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Disasters as Opportunity Hurricanes Fran and Floyd in Kinston, North Carolina
CASE STUDY
Disasters as Opportunity: Hurricanes Fran and Floyd in Kinston, North Carolina
The city of Kinston, like many of the cities and towns in eastern North Carolina, is reliant on agriculture and the distribution of these goods to market. Kinston and much of eastern North Carolina, has been facing a declining economy and a loss of jobs. The growth rate in the city has been relatively flat for the last 40 years. Many of those who chose to stay represent low and moderate-income individuals and families with fewer opportunities to find work elsewhere. This has caused a downward spiraling effect: a declining central business district, an increased difficulty in providing necessary public services, and therefore, a reduced quality of life.
Hurricane Fran, which struck in 1996, served as a catalyst for positive change. The widespread flooding that followed, triggered substantial sums of recovery funding to assist the city rebuild. The city aggressively pursued recovery aid while developing an array of recovery planning documents to assist the city capitalize on what was viewed as an unprecedented opportunity. The recovery planning process sought to prioritize ongoing, preexisting community actions with new recovery challenges. It became evident that many local pre-disaster strategies were complimentary with the programs available post-disaster. The planning process facilitated the identification of specific needs and innovative approaches that maximized the connection between disaster recovery and economic revitalization, the provision of affordable housing and enhancing local educational opportunities. The creation of a specific plan guiding redevelopment actions, however, was not created in the traditional sense. A collection of documents were written and the principles of adaptive planning were applied. Elected city officials allowed technical experts in the planning department to develop strategic and long-term processes to achieve agreed upon objectives. This approach provided significant autonomy to those tasked with the development of an overall recovery strategy. Planning and grants management expertise among city staff was crucial to the development of meaningful recovery plans and the means to implement them.
Kinston learned important lessons from Hurricane Fran and applied them when Hurricane Floyd struck three years later. Perhaps the most important lesson learned was how to effectively utilize all available recovery funds to achieve multiple community goals, including the effective incorporation of sustainable redevelopment into the recovery process. Following Hurricane Fran, Kinston represented the most significantly impacted municipality and largest buyout effort undertaken in North Carolina. All told over 360 homes, three mobile home parks and 68 vacant lots were slated for acquisition. When Hurricane Fran struck North Carolina, FEMA Region IV, the North Carolina Division of Emergency Management and local governments were inexperienced with large-scale acquisition projects. Over time, FEMA, the state, and local governments gained valuable experience that was applied during the Hurricane Floyd recovery process.
Following Hurricane Floyd, the city sought to acquire over 300 additional homes. Many of these had been flooded during Fran, but homeowners chose to remain in the floodplain. Others sought to be acquired following Fran once they realized that the federal/state program was resulting in the acquisition of friends and neighbors in their community. Many initially expressed skepticism that the government program would be implemented. As neighbors began the relocation process, the program became real to those that chose to stay. As a result of significant public interest, the city developed a project application that would be submitted to the state should additional funds become available. This proactive approach paid off when Hurricane Floyd struck three years later. The pre-developed application, containing over 200 homes, was approved two weeks after the storm passed. When compared with the one-year approval process following Fran, the rapid turnaround time was indicative of significant process improvements and the pre-storm identification of eligible participants.
A stated objective of the Kinston Recovery Plan was to clear the floodplain of development, a very progressive notion in North Carolina given the reluctance of many local governments to aggressively limit growth in the floodplain. When complete, it is estimated that between four to six hundred acres will be acquired. Thus a key question became – what to do with the purchased land? A conservation zone was established in the area, turning the floodplain into a state educational forest, the only one in eastern North Carolina. The project served as part of a larger attempt to turn the area into a tourist destination, particularly in light of the number of people who pass through Kinston on the way to the beaches of coastal North Carolina.
In an attempt to avert a serious loss of tax base, the city took a proactive approach to encourage homeowners slated for buyout to continue to reside within the city. The concerns surrounding the potential loss of residents following Hurricane Fran caused officials to establish the initiative Call Kinston Home. The program, established in 1998, brought together a coalition of local, state and federal agencies, non-profits and business leaders to create a marketing campaign aimed at enticing residents to stay in Kinston as part of a broader effort to revitalize existing neighborhoods through the construction or rehabilitation of new or existing housing stock. A key aspect of the program was to assist tenants become homeowners. The program, which was fully operational when hurricane Floyd struck, enabled the city to expand the current model to address additional redevelopment needs.
