular savings bank and the largest loan and savings association in the United States until it collapsed in 2008. Washington Mutual filed for bankruptcy on 26th September 2008 and it was eventually delisted from the stock exchange in New York.
The saga that led to filing for bankruptcy started at the onset of global economic crisis. It began on15th September 2008, which was the day when Lehman Brothers filed for bankruptcy sparking a crisis. Lehman Brothers filed for bankruptcy due to the subprime mortgage loan crisis. In one year, price of the stock of this company dropped from a share of $30 to $2.
As a result, Washington Mutual’s customers withdrew deposits amounting to $16.7 billion in a span of 10 days from Washington Mutual after the Lehman Brothers’ case. This prompted the government to place this company under the FDIC control. FDIC sold its assets to the JPMorgan Chase at 1.9 billion. As the Washington Mutual’s receiver, the FDIC retained the claims Washington Mutual held against the other parties.
The move to sell the assets of the firm made debtors to file chapter 11 petitions. Eventually, disputes emerged between FDIC, JPMC, debtors and other interested parties. The disputes were centered on propriety of JPMC sale and multiple assets’ ownership. There were also angered litigations in different jurisdictions.
A global settlement agreement also known as GSA was announced in March 2010. This was incorporated in Sixth Amended Plan. In an order and opinion dated 7th January 2011, the conclusion made by the court was that the announced GSA was reasonable and fair. However, the court did not confirm Sixth Amended Plan stating that it had too broad injunction, release as well as exculpation provisions.
In a bid to address the concerns of the court, the GSA and Sixth Amended Plan were modified on 16th and 25th March 2011. FDIC, JMC, Creditors’ committee, WMI senior group of note-holders, debtors and the other parties supported the modified Sixth Amended Plan. However, equity committee, litigation tracking warrants holders, some WMB note-holders, other creditors and share holders opposed the Amended plan.
Those opposed to the plan argued that settlement negotiations were marred by improper trading. They alleged that improper trading formed the basis of their objection. According to them, the proposal of the modified plan was not in good faith and that note-holder’s settlement should be disallowed equitably.
An examiner was appointed by the court at the request of the equity holders of WMI. The examiner investigated the claims thoroughly to determine whether the settlement proposed was equitable and fair. Findings of the examiner revealed that this settlement provided a fair resolution.
On 24th February 2012, the court entered the order to confirm a Seventh Amended Plan as proposed by the WMI and co-debtor. On 19th March 2012, the settlement and plan became effective.
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Lehman Brothers’ Bankruptcy
Lehman brothers’ bankruptcy was considered as the largest in the history of economics. This is because the company’s assets were more than those of the previous giant firms to file for bankruptcy such as Enron and WorldCom. The company was also the fourth-largest investment bank in the U.S.
Why filing for bankruptcy was necessary
The move to file for bankruptcy is attributed to subprime mortgage. From 2003 to 2004, there was a housing boom in the U.S. At this time, this investment bank acquired five major mortgage lenders that included subprime lender and Aurora Loan. At first, the acquisition seemed lucrative. The bank reported profits from 2005 to 2007 with net income rising to $4.2 billion.
The stock of this bank reached $86.18 as of February 2007. This gave the company market capitalization of almost $60. Unfortunately, the housing market in the U.S already had cracks by almost the same time. Subprime mortgages had defaults that rose to even 7-year high.
On 14th March 2007, one day after its stock recorded the biggest drop in a day for five years, Lehman’s brothers recorded profit and revenues for the first financial quarter. The chief financial officer of the company stated that the company was containing home delinquencies and their impact on the earnings of the firm would be minimal. The officer also said that there were no foreseeable problems posed by subprime market to the U.S housing market and that this would not affect the U.S economy negatively.
The credit crisis that started in August of 2007 caused a sharp fall of the Lehman’s stock. During this month, Lehman’s brothers got rid of 2,500 jobs related to mortgages. It also shut the BNC unit down. Three Alt-A Aurora lender offices were also closed.
