(a)The reason behind the collapse of One.Tel Company was not only a result of the cash crisis but also due poor corporate leadership and mismanagement of funds through reimbursements of top managers. The company lacked work ethics whereby the top managers misused available funds through bonuses and other allowances. This large telecommunication company suffered a collapse due to poor management. There lacked a culture of employee valuation, set policies and procedures of dealing with the company’s wealth. This led to misappropriation of funds whereby the top leaders credited their accounts with large bonuses valued at market shares rather than actual profits.
The best risk mitigation strategy for this company was acceptance and avoidance (Scherling, 2011). The managers who formalized the company did not have enough capital that’s why they resulted into operating on insolvency. The mangers also paid themselves massive bonuses and ignored the needs of their employee. The strategy could be achieved by setting down rules and policies to improve on responsibility and accountability standards. This could address the manager’s ignorance. The plan to mitigate this risk could be sourcing for funds to increase their capital turnover. This could eliminate the possibility of working in solvency and having suspense accounts in banks. Such resources would be from bank loans or through leasing some part of the company. Other sources could be sourcing from stakeholders and through shares.
A risk management plan should then be formalized so that all stages of development are updated. This acts as a platform for measuring direction and forms a base for planning ad improvement. The plan should act as a road map that would advice the managers on where their company is at the moment and future expectations. This would also assist in the formulation of risk identification culture that enhances cost and crisis management.
(b)One.Tel Company has lost trust from employees, creditors, insurance agents and other stakeholders. Attaining back this trust is the key challenge that the company has to face. The gross misconduct of the managers put the company’s corporate reputation at risk. To increase SCR and win the trust of the stakeholders, the company needs to work closely and monitor social media. This is through blogs, Twitter, and Face book and review sites. Such allow the customers, and affected parties to voice their anger and compliments. The comments that these users leave are a platform for change (Honey, 2009). Through them, the company can identify what the customers want and how to achieve their targets.
Through such sites, it is easier to come up with an escalation plan that improves the company’s image and corporate responsibility. The plan for this company would be to avoid defense and focus on an effective way of dealing with the damage (Glaessner, Kellermann and McNevin, 2002), The Company should face and accept the fact that its reputation is already ruined, and something needs to be done. In addition, the managers should accept that they have failed their associates and need to commit to their demands.
In order to manage the perception of the public, the company should; be as it would yearn to seem, resolve bankruptcy issues and customer demands swiftly and watch out for any negativity on any project that they tend to overtake (Scherling, 2011). The company should also form a steady public relation department that would market its new policies and aims. This would attract more stakeholders who would assist in uplifting of the company.
Honey, G., 2009, A Short Guide to Reputation Risk. New York: Gower Publishing, Ltd
Scherling, M., 2011, Practical Risk Management for the CIO. Denmark: Taylor& Francis.
Glaessner, T. C., Kellermann, T. and McNevin V., 2002, Electronic Security: Risk Mitigation in Financial Transactions: Public Policy Issues. New York: World Bank Publications