Race, the Buyout and Relocation
The City of Kinston can be generally divided into four broad quadrants based on two primary factors; race and income. In Kinston, the flooding associated with hurricane’s Fran and Floyd disproportionately impacted poor black residents. The lack of available housing before the flood was significantly increased, due to the buyout of hundreds of low income homeowners and tenants. Thus, the need for affordable housing increased dramatically. The scale of the buyout was so large relative to the city’s population and existing infrastructure that schools serving areas subject to the buyout eliminated the concept of a neighborhood schools system. The city is attempting to encourage development in the north east part of town where adequate educational facilities exist.
Generally speaking, the southern part of Kinston is comprised of low income black families, while the north houses predominantly middle and upper income residents, that are both black and white. Included in the north east quadrant are a significant proportion of middle income blacks. Following Hurricane Floyd, the city recognized that it would have to build a substantial number of new houses to accommodate victims who were bought out and wished to remain in Kinston. One plan was developed that sought to relocate families from the south east to the north east-side of town. In both cases the neighborhoods were predominantly black. Citizens who lived in the established neighborhood strongly objected to this approach, claiming that the type of housing proposed would lower existing home values. In fact, homes of similar size and vernacular were proposed to be constructed. Local officials suggested that disaster victims had a certain stigma attached to them, and as a result, were not welcomed into existing neighborhoods. The proposed effort was ultimately discontinued. An additional project was constructed that relocated disaster victims from the south west to North West part of town. In this case, it appears that race is playing a factor in community opposition. The North West part of Kinston is comprised of predominantly white middle and upper
The City of Kinston Urban Growth Plan:
Linking Mitigation, Recovery and Sustainable Redevelopment
The City of Kinston has linked issues of growth management, disaster recovery and hazard mitigation. Four primary principles guided this approach:
Mitigation should be incorporated into all aspects of city planning and redevelopment following a disaster;
Economic development should recognize that making the entire community less vulnerable to the effects of natural hazards is good business;
Smart growth practices should be incorporated into the locally adopted “urban growth plan;” and
Disaster recovery funding provides a key means to achieve desired community goals.
The Urban Growth Plan focused on several broad policy objectives, including housing and residential development, economic development, public facilities and utilities, agriculture and rural development, parks and open space, and natural resources and the environment. Perhaps most significant, from a land-use perspective, the Plan linked “primary, secondary and tertiary” uses with areas identified outside of flood hazard areas. Incentives and disincentives were established that guided future development away from flood-prone areas. For example, the city’s Capital Improvement Plan, established differing levels of infrastructural assistance to developers based on the proposed site relative to the city center (which was outside the 100-year floodplain) versus outlying areas, many of which were in the heart of the floodplain.
Following Hurricane Fran the city placed a moratorium on future development in the floodplain. This was due, in part, to a state-imposed moratorium on future sewer connections to the primary waste water treatment plant, which was regularly releasing waste into the Neuse River. This provided an opportunity for the city to address a state-mandated requirement, while implementing an effective growth management tool to limit future flood-related damages. In the aftermath of Fran, some property owners questioned the approach taken by the city, citing the apparent limits placed on future growth. Yet after Floyd, property owners recognized that they too no longer wanted to live, nor support future development in an area that was so vulnerable to flooding.
Housing and Employment Leading People to Success (HELPS), and Call Kinston Home: Implementing Locally-Driven Initiatives
A key part of disaster recovery involves the provision of aid to individual homeowners. Existing federal programs are generally not meant to “make people whole” following a disaster. Rather they are intended to assist people get back on their feet. In North Carolina, additional state programs were created to fill the gaps in federal aid. In Kinston following Hurricane Fran, the city sought to take this approach one step further, capitalizing on existing sources of funding and packaging local assistance to achieve multiple goals. Initially, selected officials questioned why the city was “in the housing business.” Yet it had become clear that the need for low and moderate-income housing was not being addressed by private developers, who asserted that the construction of low income housing was not a profitable venture. As a result, the housing stock needed to relocate displaced disaster victims was not being built. Eventually, local officials were able to convince members of city council that taking advantage of new state recovery programs made sense if the city wanted to retain their population and tax base.9 Two locally-driven programs exemplify this approach: Housing and Employment Leading People to Success and Call Kinston Home.
The Housing and Employment Leading People to Success (HELPS) linked the acquisition program, the provision of job training and the movement of tenants to home ownership as a means to promote self reliance. Training programs focused on building construction, the rehabilitation of existing housing stock, and the “deconstruction” or recycling of useable materials from homes slated for acquisition.10 A common problem following disasters impacting low and moderate-income communities is the ability to find construction firms that are willing to focus on the repair or replacement of this type of housing stock. This problem can be particularly acute in rural areas. Profit margins are typically lower when compared to the construction or repair of more expensive housing. In an attempt to address this concern, Kinston sought to create locally-based expertise that would be willing to fill this niche market, thereby addressing localized recovery needs and creating jobs for those living in the area.