However, the company continued to be among the major players. For instance, in 2007 the firm accumulated an $85 billion portfolio by underwriting mortgage backed securities. With the new highs of the worldwide equity markets and fixed income assets prices, the stock of this company rebounded. Nevertheless, this firm failed to take advantage of this to trim the mortgage portfolio which was its last chance.
The huge mortgage securities portfolio of this company made it more vulnerable to the deteriorating conditions in the market. Its shares fell to a low of 48% on 17th March 2008 when Bear Sterns, the second-largest mortgage-backed securities underwriter was near-collapse. This forced the firm to issue preferred stock convertible to Lehman shares but the stock continued to decline.
This trend continued and in September 2008 the stock plunged to 77% with the company reporting losses worth $3.9 billion. On 13th September, Lehman, Bank of America and Barclays PLC made the last efforts to facilitate the firm’s takeover but they were unsuccessful.
On 15th September, the stock of this company plunged to 93% forcing it to be declared bankruptcy.
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General Motors Bankruptcy
General Motors filed for bankruptcy on 10th July 2009. This firm is a US auto manufacturing company that was founded by Billy Durant in 1908. Its headquarters are in Detroit, Michigan. Over the years, this company has introduced remarkable innovations in the U.S which enabled it to dominate the economy of the U.S in the 20th Century. It also dominated the auto industry in the 1950s. In 1954, this company had a market share of 54%. However, this was the highest mark of this company.
Domestic market share of General Motors has been declining steadily over the past years. This combined with global financial crisis necessitated restructuring of this company. Nevertheless, several challenges forced this firm to eventually enter the bankruptcy court and file for bankruptcy ending the long and at some point a proud, iconic history.
Worsening market and economic conditions such as those affecting equity and real estate values, tight credit markets, increasing unemployment, high fuel prices, weakening housing markets and decreasing consumer confidence have caused a decline in vehicle sales.
U.S alone had a 44.7% decrease in vehicle sales annually by September 2007. Globally, annual vehicle sales decreased by 13.2%. Being a company that is highly sensitive to the sales volume, the financial and business results of General Motors were affected negatively and significantly.
Seeking Congress assistance
The chairman of General Motors, Rick Wagoner, heads of Chrysler and Ford sought assistance from Washington during mid-September 2008. According to The New York Times, $7.5 billion was approved as of October. In the same year in November, the three heads of the auto manufacturing firms went to congress again seeking for a direct aid amounting to $25 billion.
However, Congress approved $13.4 billion only to General Motors and Chrysler. Congress also requested that the companies be restructured to secure the loans. As of February 2009, General Motors was cutting jobs, reducing its brand line-ups and closing plants.
To avoid bankruptcy, the firm announced that it needed a loan worth $4.6 billion of the $18 billion that it had requested within weeks. In addition, the company announced that it needed $12billion financial support.
Filling for bankruptcy
General Motors announced that it had lost $30.9 billion in 2008 or $53.32 per share. The firm also announced that it was spending $19.2 billion of the cash reserves it had at that time. This implied that the cash reserves of this company were as low as $14 billion when it made the announcement on February 26th 2009.
The auto task force of President Obama met Mr. Wagoner and at that time he confirmed that General Motors could no longer survive without more loans from the government. On July 10th 2009, General Motors filed for bankruptcy after which a new and government-owned firm purchased its assets. In the bankruptcy petition, the firm stated that it has debts worth 172.8 billion and assets worth $82.3 billion.
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American Airlines Bankruptcy
American Airlines bankruptcy is considered by many industry observers as a step that was long overdue. This company was among the few major airlines in the US that had always avoided bankruptcy. However, the company had to succumb to a path that is trodden by most of the other airlines in the US.
Why file for bankruptcy?
According to some industry observers the move to file for bankruptcy was necessitated by claims and losses. American Airlines made losses worth $2.1 billion in 2008, $1.5 billion in 2009 and $471 million in 2010. In addition, the company was having managerial, PR and maintenance issues. Pilot union was also demanding for the signing of a contract which included provisions for job and salary security provisions.
