Exercise – Both examples at the beginning of the chapter work well as a class discussion or exercise.

They represent the two types of failure. The Cadbury’s salmonella outbreak case is a particularly serious quality problem. It is serious, but there are well-established mechanisms in most businesses that are designed to deal with this type of problem. The example of the ‘rogue trader’ Nick Leeson is different. It is an example of deliberate or malicious failure. The lack of operations control at Barings Bank allowed his fraudulent activity to eventually sink the company.

Although many financial service businesses have, for many years, had processes in place that should detect fraud of this type, for other sectors it is a new threat. Not just individuals attempting fraud, but hackers, single-issue extremists, terrorists and so on, all now fall into the potential hazard category. An exercise can be built on the identification of such risks and what is needed to prevent, mitigate and recover from them.