FORMATIVE ASSESSMENT $1$

$[100$ MARKS$]$

Read the scenario below and answer ALL. the questions that follow.

XYZ Corporation

XYZ Corporation, a multinational manufacturing company, has been grappling with poor risk management practices and a complete absence of risk assessment protocols. The consequences of these shortcomings have been detrimental to the organization's overall risk management.

Firstly, without a structured risk assessment process in place, XYZ Corporation has been unable to identify potential threats and vulnerabilities that could disrupt its operations or financial stability. This has left the company susceptible to unforeseen events, such as supply chain disruptions, economic downturns, and natural disasters, which have led to significant financial losses and operational challenges.

Secondly, the absence of a well$-$defined risk management framework has hindered the company's ability to respond effectively to crises. Without clear risk mitigation strategies, XYZ Corporation has found itself reacting to risks in an adhoc manner, leading to increased costs, reputational damage, and a loss of investor and stakeholder confidence.

Lastly, the lack of risk assessment and management practices has made it difficult for the organization to secure insurance coverage at reasonable rates, further exacerbating its financial woes. In summary, XYZ Corporation's poor risk management and nonexistent risk assessment have left it vulnerable to a myriad of threats and have hampered its ability to safeguard its assets and maintain financial stability, ultimately affecting the organization's overall management of risk

Question $4$

$(20$ Marks$)$

Assess how a risk management strategy can be undertaken by XYZ Corporation and comment on its appropriateness in the context of the organisation.