QUESTION $4(22$ marks$)$From: snrfinanacialmanager@mph$.$comTo: manaacc@myhome.comSent: $29$ July $2024$Subject: Introduction of AIGood dayThe board recognises that rapid urbanisation in South Africa is creating significantopportunities for growth in the furniture market, as reported by Fortune Business Insights$($see Attachment A below$).$ To capitalise on this trend, they plan to strategically implementAI across our operations to enhance efficiency, quality, and the customer experience.They are aware that there is a need for clear policies, regulations, and governanceframeworks to guide the ethical development and deployment of AI in the company.Addressing these regulatory challenges is crucial.The board is excited about the potential of AI to drive significant growth and profitabilityfor the MPH$.$ Our financial projections indicate that once we fully automate our operations,we expect to see a $30\%$ increase in shareholder profits.The Board emphasised that prioritising profits is essential for ensuring the long$-$termsurvival and success of the company. In a competitive market, we have a fiduciary dutyto our shareholders to maximise returns on their investment.While we recognise that some jobs may become redundant due to automation, webelieve that displaced employees can seek employment opportunities elsewhere in theeconomy. As a company, we are not obligated to provide jobs until retirement. Our focusmust be on positioning the business for success in the age of AI$.$By strategically deploying AI across manufacturing, supply chain, and customerexperience, we can significantly boost efficiency, productivity, profitability and potentialfor business expansion, which could offset some of the job losses. This will allow us todeliver strong returns to our shareholders and ensure that the company remainscompetitive and sustainable for years to come.We are confident that the benefits of AI automation, in terms of increased profits andshareholder value, far outweigh any short$-$term challenges around job displacement. Ourpriority is to drive growth and returns for our investors through the intelligent applicationof this transformative technology.MAC$4868[$CONFIDENTIAL$]$ Page $34$ of $39[$TURN OVER$]$As a result, the following $950$ jobs will become redundant:$1.700$ Manual Assembly Workers $-$ where AI$-$driven robotics and automation can handlerepetitive tasks such as cutting, assembling, and sanding furniture components withhigher precision and efficiency,$2.200$ Quality Control Inspectors$-$ where AI$-$based inspection systems using computervision and machine learning algorithms can detect defects and inconsistencies moreaccurately and quickly than human inspectors and$3.50$ Customer Service Representatives where AI$-$powered chatbots and virtualassistants can handle a significant portion of customer inquiries, provide productrecommendations, and assist with online purchases $24/7.$Given the above, please will you prepare a report that I can send to our Board of Directorson the following issues:$4\mathrm{.}1$ Advice the board on how to ethically implement the transition to AI while minimisingstaff redundancy, staying within labour laws, and upholding principles of goodcorporate governance. $(14$ marks$)4\mathrm{.}2$ Discuss any concerns you may have regarding the statement We believe thatdisplaced employees can seek employment opportunities elsewhere in theeconomy. As a company, we are not obligated to provide jobs until retirement.$(8$ marks$)$Kind regardsSenior Financial ManagerMy Pride Home