9 The physical relocation of disaster victims to new housing presented several challenges to local officials, victims and elected officials. Local officials were faced with the identification of suitable replacement dwellings and attempts to relocate entire communities, thereby maintaining established neighborhood ties. Individuals were given a range of relocation options in an attempt to meet their social and economic needs. The large-scale relocation effort had political implications as well. The movement of large numbers of people from one voting district to another resulted in some elected officials questioning the motives of redevelopment efforts.
10 The deconstruction process involves salvaging materials that could be used in other construction projects. Materials may include flooring, doors, cabinetry, windows, framing material, molding, bricks and other items. In the case of flood-damaged housing, salvageable materials used in home construction should not include those damaged by floodwaters. As a general rule, the deconstruction of four homes results in the materials necessary for the construction of one home. An additional benefit of this process is the significant reduction of demolition debris sent to the landfill.
Identifying and training the people that can assist in the redevelopment of needed housing stock was an important first step. Call Kinston Home represents the second phase, encouraging economic investment and revitalization in the central business district and adjacent neighborhoods. Creating the economic stimulus for new housing construction involved a broad coalition. Members included the Kinston Housing Authority, Lenoir County Community College, the Chamber of Commerce, local, state and federal officials, Habitat for Humanity, North Carolina Homebuilders Association and private lending companies.
Linking Mitigation and Recovery Goals with Broader Community Objectives
Kinston officials had developed plans prior to Hurricane Fran that would address chronic problems such as a declining population and economy, loss of jobs, lack of safe and sanitary housing, and an overall decline in the quality of life among residents. The primary challenge facing Kinston was the lack of available resources to comprehensively address identified needs. While the city was successful in obtaining grants and loans to tackle a variety of problems, the amount of funding was not sufficient to comprehensively revitalize the city. When Hurricane Fran struck, city officials reviewed and amended their comprehensive plan, emphasizing ways to connect recovery programs to pre-identified goals and objectives. This required analyzing program eligibility constraints and pre-identified community needs. Once completed, the plan provided a roadmap for local officials linking recovery funding with pre-identified community goals. A massive influx of state and federal money followed, bringing major physical, economic and societal change. Several community officials have noted that Hurricanes Fran and Floyd “were the best thing that could have happened to the city.” Following Hurricane Floyd, the city created and adopted a hazard mitigation plan to more clearly delineate risk reduction strategies alluded to in the Urban Growth Plan. Specific objectives included enhancing standards identified in the Local Flood Damage Prevention Ordinance, expanding the use of buyouts to acquire flood-prone properties and increasing the size and number of floodplain conservation areas, creating a Redevelopment Plan to guide the post-Floyd rebuilding process, citing new communities in areas facing lower flood risk, and reassessing the accuracy of current flood maps.
Multiple disasters allowed the city to implement long-standing goals of economic revitalization and development, enhance recreational and tourism opportunities, address serious environmental concerns, and improve the overall quality of life in Kinston. Post-disaster funding enabled the city to acquire over 400 hundred homes,11 develop new communities that focused on replacement housing for disaster victims, relocate a flood-prone waste-water treatment plant, and acquire automobile junkyards located in the floodplain. These actions necessitated developing innovative strategies to assist individual disaster victims and the community as a whole through partnerships with state historic preservation groups, faith-based volunteer groups, the North Carolina Division of
Emergency Management, Division of Water Quality, Division of Community Assistance and the Hurricane Floyd Redevelopment Center.
Summary and Conclusions
In Kinston, the capacity of local government officials extended beyond the administration of post-disaster grant programs. Staff proactively developed innovative strategies to address pre-identified local needs. The complex and often confusing process of recovery and redevelopment were learned over time as a result of Hurricane Fran, and honed during the recovery following Hurricane Floyd. Kinston officials realized how to coordinate funding sources to achieve existing and future goals and objectives delineated in their Comprehensive Plan. The large influx of disaster aid provided heretofore unprecedented opportunities. When Hurricane Floyd struck three years later, the city had developed a strategic vision whose goals included clearing the floodplain of development, guiding development away from known hazard areas, revitalizing downtown, expanding the quantity of affordable housing, and improving the overall quality of life for the citizens of Kinston. In order to achieve these aims, Kinston effectively capitalized on existing technical and political support.
Cultural Theories and Global Development (2)
Cultural Theories and Global Development
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Introduction
A cultural theory is a term used to describe the unique and varied efforts used to conceptualise a greater understanding of cultural dynamics. Ait involves the manner in which culture relates with nature and the society in general. Different people are responsible for the cultural transformation of their respective societies. In Britain for instance, Raymond Williams and E.P Thompson were very influential in their current culture (Urip, 2010).