Employees were also bitter due to the inability of the AA to make a promising deal. Customers were also irritated by inappropriate engagement in public rants by flight attendants. There were also cases where several planes were forced to land urgently due to issues that arose from insufficient inspection such as loose seats.
There are experts who say that filing for bankruptcy was a strategy used by the American Airlines to enhance its performance. Some airlines analysts such as Jeff Kaufman were surprised by the timing of this move.
According to Jeff, the company had sufficient cash that would pay for the losses and keep the company running for another year. However, he notes that filing for bankruptcy was a sensible move because of several factors. These include the high fuel cost, tough negotiations with labor union and loss of the business customers of the company to competitors.
Until 2006, the American Airlines remained the largest carrier in the world. Mergers pushed this company to a third position in terms of the miles that paying passengers fly after the United Continental and the Delta Air Lines.
According to the management of the American Airlines, filing for bankruptcy was never a preference of this company. However, for the company to ensure its competitive future it had to file for bankruptcy. The management said that the move gave the firm resources required to order for more planes such as 460 jets and the Airbus. This would enable the company to replace its current 247 MD-80 planes which are fuel guzzlers.
The cash reserves of this company combined with cash from the current ticket sales provides the needed funds for reorganization. Thus, the airline will not need the debtor-in-possession loan required by Chapter 11.
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Finjan, Inc. v. Secure Computing Corp Patent Infringement
Finjan, Inc. v. Secure Computing Corp patent infringement case was presented before the United States Court of Appeals for Federal Circuit in 2010. It involved proactive scanning techniques for ensuring computer security.
Finjan, Inc. is a company that provides security solutions to enterprise web. It sued the Secure Computing Corp, Webwasher AG and Cyberguard Corp for infringing three patents in the US. These are the patent number 6,092,194, number 6,804,780 and number 7,058,822. In counterclaim, the defenders accused Finjan for infringing two patents of in the US. These are the patent number 6,357,010 and number 7,185,361.
According to the Jury who presided over the case, these patents were valid. Finjan had not infringed any of the patents of the defendants. However, defendants had infringed on all patents asserted in the Finjan claims. As such, Finjan was awarded damaged worth $9.18 million by the district court under 35 U.S.C 284. A permanent injunction was also issued against defendants.
After passing the verdict, defendants appealed for both damages and infringement. On the other hand, Finjan appealed the damage ruling by the district court. Finjan claimed that it should be awarded more damages for duration between post-judgment and the pre-injunction.
In the case, Finjan had three patents that were related to the proactive scanning technology. These technologies were used in detecting and defeating previously unknown computer threats on the internet. These patents were as follows:
- 194 Patent: This included the method claims, storage medium, and system claims that could compromise receiving and comparing steps for downloadable and protection downloadable execution for the purpose of detecting and preventing threats.
- 780 Patent: It included system, storage medium and method claims. It also covered caching or identification of downloadable files that had been encountered previously.
- 822 Patent: This included the system and method claims. It also addressed sandboxing of downloadable items that were potentially dangerous with a protective code.
After hearing appeals from the two sides, the Federal Circuit decision was mixed up. This is because method claims are difficult to determine since they might require performance of some functionalities to find infringement. In regards to infringements, Federal Circuit affirmed infringement of the storage medium and system patent of Finjan by Secure Computing. However, it reversed infringement of method claim of Finjan.
In regards to the damages award, Federal Circuit affirmed the $9.18 damages awarded to Finjan and also remanded the district court to conduct extra assessment for additional damages between post-judgment and the pre-injunction duration.
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Uniloc USA, Inc. v. Microsoft Corp. Patent Infringement
Uniloc USA, Inc. v. Microsoft Corp. patent infringement case was filed originally in 2006 in U.S. District Court for the District of Rhode Island. Uniloc is a copy protection and computer security software company. It was established in 1992. This company operates on patent-based technology given to Ric Richardson. Uniloc develops try and buy applications which is distribute through magazines. They apps are also preinstalled in new computers.
