Would you consider it Samsung’s failure not to prepare for this worst-case scenario? Why or why not? As a member of Samsung’s FP&A team, what would you do differently for evaluating future products?
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We examine what might happen in the worst-case scenario, but the true worst case would involve a total disaster with extremely remote probability. We certainly would like to prepare ourselves for the worst possible outcome, but shall we make decisions based on something that is extremely unlikely to happen? Consider Samsung’s recent experience. Samsung was forced to recall 2.5million Galaxy Note 7 smartphones just one month after it was introduced because multiple reports on the phones caught fire, and eventually stopped all production in the following month. Some estimated that Samsung incurred a $5 billion write-off due to this fiasco.
- Would you consider it Samsung’s failure not to prepare for this worst-case scenario? Why or why not?
- As a member of Samsung’s FP&A team, what would you do differently for evaluating future products?
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- SENE ELL Co. recently recalled 6 million cars due to faulty third-party ignition switches that were linked to 13 deaths. For more than a decade, the company decided against a very inexpensive switch upgrade and continued to use the vendor’s ignition switches even though they did not meet the company’s performance specifications. A growing number of lawsuits ensued and company’s stock sank due to heavy media attention, congressional inquiries, and a Department of Justice criminal investigation. The most significant risk management lesson to date from the company recall is: CHOICES: A) An organization that ignores or mistreats its external stakeholders does so at its own peril. B) The Company failed to develop an ethical organizational culture that guided its strategic planning and daily operations. C) Cost-benefit analysis is an ineffective decision-making technique, as demonstrated in rejecting a 57-cent fix for the ignition switches. D) Reliance upon third-party vendors results…The CFO of PKD Corporation is very uncomfortable with its current risk exposure related to the possibility of business disruptions. Specifically, PKD is heavily involved in E-business, and its internal information systems are tightly interlinked with its key customers’ systems. The CFO has estimated that every hour of system downtime will cost the company about $10,000 in sales. The CFO and CIO have further estimated that if the system were to fail, the average downtime would be one hour per incident. They have anticipated that PKD will likely experience 50 downtime incidents in a given year due to internal computer system problems and another 50 incidents per year due to external problems—specifically, system failures with the Internet service provider (ISP). Currently, PKD pays an annualized cost of $150,000 for redundant computer and communication systems, and $100,000 for ISP support just to keep the total expected number of incidents to 100 per year. Required: Given the…Do you think that Sony’s response to the attack was appropriate? Why or why not? What might Sony and the U.S. government done differently to discourage future such attacks on other U.S. organizations? Are there measures that organizations and the U.S. government can take together to prevent both real-world terrorist violence and cyberattacks? According to a recent report by Gartner, most business users will have access to some sort of self-service BI tool within the next few years; however, Gartner estimates that less than 10 percent of companies will have sufficient data governance practices in place to prevent data inconsistencies across the organization. Why do you think so many companies continue to invest in new analytics tools without implementing governance programs that ensure data consistency?
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- Consider the following scenario: A hoverboard is a self-balancing scooter that uses body position and weight transfer to control the device. Hoverboards use a lithium-ion battery pack, which was found to overheat causing an increased risk for the product to catch fire or explode. Several people were badly injured from these fires and explosions. As a result, a recall was issued in mid-2016 on most hoverboard models. Customers were asked to return the product to the original point of sale (the retailer). Retailers were required to accept returns and provide repair when available. In some cases, retailers were held accountable by consumers, and not the manufacturer of the hoverboards. You are the retailer in this situation and must decide if the hoverboard scenario creates any contingent liabilities. If so, what are the contingent liabilities? Do the conditions meet FASB requirements for contingent liability reporting? Which of the four possible treatments are best suited for the…Due to the coronavirus pandemic, ShakeHands Company announced a decision to close a factory located in Sampaloc and terminate all 200 employees as a result of the decline in product demand due to the lockdown. The entity shall pay P40,000 per employee upon termination. However, to ensure that the windup of the factory occurs smoothly and all remaining customer orders are completed, the entity needs to retain at least 20% of employees until closure of the factory in six months. As a result, the entity announced that employees who agree to stay until the closing of the factory shall receive P75,000 payment at the end of the six months in addition to receiving their current wage through the period of closure on top of the P40,000. Based on this offer, the entity expected to retain 50 employees until the factory is closed. Compute the amount attributable to termination benefit. Compute the amount attributable to short-term benefit.In December 2019, a novel coronavirus outbreak was first documented in Wuhan, China. This virus triggered crisis for the global economy and markets including Ghana. With an escalating number of confirmed cases globally, the World Health Organization (WHO) declared the virus tobe a global pandemic, meaning that it will have a sustained global impact.In order to stop the spread of the Covid-19 outbreak, many countries across the world including Ghana implemented very tough measures such as introduction of travel restrictions, strict lockdown to try to contain the virus. The repercussion of these measures has been a total halt to major industrial production chains and as such affecting government’s tax revenue.Furthermore, some safety protocols such as the use of nose masks, the frequent washing of hands and the use of a 70% based alcohol sanitizer in sanitizing hands and also the practice of social distancing were recommended by World Health Organization to help stop the spread of the…
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