Identification of the Problem of the Earthquake in Japan - Case Study Example

Business case Report Name Institution Date Business case Report Executive summary Identification and analysis of a problem will facilitate a better decision making procedure. Earthquake in this case necessitates decision making which will enable a firm to recover after the tragedy. The strong earthquake that hit Japan, 520 kilometers distance from Tokyo affected the office, located at Rio Tinto Japan. This was on 11th March 2011after caused a number of issues that needed attention by our organization and other affected parties. The earthquake rigorously shook buildings and three times and sent aftershock waves afterwards that made buildings unstable. The strong impact of the tragedy was felt by residents in Tokyo including our office despite the fact that it struck an area 520 kilometers away from Tokyo. Among other things that were destroyed, the power system was malfunctioned. Operation of trains was also affected as a result of this especially those that entirely relied on the power system. Other devices using power supply were also affected including traffic lights buildings and the lighting system. Uncertainties also arise as a result of the earthquake. Uncertainty such as food availability for two to three days, fuel supply and prices, time taken for trains to start working and degree or level of damage were as a result of the tragedy. Post-earthquake decision on what was to be done on Monday was among the issues that faced where we were supposedly required report to office and resume business. This needed a viable decision making process considering alternatives, choices and best decision to help reconstruct the organization by repairing any damages. Decision making is also coupled with adequate implementation procedures and analysis of possible consequences. Business aspects like accounting, marketing, communication, business information systems, management, business law and economics. Effects of the decisions not only reflect on the business alone but also the general industry. Decision making The decision making process: Identification of the problem The main problem being investigated is damage of the power system and other damages caused as a result of the earthquake. The earthquake, which hit Japan at 520 kilometer difference from Tokyo tampered with the power system, business operation, train transport stem and other electric-oriented services. There is therefore need for decision making procedures to recover these systems including electric power system restoration after earthquake damages for the purpose of business and economic recovery. A viable process must be considered and implemented. There are a number of models applicable in reinstating the power system so as to recover the normal business operations; however, they also involve limitations and advantages. The information systems of business are likely to have been disrupted as a result of the earthquake. Economic state of countries’’ industries and business are the most affected in case of an earthquake1. Problem analysis The functionality of infrastructure system as a result of earthquake majorly interrupts economic activities2. Damage of the power system resulted to disruption of activities and other damages. For example operation of trains contributes to countries revenue and Japan economic growth. The duration of lack of services and interruption of business operations was a serious determinant of high degree economic disruptions resulting to indirect loses3. Communication was also affected as a result of power shortage and therefore inadequate access to stakeholders’ especially customers. Repair and recovery operations will require an outflow of the firm’s finances apart from damages covered by the insurance company. Inadequate communication with customers will also have an effect on the revenue flows thus reducing profits4. Vulnerability to effects of the neighborhood will might also limit the number of customers since they are affected. Power system malfunction will require manual and effective marketing procedures that do not rely much on power supplies. The laws and regulations governed businesses require that employers and employees discuss about reporting to work after such tragedies considering that it is unusual. Communication is therefore important. After the tragedy, one of the issues that the firm faced was what employees were to do on Monday if they went to office. Developing alternative solution The business operations might be suspended and employees allowed staying at home. However, the stakeholders, including the employees, executives, ownership of the business and their suppliers can decide to resume as fast as possible and reconstruct any damages made for the sake of main stakeholders who are their customers. Employers must consult with employees their decision to resume work as required by the law5. In case they resume, marketing procedures will be implemented to ensure that customers are aware of their recovery and ongoing services6. There is also need to consider whether to install back-ups for the business information systems or not to. Models that can be used to restore electric power and resume normal business and economic functioning include deterministic resource constraint, network, statistical curve fitting and Markov process. Statistical curve fitting involves empirical procedures as well as deterministic resource constraint. Markov process and network involve theoretical procedures. Network provides a prime long-term restoration solution unlike the three other models which provide