After the end of the Second World War there was a global peace and the focus was shifted from war to cultural stability. The cultural practices by a great margin determine the processes in the business and societal systems. The decade between 1970-1980, there was a closer examination of how rapid Japan rose from ashes to become a great nation over a short time (Adair & Brett, 2005). The current global trend is now focusing on China, a country whose economic prosperity is fast growing. The bombing of the world trade centre in 2001 led to the emergence of a critical re-examination and re-evaluation of the world cultures (Coombs & Holladay, 2012). The rise of globalisation has resulted to a closer look at the constraints and limitations of some cultures together with their effects on business and commercial systems. Cultural differences enhance a holistic view during negotiations that in the long run result to cooperation and even competition.
Transactional negotiations that link up competitive and cooperative behaviours are divided into four sections which are relational positioning, classification of the problem, examining of possible solutions then lastly finding a solution.
The negotiation theory not only does promote cooperation but it also promotes problem solving. Personal value, trust and authority are promoted. Proper understanding of those a negotiator represents is critical in knowing what are the priorities of the people he/ she represent. If the subjects have a contrary opinion to that of the negotiator then the rule of the people works here. The desires and wishes of many have to be considered first. Negotiators have to frequently negotiate with those they represent to ensure that their demands are met. This is done to reduce incidences where the subject’s needs and requirements are met in the best manner possible.
Good negotiation skills can be critical especially for cooperates that need to market their brands in new markets (Adair & Brett, 2005). Good negotiators will convince the consumers in the new market that the products they are going to consume are of high quality and they are being offered at the correct prices that are affordable. Negotiators too are essential in peace making talks and preventing of conflicts and wars. Good negotiators are a great in advertising the company’s brand and promote their products and increase their products reach to the consumers. In most parts of the world conflicts between nations or communities within a country may arise. The presence of negotiators may help cool down the building and rising anger among their subjects. Peace talks are agreed with the best interests of the conflicting parties taking centre stage. Compromising of stands is important during peace negotiations. The hard stands are compromised to accommodate each other’s interests.
The Hofstede model that focuses on branding and advertisement strategies is influences people’s cultures and consumers perception of the brand (De Mooij & Hofstede, 2010). The model expounds the variations in the concepts relating to self, personality and identity. It helps in developing the interpersonal systems of mass communication and the manner in which the advertisement is to be done (De Mooij & Hofstede, 2010). The study of human behaviour takes centre stage when identifying and evaluating the best manner in which the brand can be designed to fit to the culture, habits and believes of the targeted population. The advertisement of the brand should cut across all the cultures of the targeted state or nation. Proper designing of the global brand image and proper skill in strategizing are critical in benchmarking the market performance of the brand both at local and global markets.
The target population cultural values and the manner in which they interact with their environment by a big margin determine the type of advertisement that should be adopted (De Mooij & Hofstede, 2010). Through defining patterns of cultural models, basic problems affecting people are identified. The model ranks countries on the basis of power distance, masculinity/ femininity, avoiding uncertainty, collectivism/ individualism as well as short or long term orientation. The scale is between 0- 100 and these factors help determine the advertisement strategy to be used based on the county’s rank (De Mooij & Hofstede, 2010). A brand should be designed to be able to relevant and marketable to the target market both on short term and long term basis. Understanding the growth and transformation of children during their development is a boost in the understanding of collectivistic model. The child in USA and China show a variation in their early childhood transformation and growth.
On the other hand the excitement and joy perception also varies because in the USA for instance, happiness and joy is associated with pride and superiority whereas in Far East countries such as Japan feeling good is determined by friendship (De Mooij & Hofstede, 2010). The models portrays that collectivists are relationship oriented whereas individualists value and categorise their objects on the basis of rules and properties. Proper understanding of the subject’s believes and cultures bring an expansive understanding of the Hofstede model (Agarwal, 2008).
Trust is questionable notion. Humans are created in a manner that they embrace sharing. Language, trust, a sense of belonging and identification are among the common virtues shared. Trust transforms the creating of proper and healthy competitions, while at the same time create a good and favourable environment for teamwork. Lack of trust may result to a non-functional organisation which in due process, fails to reach its intended goals. The British Airways are an example of a company that was transformed from an underperforming company to an excelling global brand. Sir Colin Marshall who was then the head had a vision of making a tragic transformation and making the company a success (De Mooij & Hofstede, 2010).. Proper motivation, understanding and dedication of the workers motivated them to work towards achieving Sir Colin’s dream. While at first the dream seemed unachievable their determination helped them move a milestone.
