- 15 Marks
CSME – Nov 2023 – L2 – Q6 – Risk Management and Corporate Strategy
This question identifies types of risk in a volatile business environment, using the Turnbull Report.
Question
Today’s business environment is often described by many experts as Volatile, Uncertain, Complex, and Ambiguous (VUCA). Some of the driving forces of the VUCA environment include COVID-19 pandemic, the war in Europe, global warming, and a rapidly changing technological environment.
The impact of the VUCA environment on the global economy includes inflation, dwindling consumers’ purchasing power, rising energy costs, among others, leading to an increase in a sense of turbulence, danger, and unpredictability. With the volatility in the business environment also comes frequent changes in laws and regulations affecting businesses, a factor that adds instability to an already unstable business environment.
You have been asked by a start-up company in the consumer goods retailing business to provide advice on risk management as it concerns the global economy. The company is planning to launch an online retail store with a focus on the global consumer goods market.
Required:
Using the Turnbull Report and drawing from the given scenario, identify and explain to your client the types of risk that are inherent in the VUCA business environment. (15 Marks)
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