solution for current situations that are short-term. Markov process considers all lifelines as a single urban system7. Risk management procedures can also be reconsidered or maintained as before the earthquake occurred. Selecting the best options Resuming work and working towards recovery as soon as possible is advantageous to both the employer and employees and other stakeholders. Communication is enhanced among the employer and their employees to discuss realistic solutions that will help recovery. The wages and salaries for employees who are able and ready to work are paid since not all workers will resume due to difference in their circumstances8. Willing suppliers will also resume and possible replacements done within the budget of the business. One-on-one customer relations will be enhanced and information on recovery will be communicated through posters, word of mouth and personal interactions, and advertisement since televisions are operating. Immediate recovery and remarketing will be resumed immediately since customers might be lost. Suspending business operations will also involve laying-off o employees who are willing to work that the business might never recover if they get employed by other firms. A back-up system for business information system will be appropriate in recovering information in case the system as a result of another earthquake or related tragedies in the future. The risk management procedure will be maintained but however adjusted since is efficient but needs improvement. Installing another system is expensive and might not be compatible with the current business system. Network restoration approach will be adopted to recover the power system since it’s a long-term approach. Power back-ups like generators and solar are also necessary. Implementation This entails converting the decision into action. Employees report on Monday morning with no time limit due to the effects of earthquakes as an indication of immediate resuming of work. In this case, business vehicles are the most appropriate means of transport to pick employees from their homes to work since most use trains and trains cannot function due to shortage in power system. Although no work can be done immediately on the first day at work, after the tragedy much time cannot be wasted. Meetings save that time that could rather be wasted in offices doing nothing constructive. Adjusting risk management system requires finances though not as much as implementing a new one. This involves preparation of a budget by the accounts department which provides the funds needed. The management will reschedule more meetings for executives and the employees to discuss more ways of full recovery. Marketing department should also submit their budget to the accounts department for intended marketing activities. The few employees in the department coordinated with each other through effective communication to meet marketing goals after the tragedy9 . The management and heads of departments including accounting met to review the risk management system and consider possible adjustments like back-up electric and information systems. Follow-up Despite the implementation, the management instituted follow up procedures through integrated arrangements and feedback systems. This includes open forums created by the management for customers to assess the number of customers who attended. Results of the quick recovery were positive since customers, suppliers and employees recovered faster. The rest of employees who failed to report reported afterwards and suppliers also resumed and although some were lost, the number was insignificant, especially main suppliers reported back. The accounting department was obligated with the responsibility of giving frequent reports on monthly intervals of the business financial position instead of the normal quarterly reports before the earthquake. According to the accounting department report, no significant losses were made after the earthquake and the little losses made were recovered within the same year. The back-up plans work well especially when power is lost during weekdays and working hours. The automatic system bridges the gap which could result to time wastage. Incorporating employee insurance in the risk management system also worked well since employees become more confident and motivated to work. As reflected by increased productivity. Monthly appraisal through interviews and open forums for all stakeholders was also instituted for feedback10. List of References Homburg, C., M. Artz, and J. Wieseke. (2012) Marketing performance measurement systems: Does comprehensiveness really improve performance? Journal of marketing. Francisco, A., and L. Heather. (2011). As frames collide: Making sense of carbon accounting, accounting, Auditing & Accountability Journal Ashcroft, P.A and R. Kaula, (2012). A labor negotiations case useful in an introductory business course, Academy of Educational Leadership Journal. Benmelech, E., Nittai K. Bergman, N.K. and Enriquez, J. (2012). Negotiating with labor under Financial Distress, The Review of Corporate Finance Studies Management practice & productivity: Why they matter. (2007). Centre for Economic Performance. London School of Economics, McKinsey & Company Lin, C. M, and Lee, C.K. (2012). Relations between free trade and economic protection: A game theory analysis. International Journal of Management 29(2): 591-605. Chua, R.Y.J. (2012). Building effective business relationships in China. Sloan Management Review Cagnan, Z and Davidson, R. (2004). Post-earthquake restoration modeling of electric power systems. Cornell.edu Read More