Steve Miller, the onetime head of Royal Dutch/ Shell Group enrolled for a program that would help him explore, identify and be opportunistic of the global market he created a team of 6-8 persons to make the dream a reality. He assured his staff that they would get financial support only if they worked extra hard to achieve their director’s dream. A frequent assessment and identification of success and failure was essential in improving the workers accountability and delivery. The running and exploring and venturing of markets in the world require that the director should be well devoted and motivate his/ her staff. Accountability and frequent assessment of the workers’ performance enhances efficiency and a further increase in the profit margin while the operational cost is also reduced (Coombs & Holladay, 2012).
The corporate social responsibility (CSR) has three approaches which all are centred around profit making. Businesses are viewed to hold a range of both economic and civil responsibilities during their operations (Adair & Brett, 2005). The theoretical approaches to these responsibilities are the corporate social responsibility, triple bottom line and the stakeholder theory (Agarwal, 2008).
The corporate social responsibility theory focuses on making money with the interaction with the community also included. The second perspective is profit making while putting into consideration the community’s welfare (Schwartz, el al 2007). The CSR is further obligated into four parts which are the economic responsibility, legal, ethical and philanthropic responsibilities. The four responsibilities interlink and relate to each other. The responsibilities provide a guide on the manner in which firms can survive a decline and still fulfil their economic obligations.
The triple bottom line dictates the manner in which corporate leaders should tabulate their results on the basis of costs versus revenue (Coombs & Holladay, 2012). The three columns concerning responsibility should be separately kept and with results being reported independently while the second part requires the company to obtain sustainable results. Economic sustainability in this context means long term business planning and investment. Social sustainability on the other hand aims at striking a balance between how people live and interact with one another. This system aims at bridging the gap between the exceedingly rich and the poor.
Conversely, environmental sustainability is centred on the sustainable use of resources with the goal of ensuring that the future generations also utilise the resources we use at present (Schwartz, el al 2007).
The stakeholder theory was described by Edward Freeman on the basis of corporate social responsibility. The theory describes the kinds of businesses and organisations that may be affected by the business’ plans and ambitions. The collective bottom line outlines the consequences that may face the company’s major stakeholders.
Conclusion
Various aspects of everyday life enhance our ethical and cultural behaviours. While many commercial companies would like to explore and conquer new markets than their competitors, proper strategy and implementation of good planning are key in winning the confidence of the target market (Agarwal, 2008). In this case, companies employ the use of good negotiators who play a big role in popularising and marketing the brand. A distinct and unique brand automatically becomes appealing to the consumers (Schwartz, el al 2007).
Planning on short and long term basis ensure that both short term and long term goals are achieved. Proper management strategies are also and good leadership are important in transformation of a company from underperforming to a great global commercial brand. An example is the manner in which people like Sir Colin Marshall transformed the British Airways from an underperforming airline to one of the world greatest airlines. Another example is how Steve Miller, motivated his workers at the Shell company and they cooperatively worked to make Royal Dutch/ Shell Group a global commercial brand (Urip, 2010).
The corporate social responsibility (CSR) on the other hand works to interlink all forms of sustainability ranging from economic, social and environmental are achieved (Agarwal, 2008). It also ensures that the stakeholders’ theories and collective bottom line are achieved. The responsibilities are divided into the triple bottom line, stakeholder theory and lastly corporate social responsibility (CSR).
References
Adair, W.L., & Brett, J.M. (2005). The negotiation dance: time, culture, and behavioural
sequences in negotiation. Organization Science, 16(1), 33-51.
De Mooij, M., & Hofstede, G. (2010). The Hofstede model: Applications to global branding
and advertising strategy and research. International Journal of Advertising, 29(1), 85–110.
Schwartz, S. J., Zamboanga, B.L., Rodriguez, L., & Wang, S.C. (2007). The structure of
cultural identity in and ethnically diverse sample of emerging adults. Basic and Applied Social Psychology, 29(2), 159-173.
Javidan, M,. Dorfman, P. W., Sully de Luque, M. & House, R.J. (2006). In the eye of the
beholder: cross cultural lessons in leadership from project GLOBE.Academy of Management Perspectives, 67-90.
Agarwal, S. (2008). Corporate social responsibility in India. Los Angeles: Response.
Coombs, W. T., & Holladay, S. J. (2012). Managing corporate social responsibility: a communication approach. Malden, MA: Wiley-Blackwell.
Urip, S. (2010). CSR strategies corporate social responsibility for a competitive edge in emerging markets. Singapore: Wiley.
