Sarmiento Inc. (SI) is a new company developed by a group of high school friends to...

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Sarmiento Inc. (SI) is a new company developed by a group of high school friends to provide social media support and services to organizations wishing to advertise using these tools. Sl is experiencing solid growth, which it believes is based on its ability to aggressively market itself and try new things instead of waiting to see what the market does. Some of these strategies have resulted in successful viral campaigns, while a few have resulted in public relations concerns due to misinformation being released. The marketing industry is currently experiencing a lot of change as new means of communication arise and companies try different ways to make themselves known to customers. Companies are often slow to adapt, as they are unsure of the benefits of using social media versus the risks. Sl allows companies to test out the market without having to invest in internal personnel before they are ready for significant investment and training. Management at SI wants to continue growing as quickly as possible but is concerned about the negative public relations problems and unsure whether it should make changes to Sl's strategy. Required: a) Describe SI's risk appetite and tolerance. b) Discuss the enterprise risk facing SI, and explain what could happen if SI does NOT respond to this risk. Provide support for your analysis. c) Discuss what Sl needs to measure in order to evaluate the risk. Sarmiento Inc. (SI) is a new company developed by a group of high school friends to provide social media support and services to organizations wishing to advertise using these tools. Sl is experiencing solid growth, which it believes is based on its ability to aggressively market itself and try new things instead of waiting to see what the market does. Some of these strategies have resulted in successful viral campaigns, while a few have resulted in public relations concerns due to misinformation being released. The marketing industry is currently experiencing a lot of change as new means of communication arise and companies try different ways to make themselves known to customers. Companies are often slow to adapt, as they are unsure of the benefits of using social media versus the risks. Sl allows companies to test out the market without having to invest in internal personnel before they are ready for significant investment and training. Management at SI wants to continue growing as quickly as possible but is concerned about the negative public relations problems and unsure whether it should make changes to Sl's strategy. Required: a) Describe SI's risk appetite and tolerance. b) Discuss the enterprise risk facing SI, and explain what could happen if SI does NOT respond to this risk. Provide support for your analysis. c) Discuss what Sl needs to measure in order to evaluate the risk.

Answer rating: 100% (QA)

a Risk appetite refers to the level of risk that an organization is willing to accept in pursuit of its objectives It reflects SIs attitude towards risktaking and its willingness to accept the possibi... View the full answer