AWRC is one of the few remaining foundries in the global semiconductor industry. This “chip” manufacturer is based in Technesia, a country in Southeast Asia. The company is a relative newcomer to the highly competitive and concentrated chip industry but it has quickly become deeply embedded in complex supply chains spanning the globe. Its primary markets are in Europe where it benefits from ASEAN. It hopes that the recently negotiated RCEP agreement will further boost its business to neighboring countries in Southeast Asia.
- Though the company is now privately-owned and recently listed on the Technesia stock exchange. The state still has some involvement.
- Five years ago, AWRC began expanding its risk management team. So far, they have focused mainly on planning for internal risk (i.e. a plant fire or work stoppage).
- Margins are thin as the industry is very competitive and the company is relatively new. They are still trying to achieve economies of scale after the substantial investment needed to develop the firm. The leadership team is very aware of the stock price and faces pressure from major shareholders to deliver on the aggressive profits forecast during the recent IPO. The senior leadership team’s annual bonuses are tied to the previous year’s profits.
- The industry is also threatened by substitute products as companies such as Apple are threatening to begin making their own chips. The US and Europe are subsidizing their industries (though they are years away from meaningful levels of production).
- The company employees 35,000 employees with plans to grow to about 45,000 once at full capacity making them one of the major employers in Technesia.
- Their state-of-the art plant is located just outside the capital city. Technesia has been working hard to develop a deep-water port near the capital which will benefit the company when it is completed. This is in line with their Technesia 2030 growth plan.
- Technesia is an emerging middle-income country.
Assignment Part 1 (30% of your effort here):
Develop a risk classification scheme for AWRC. You should consider a variety of risks analyzing their potential impacts on civil society, their relationship with the government, economic and firm-level impacts. Don’t forget to assess whether the risk impacts are global or local.
Part 2 (70%):
Then, using the risks in the high-impact low probability exogenous shock category, help AWRC plan a firm response to these shocks using an ERM framework. Make sure you include specific ideas and strategies the company can use to plan for risk, mitigate a crisis when it occurs and develop resilience. Be sure to balance different stakeholder needs in your response.
Your total report should be 3,000 words. All references must be cited. APA formatting for in-text citations and references is preferred. References are not included in the word count. The following grading criteria will be applied:
- Student demonstrated accurate understanding and application of course concepts
- Approach was sufficiently detailed demonstrated a nuanced and creative approach to the topic
- Content was well-developed with adequate levels of detail
- Evidence provided was appropriate and appropriately cited
- Direct quotes were kept to a minimum
- Conventions of standard written English were followed