EVALUATING RISK AND DECISIONS A REVIEW OF THE CHINA COMMUNICATION AND CONSTRUCTION COMPANY
EVALUATING RISK AND DECISIONS: A REVIEW OF THE CHINA COMMUNICATION AND CONSTRUCTION COMPANY
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Table of Contents
TOC o “1-3” h z u 1. Introduction PAGEREF _Toc86323305 h 22. Occurrence of Risks in Relation to Economic and Legal Implications PAGEREF _Toc86323306 h 22.1 Definition of Risk PAGEREF _Toc86323307 h 22.2 Difference between Risk and Uncertainties PAGEREF _Toc86323308 h 32.3 Origins and Nature of Risks PAGEREF _Toc86323309 h 32.4 Business and Societal Setting PAGEREF _Toc86323310 h 32.5 Identification of Risks in the Context of Economic and Legal Implications PAGEREF _Toc86323311 h 42.5.1 Compliance Risk PAGEREF _Toc86323312 h 42.5.2 Hazard Risks PAGEREF _Toc86323313 h 42.5.3 Control Risk PAGEREF _Toc86323314 h 52.5.4 Opportunity Risk PAGEREF _Toc86323315 h 53. Risk Management Plan PAGEREF _Toc86323316 h 53.1 Control Measures PAGEREF _Toc86323317 h 63.2 Corrective Measures PAGEREF _Toc86323318 h 83.3 Record Keeping and Review Frequencies PAGEREF _Toc86323319 h 84. Conclusion PAGEREF _Toc86323320 h 9References PAGEREF _Toc86323321 h 10
1. IntroductionThis is a report covering a deep insight of the China Communication and Construction Company to uncover the major and minor risks that are associated with the company in its operations within China. These risks are discussed in terms of their geographical nature and the impact they have to the company. The company operates in China, a fairly stable economy that uses a mixed controlled and open approach to regulation.
2. Occurrence of Risks in Relation to Economic and Legal Implications2.1 Definition of RiskRisk refers to the likelihood that someone or something will suffer harm or loss from a particular event or occurrence (Kuznetsova, 2019). It may also come out as the probability that a certain situation will lead to damage. According to Shad et al. (2019), a risk can is bound by measurable probabilities that are used in speculation or basic calculation and determination the possible likelihood of the event occurring and the amount of harm or loss that can be expected in case it happened.
2.2 Difference between Risk and UncertaintiesThe major and distinctive difference between a risk and uncertainty is within their possible outcomes and the possible occurrence of these outcomes. A risk represents a situation in which both the outcomes to the situation and the possibility of these occurrences are known to the investigator and they can be measured to ensure effective decision making (Kundzewicz et al., 2018). Whereas for the uncertainty, both the outcomes of the situation and their possibility of occurrence are not known and cannot be obtained by the investigator.
2.3 Origins and Nature of RisksThe nature of risk is interpreted according to the expected harm from the risks (Adeleke et al., 2018). The analysis of risk is put in classes of the sectors that may be impacted by the occurrence of the outcomes of the risk. In reference to the China Communication and Construction Company and the entire study around the risk analogy, the nature of risk in put in terms of: the market aspect, the legal aspect, the physical aspect and the financial aspect. da Silva Etges and Cortimiglia (2019) put these four aspects into four major categories to represent the whole nature of risks. These categories include; compliance risks, control risks, opportunity risks and hazard risks.
2.4 Business and Societal SettingThe China Communication and Construction Company is a multinational publicly traded company with its headquarters situated in Beijing, China. The company has the majority owner as the State to which the company anchors. The company is set in the Engineering and Construction industry offering major design and construction services all over the world. Standing at an approximate revenue of 70 billion dollars (China Communications Construction Company n.d.), the company possesses the capacity to offer construction activities such as Highways and Bridges design and construction, Port Construction, Airports design and construction, Railway construction, Oil mining platforms design and construction among many other developmental and high end infrastructural design and construction (Huang, Yang, & Zeng, 2020).
The multinational basis of the China Communication and Construction Company makes the company interact and impact a number of societies with different diversified composition of people. The basic society associated with the company is Chinese with a majority of the population consisting of the Chinese ethnicity however this changes when the company is contracted to work in other nations. With different nations the company interacts with different population of people with different languages and different practices. China Communication and Construction Company is exposed to as many cultural backgrounds and societal belief as the number of nation the world due to its worldwide operation nature.
2.5 Identification of Risks in the Context of Economic and Legal ImplicationsAccording to Polinkevych et al. (2021), four major aspects within which the nature of risk could be analyzed are brought out. This happens to be the major aspects within which the risk concept can be linked with the economic and the legal perspective. The China Communications and Construction Company also fall within these analytical suggestions of risk impact to the company and the link of the risk aspects to the economic and the legal parameters.
