Chapter 31 presented a mini-case study on ERM and risk. Sup…

Chapter 31 presented a mini-case study on ERM and risk. Suppose an organization wants to replace one of their traditional lines of vehicles with all electric models. How could the organization assess the major risks to this decision? Provide a brief discussion of each risk, and your assessment of the levels of inherent, current, and residual risk. A) Create a new thread. As indicated above, ANSWER ALL OF THE QUESTIONS ABOVE IN YOUR THREAD B) Select AT LEAST 3 other students’ threads and post substantive comments on those threads, . Your comments should extend the conversation started with the thread. ALL original posts and comments must be substantive. (I’m looking for about a paragraph – not just “I agree.”) NOTE: These discussions should be informal discussions, NOT research papers. If you MUST directly quote a resource, then cite it properly. However, I would much rather simply read your words

In assessing the major risks associated with replacing traditional vehicles with all-electric models, the organization should consider several key factors. Firstly, one of the major risks is the technological risk. All-electric vehicles are relatively new in the market, and there may be uncertainties regarding their long-term performance, reliability, and maintenance costs. There is also a risk that the technology could quickly become outdated as advancements in electric vehicle technology continue to evolve. The level of inherent risk for this factor can be considered as medium-high because of the uncertainties and volatility associated with new technologies.

Secondly, the organization should evaluate the financial risk. Investing in the infrastructure required for all-electric vehicles, such as charging stations, may involve significant upfront costs. Additionally, the organization must consider the potential impact of fluctuating electricity prices on operating costs. The level of inherent risk for this factor can be considered as medium because of the financial uncertainties associated with the transition to all-electric vehicles.

Another major risk to consider is the market risk. The organization should thoroughly analyze the market demand for all-electric vehicles and assess whether there is a sizable customer base willing to purchase these vehicles. This includes evaluating factors such as consumer preferences, government incentives, and infrastructure development for electric vehicles. The level of inherent risk for this factor can be considered as high because market conditions and consumer preferences can change rapidly.

Moreover, the organization should assess the environmental risk associated with this decision. While all-electric vehicles offer environmental benefits in terms of reduced greenhouse gas emissions, there may be other environmental concerns to consider. For example, the production and disposal of batteries used in electric vehicles could have adverse environmental impacts. The level of inherent risk for this factor can be considered as medium because the overall environmental impact of all-electric vehicles may vary depending on various factors.

Additionally, the organization should evaluate the operational risk. This includes considering the availability and reliability of charging infrastructure, potential disruptions to the electricity grid, and the impact of weather conditions on the performance of electric vehicles. The level of inherent risk for this factor can be considered as medium because operational challenges can arise during the transition to electric vehicles.

Overall, the inherent risk associated with replacing traditional vehicles with all-electric models can be considered as medium-high due to the technological uncertainties, financial implications, market conditions, and environmental considerations. The current and residual risk levels would depend on the organization’s ability to effectively manage these risks through strategies such as thorough market analysis, financial planning, technological partnerships, and contingency planning.