In this case, the controversial patent was 216 patent. In the US, it is patent number 5,490,216. This is a software registration system deterring users of the software from copying it to other computers. According to Uniloc, Product Activation Feature of Microsoft infringed this patent.
The Product Activation Feature of Microsoft acts as a gatekeeper for different Windows operating systems as well as the Microsoft Office products. Users are required to enter a key with 25 characters in this product. The key is an alphanumeric key. Based on this software, it forms a Product ID and then a Hardware ID is generated from the computer information.
After initiating Product Activation, digital license is requested from Microsoft via the internet. In a remote location, the information is entered into an SHA-1 Windows products’ algorithm or MD5 message digest algorithms for the Office products.
Both software pieces hinder copying of the software casually and users install the copies of program in multiple computers. This violates the conditions of software license. According to Uniloc, Microsoft uses algorithms in the product activation application that infringe its patent.
Microsoft and Uniloc used product key with an aim of reducing unauthorized copying of their software. The district court granted a summary judgment that declared that Microsoft did not infringe patent of Uniloc. However, Uniloc appealed the ruling of the district court in the United States Court of Appeals for the Federal Circuit. This court reversed the ruling and the decision was remanded.
In remanded case, the district court returned the infringement verdict. The court found that infringement by Microsoft was willful and therefore it rewarded Uniloc damages worth $388 million. However, district court allowed for a new trial on willfulness and infringement and other motions after the post-trial motions. Uniloc appealed again.
The new infringement trial was reversed by the United States Court of Appeals for the Federal Circuit but it affirmed the lack of evidence on the side of Uniloc to prove that the willfulness. A new trial for damage costs was granted.
Later, Microsoft and Uniloc reached a mutually agreeable settlement and the terms of this resolution were kept secret.
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TiVo Inc. v. EchoStar Corp. Patent Infringement
TiVo Inc. v. EchoStar Corp. patent infringement case was presented in the United States District Court for the Eastern District of Texas as well as the United States Court of Appeals of the Federal Circuit. The case took place between 2004 and 2011.
In this lawsuit, TiVo Inc. was suing EchoStar Corp. claiming that it had infringed its DVR technology patent. Several issues were addressed during the litigation. They included product redesign infringement, injunctions wording, patent infringement, contempt sanctions and court orders’ contempt.
A permanent injunction was issued by the court against EchoStar Corp. However, EchoStar appealed against this judgment in the United States Court of Appeals for the Federal Circuit. The infringement judgment was reversed by the Federal Circuit court after review due to hardware claims. However, infringement due to software claims was affirmed by the court. The injunction issued by the District Court was maintained during the court of appeals’ proceedings.
According to the court, EchoStar Corp was not only in contempt of the court due to its non-compliance with the injunction, but it had also infringed the patent of TiVo Inc. EchoStar appealed against the contempt of court judgment in the Federal Circuit. However, EchoStar Corp arguments did not move the court.
The court affirmed the ruling and EchoStar was mentioned for rehearing at the en banc. After review, en banc Federal Circuit noted that KSM test could not work and it established a new post-infringement contempt proceeding test. The existing contempt test was replaced by the court with a one-step test. This simplified test made it difficult for holders of patent to prove contempt due to repeat infringement.
Upon vacation, en banc Federal Circuit remanded infringement provision of a permanent injunction. However, it affirmed the contempt judgment in respect to violation of Disablement provision. This implied that court held EchoStar in contempt of court. However, the two parties in the case reached an agreement, EchoStar Corp. paid licensing fee to TiVo Inc.
On 29th April 2011, the companies reached a settlement worth $500 million. EchoStar Corp. accepted to license TiVo Inc.’s DVR technology. Additionally, the pending litigations were set for dismissal with prejudice and injunctions dissolved. However, en banc federal did not dismiss the Federal Circuit appeal since a decision had been reached before a settlement. Thus, all parties were free on remand to ask the District court to dismiss complaint and to vacate sanctions that had been imposed before die to settlement.
