Subject : Risk Management

Question 2 (6 marks)

Read the case study below and answer the questions that follow.

Southern Electronics is a South African manufacturer of electronic devices. The company uses Protivitis Risk Model to classify and identify external risks that could have a detrimental impact on the company.

Final products are assembled in factories in Cape Town using components that are manufactured in foreign countries. The prices of these components are heavily dependent on the price of commodities, which have fluctuated significantly over the last year.

An investigative journalist wrote an article on the poor working conditions at some of the suppliers that Southern Electronics uses. The article uncovered instances of unethical labour practices. Members of the public were outraged and threatened to boycott the company if it does not sever relations with the offending suppliers.

Southern Electronics uses a large inventory management system to keep track of all the components that it purchases and inventory of complete products that it produces. Cyber criminals infiltrated the companys network and managed to gain access to all of its confidential information.

2.1 Based on Protivitis Risk Model, categorise the three process risks identified by Southern Electronics management. Motivate your answer with examples from the scenario.