The economic and legal implications are an ever-present feature of the risk that China Communications and Construction Company takes. The economic risk can lead to the downfall of the organization. while it can be mitigated, it is impossible to negate entirely. Economic risks have an implication on the company’s ability to trade with other companies, to interact with suppliers, and it can create a long-term effect on the business’s ability to acquire the relevant components needed for success. Legal factors and implication point to the consequences and results of being in a legal issue. Legal risks include the risk of failing to know, or understand an issue, including an issue that is ambiguous or one with a reckless indifference. The application of the law to China Communications and Construction Company creates a relationship, one that may lead to reputational or financial losses.
2.5.1 Compliance RiskThis is the risk that results to a company suffering legal penalties, material loss and fines as when the company fails to comply to the set principles of operation, failure to follow stipulated internal policies and general failure to adhere to the set integrity practices (Dandage et al., 2018). For the China Communication and Construction Company, having the central operation position as Beijing, China requires the company to act under the regulations stipulated under the Chinese laws on the operation of companies and other organizations.
2.5.2 Hazard RisksThis risk category is associated with loss of material property (Aziz, 2020). It is felt from occurrences such as natural calamities for example floods, drought, earthquakes and tornados. Some of the occurrences are more prone to specific areas of the world than other however, due to the worldwide operation by the China Communication and Construction Company the risk occurrence distribution impacts the company’s operations worldwide. The flooding probability in China has been said to increase decade-wise, the last range of the increment was determined to be from 4.04% to 12.34% which indicates a higher chance of flooding in China meaning that the company in question is set to expect the occurrence of floods slightly often not only because of the percentage increase in the probability of occurrence but also due to the expectation in general increase of the flooding cases with decades (Schulte & Hallstedt, 2018). The impact that may be expected from the hazard risks is high since it affects the working equipment and the structural damage of projects leading to financial losses.
2.5.3 Control RiskControl risk involves the formulation of policies and management strategies for the safe driving of an organization or company in a way that can cope with the changing and unpredictable market (Xia et al., 2018). It is the risk that requires China Communications and Construction Company to adjust to market conditions and to be up to date with the external environment t. The Chinese market has been declared a high-risk and high uncertainty market especially with the high increase of the levels of FDI which has resulted to miscalculation of the entire market size and factors around it. For China Communications and Construction Company, the lack of proper data on the growth and the production level results to a market situation with very little ability of regulation and projection planning, increasing the general risk (Ullah et al., 2019). The China Communication and Construction Company is exposed to the lack of future proofing due to the high risk market proves a possible impact to the company by the risk situation.
2.5.4 Opportunity RiskOpportunity risk is the failure rate attached to an organization in case it takes upon a new venture. This may be in terms of branching to other areas or diversification of the business to introduce a new product of or service (Sum & Abdul, 2020). The size of the China Communication and Construction Company served as the cushion or mitigation measure for the occurrences attached to this risk. The size of the organization offers more resources to conduct research and investigation for relevant market data so that any decision or step there henceforth is statistical to avoid guesses and avoidable risk ventures (Panjehfouladgaran & Lim, 2020). The probability of the opportunity risk occurring is low however the impact of the same is high which may cost the company an entire branch or financial losses on initial investment costs on new product or services.
3. Risk Management PlanIn the preceding sections, China Communication and Construction Company has been investigated on the risks that are in direct and indirect effect to the company and the impacts these risks may carry. The section has shown that a risk is associated with a number of outcomes whose individual magnitude can be measured. The risks have been investigated with their relation to the economy surrounding China Communication and Construction Company both inland (within Chinese borders), and overseas in other branches of the company located in different countries and different economies subsequently. The section has also shown that in the case of an uncertainty situation the investigator can never have a specific strategy in dealing with the situation rather anything can be expected that no one is ready and prepared to tackle. The risks occurrences are also investigated in their compliance to the legal setting of the company’s locations. Having identified the major risks that are linked to the China Communication and Construction Company, this section presents the available mitigation strategies that are available useful in curbing the risks to protect the company from suffering the impact of occurrences from the risks noted.
3.1 Control MeasuresFrom the risks discussed above, it can be noted from the context that some of the occurrences have the power of impacting the company to cause a major loss of survival-threatening damage. To ensure thriving of the business, there has to be measures to be taken in ensuring the position of the company is protected from the environmental, legal, social and Economical perspective.