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Diamond v. Chakrabarty Patent Infringement
Diamond v. Chakrabarty patent infringement case was heard in the United Sates Supreme Court in 1980. The case entailed the patentability of genetically modified organisms. Genetic engineer known as Ananda Mohan Chakrabarty developed a bacterium called Pseudomona putida while working with General Electric. The bacterium can break down crude oil which made it suitable for treating future oil spills.
Chakrabarty was listed as the investor of the bacterium by the General Electric when the company applied for patent. However, patent examiner rejected the application on the basis that patent law of that time considered living things as not being patentable subject matters. The examiner quoted Section 101 of the Title 35 U.S.C.
Although the Board of Patent Appeals and Interferences upheld the initial decision, the United States Court of Customs and patent did not. It overturned this case in favor of Chakrabarty noting that for the purposes of patent law, the fact that all micro-organisms are living things does not have legal significance. Sidney A. Diamond who was the Patents and Trademarks’ commissioner made an appeal to Supreme Court. This case was deliberated on 17th March 1980. A decision was made on 16th June 1980 and on 31st March 1981, USPTO granted patent.
In the decision that was made in Chakrabarty’s favor, the court noted that a live micro-organism made by human under Title 35 U.S.C, 101. The micro-organism of the respondent constituted of a composition of matter or manufacture within the statute. The decision was written by Warren E. Burger, the Chief Justice. Others who joined him were Potter Stewart, William Rehnquist, John Paul Stevens and Harry Blackmun.
According to Burger, the case presented to the court was narrow according to the interpretation of Title 35 U.S.C, 101. The title allows individuals or entities who discovers or invents useful and new processes, machines, matter’s composition or manufacture whether new or improvement to obtain patent for them under the conditions stipulated by the title.
The judges cautioned the court against reading conditions and limitations in the patent laws which had not been expressed by the legislature. The court observed that when congress chose expansive terms such as composition of matter and manufacture and later modified to any, was a plain contemplation of the wide scope of the patent laws. The court concluded that congress intended to include anything under the sun that is man made in the list of patentable subject matter.
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Aro Mfg. Co. v. Convertible Top Replacement Co. Patent Infringement
Aro Mfg. Co. v. Convertible Top Replacement Co. patent infringement case was presented in the United States Supreme Court in 1961. While deliberating on this case, the Court redefined repair and reconstruction doctrine of the U.S patent law. The decision made by the Court is known as Aro I in some cases because some years later similar issues were readdressed by the Supreme Court in another case in 1964 in which similar parties were involved.
In controversy in the case was about fabric top replacement in a convertible automobile’s roof assembly. After sometime, fabric tops of a convertible would become discolored and torn due to droppings from birds. Owners would like to replace the part of the tops that is made of cloth without having to purchase the entire top assembly of the convertible.
The patent would cover some metal parts and the cloth that would be serviceable. Aro supplied replacement cloth that would fit different car models. Patent infringement arose when Aro refused to pay patentee a royalty fee.
Before the Supreme Court made a decision in Aro I case, buyers of patented products replaced the components of the products. The lower courts in the U.S decided whether this conduct was permitted as a repair or an impermissible reconstruction of patented article using complex and multi-factor balancing test. When making the decision, the courts had to weigh several factors including cost of replaced components against the relative components of the whole article, replaced components against the overall number of the components, life span of the components and essence of the replaced components, as well as whether the replaced component was the gist of the entire invention.
In its opinion, the court of appeals said that the main issue is not relatively expensive or minor component of patented combination or element that is expected to wear out after some years of use despite having an expectable life span that is shorter than life span of other components. For this reason, the court concluded that the owner would or would not rationally believe that a minor repair was being made while replacing worn out fabric. Instead, this replacement would account for a major reconstruction.
However, few precedents of the Supreme Court had a broader analysis than foregoing the factor analysis. The Court noted that distilled essence of the case originated from a ruling by Judge Learned Hand who stated that patent monopolists should not hinder their buyers from reconditioning articles that are worn out by use unless if they make new articles. On this basis, the court rejected factor analysis approach used by the lower courts on reconstruction and repair.
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