In Chapter 15, Edmonton usedthe PM-squared <a href=”https://www.homeworkgain.com/downloads/research-57/”>risk</a> scorecard process to manage risks, and that included five steps as per the textbook. To reflect on this, I bring up a recent lawsuit against Tesla, where the petitioner claimed that some Tesla cars accelerate suddenly causing crashes. A similar lawsuit was filed a few years ago against Toyota, however, as opposed to Toyota who took few months to investigate and finally conclude the claims are baseless, the response of Tesla was swift and complete denial. The immediate outcome was a share price spike in Tesla’s case and a sharp decline in Toyota’s case. Probably Tesla’s assessment of the impact and likelihood of the actual problem was carried out and led to their swift denial. If you were a Tesla executive, would you handle the issue differently? Please explain.
To complete this assignment, you must do the following:
Question 1: Create a new thread. As indicated above, assume that you are Tesla executive, would you handle the <a href=”https://www.homeworkgain.com/downloads/health-insurance/”>lawsuit</a> differently? How would you use PM-squared risk scorecard process to handle the crisis?
– 400 words
NOTE: These discussions should be informal discussions, NOT research papers. If you MUST directly quote a resource, then cite it properly in APA formatting.
– Strictly No plagiarism
Question 2: Select AT LEAST 2 other students’ threads and post substantive comments on those threads, evaluating the pros and cons of that student’s recommendations. Your comments should extend the conversation started with the thread.
Tesla’s decision to respond to the claims in a swift manner and completely denying the allegations is not a good decision without due diligence after a thorough investigation. There is no doubt that if the executive conducted adequate investigations, the company would have come up with results whether positive and negative that would have made the company develop a policy to prevent such allegations in the future. If I were the company’s executive, I would have first led the investigations to identify the risk. This step would have helped the company to uncover, recognize, and describe it (Phillips, Bothell & Snead, 2012). In order to do this, I would have used project risk register to not only identify the alleged risk but to also identify any other risks that might be available.
The second step would have been analyzing the risk with the intent of determining the likelihood as well as the consequences of identified risks (Phillips, Bothell & Snead, 2012). Instead of the executive dismissing the allegations that the high-speed acceleration causes crashes, this was the opportunity to analyze the allegations. The third step would have been evaluating or ranking the risk. This means that the investigations would have helped the company to identify both the likelihood and the consequences. This is the step to determine whether the allegations were serious to warrant actions to be taken.
The fourth step would have been the treatment of the risk, popularly known as the risk response planning which would have helped the company modify the risk in order to rectify the situation (Phillips, Bothell & Snead, 2012). The fifth step would have been to monitor and review the risk. After some remedies have been applied to the identified risk, it would have been important to ensure that the remedies work properly.
Phillips, J.K., Bothell, W. T. & Snead, G.L (2012). The Project Management Scorecard. New York: Routledge.
If I am a Tesla executive then I would have handled the same way Tesla has handled this crisis. Tesla denied unintended acceleration charges by swiftly releasing a denial report. In the report they clearly stated, they investigated every single incident including customer complaints on unintended acceleration periodically and confirmed car functioned as designed (Tesla team,2020). According to me, Tesla’s effective ERM implementation including performance management and strategy for claims and also an action plan for future risks helped them to release a swift denial report with accurate details on their investigation. I think this immediate denial report by Tesla improved the creditability and trust of them by customers which makes the price spike in Tesla’s shares. This is a great example of how an effective ERM implementation plays a major role in the organization’s overall success. In order hand, it seems Toyota did not implement an effective ERM to handle this kind of clams immediately.
If I need to handle this kind of crisis using PM squared risk scorecard process, I’ll use their six steps methodology. First I will work on the weighting of goals for claims as to the highest priority. Then identify the risks for these and score their likelihood and Impact. Any claim which has high impact and likelihood should be addressed immediately. I’ll also evaluate the current process of handling this kind of claim and score them. Also identify future initiatives and future mitigations (Fraser, Simkins, & Narvaez, 2015). I believe Tesla already had an effective ERM implementation like a PM-squared risk scorecard. I think the reason for the Toyota crisis was they didn’t have an ERM like a PM squared risk scorecard process to handle this kind of claim. As they took a few months to investigate the claim they lost the credibility from customers and Toyota’s share price sharp declined.
Fraser, J., Simkins, B. J., & Narvaez, K. (2015). Implementing enterprise risk management: case studies and best practices. Hoboken: Wiley
Tesla team(2020, January 20). There is no “unintended acceleration” in Tesla vehicles. Retrieved from https://www.tesla.com/blog/no-unintended-acceleration-tesla-vehicles