The legal department of the company should ensure that the operations within and around the company are in the total compliance with the respective laws. This is by ensuring that the products and services offered by the company are in accordance with the standardization regulation for customer protection and the environmental protection. For protection of the companies and the general public, the company, which is publicly traded, is expected to act under compliance of the company Law, The Law of Enterprise Income Tax, Basic Rules for the Enterprise Internal Control, Anti-Unfair Competition Law, Labor Contract Law and the Interim Regulations on Prohibition of Commercial Bribery. These laws are incorporated to serve the regulation purpose and enhance general compliance. For the China Communication and Construction Company, the possibility of the occurrence is generally low from the strict observation from the management and the legal department set to ensure compliance (China Communications Construction Company, n.d.). The company is also publicly traded and most of the ownership left to the state which ensures the compliance of the whole organization is at per for the interests of the government and the public at large.
The pricing of the products and services should all go hand in hand with the pricing act of the law (Gokmenoglu, Kirikkaleli, & Eren, 2019). And the general sustainability of the acquisition process and should be systematic in a way it ensure sustainability in the entire process. The Human Resource department should ensure compliance with the labor law as stated in the company law of the country. For every contract assigned, the labor acquisition should be checked in way that it respects and adheres to the labor law of the country. The company interaction in the market should be controlled to ensure protection of the company from Anti-Fair competition in tender winning and other multi-company involvement activities. The legal team should also study and understand the relevant laws of other countries in which the company works with or is starting to work with to avoid inconveniences when the company’s operations unintentionally assumes some regulations.
Project managers within the company should ensure that the safety measures are put in place I every project to avoid injuries and subsequent disasters from mistakes in safety measures ignorance. Proper fire-fighting equipment should be installed within the buildings of the company and other related buildings including the project sites. The company employees should also undergo necessary fire drills and other training first aid and other short medical care procedure in case of disaster. Projects in foreign countries should be thoroughly planned to accommodate any disaster expectation in the foreign land for example the case of tornadoes in The American Countries. This fore investigation ensures earlier preparations for the expected disasters which would help avoid injuries and at most save lives.
The marketing department and the data handling department together with the management should be in constant check of the statistics within the company operations and compare the current statistics with the previous ones to know and understand the position of the company against that of the prevailing economic climate. These should also use the data obtained for future planning to cope with the constantly changing market. This strategy ensures that the steps of the company are informed for thriving and progress and most of all adaptation to the prevailing market flow to maintain the current market share and even expand under right conditions. The management team and the data handling department should take proper steps in the investigation and projection of any major step in the company’s operations such as expansion or diversification to prevent unnecessary blunders
3.2 Corrective MeasuresThe management should always ensure harmonious working of the different departments to ensure effective information passage in the moments of updates and sensitive changes (Vekasi, 2019). The legal department should ensure they are always updated on the latest updates on the relevant laws and pass the information effectively to the relevant departments and personnel. This includes foreign laws, in countries that are in constant operations with the company and those starting their operation with company. Innovation within the design team should always be high to ensure the company maintains its market share for quality in the services offered (Han et al., 2018). Structural changes should also be undertaken within the working environment to accommodate relevant drills and ensure the health acts is strictly followed. Structural changes are also necessary when trying to curb any disaster such as fire outbreaks in working environment. Previous mistakes within the company should be noted and studied to help avoid the same mistake in future or any related mistake henceforth. The management should also consider foreign assessment or auditing from known companies to ensure the company is in the same position and direction as the internal auditing states.
3.3 Record Keeping and Review FrequenciesFor efficiency, the company must ensure proper record keeping which means the system and mode of keeping records should be such that the retrieval and access of the stored information is not interrupted and should not lose information (Chang et al., 2018). For China Communication and Construction Company, all incidents on law infringement within the company operation should be recorded in proper details and the number of occurrences to be used in decision making and for addressing the entire company personnel together with the public during the annual meetings.
The hazardous moments in the company’s lifetime should also be recorded accordingly and under the right variations. These records should indicate the occasions of flooding, fire, earthquakes among others. They should also indicate their locations and duration alongside the damage caused for future references and decision making. Market variations and changes should be recorded with their relevant variations and the effect they had to the company operations and the entire market at large. This information offers great reference in the future for projections and caution. Any major step within the company in terms of diversification and growth should be put in books with their relevant variations and the outcomes for better understanding in the future when the information is used for reference.
4. ConclusionThe China Communication and Construction Company being a very large organisation, should invest effectively on the risk study and mitigation. The organization with its size and value may be highly prone to assume proper running and production efficiency since it is difficult to identify any problem embedded in the large sections and department. Therefore to curb disaster the company should ensure proper check and study of various sectors in the internal and external environment both macro and micro to uncover risks and mitigate them for survival and thriving.
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