Business Capstone Video - Assignment Example

 Business Capstone Video Abstract The aim of this study is to identify the principal issues that CSC Australia is concerned about in the recent times. The main issues of the company are looked into and the causes of such issues are identified. The issues and causes are addressed by developing realist set of alternatives. The most viable alternative is chosen from the set and a decision making criteria is developed based on the evaluations. The alternatives chosen also help to formulate solutions. These solutions can be rejected or accepted. The preferred result is then justified. The study then makes strategies for implementing the selected alternative. The implications of the strategies are also studied to reach a conclusion. Table of Contents Issues 3 Causes 4 Alternatives 5 Decision Criteria 6 Recommended Solutions 7 Implementation and Implications 8 Reference List 10 Issues CSC Australia Pvt. Ltd. is a company that provides business solutions that are driven by technology. The company mainly caters to the public and private sector in Australia. While balancing the operations and interests of the stakeholders, the company has to face various issues. Michael Horton who works for CSC Australia, is one of the key personnel of the company. He manages various accounts for natural resources clients. The government clients are also looked after by him. In an interview, he described the issues being faced by the company. He stated that one of the primary issues of the company is related to liability capping which is negotiated at the start of any contract. Liability capping comes in the form of an agreement which restricts the amount of money that has to be paid by CSC in case the clients sue it during the breach of any contract or negligent of conditions set by a contract. This is an essential tool that helps the company to manage. Liability contracts can be very useful if they are properly evaluated and implemented. The exclusion of liability capping has some implications which can be evaluated. It is essential to understand the primary obligations mentioned in a contract. This can be related to the service that CSC would provide to his clients within the specified deadline. CSC also evaluates the losses that the government has to borne in case if the company fails to deliver the services mentioned in the contract. The magnitude of loss has to be determined. Then, it is the government’s responsibility to mitigate the effects of the loss. In case losses occur, CSC is liable to compensate its clients so that all direct and consequential losses suffered are recovered in the process. CSC has been deploying desktops to its client site and in the initial period the desktop requirements of the clients were done at the local corporate head office located in the capital city. However, the company has to now modify business operations in the next phase of the project which would require it to negotiate the terms of the contract. This negotiation is done because the company is now going out on site for deploying services. This service would be provided for an organization which deals with oil and gas. So, it would generally mean going onsite in the offshore locations. This involves a significant amount of risk. The risk is mainly related to environmental issues. The consequential losses would increase for the company in case the terms of the contract are not met. Capping of liability becomes an unfeasible option in such scenario as any misdeed or inappropriate operation by the clients will force CSC to incur huge losses. So the company is trying to take help of unlimited liability and give away with the idea of liability capping in the contract. This is the primary issue of the company which needs to be evaluated (Horton, 2014). Causes It is imperative for the company to identify the reason behind the occurrence of the issues. The primary issue that CSC Australia is facing is related to capping of liability. The principal concern of the company is that, if it accepts the policies of unlimited liability while negotiating contracts, it can be subjected to various threats. The acceptance of unlimited liability in the worst circumstances would mean that the customers would be allowed to claim the whole worth or value of the company. In case the company operates in a large scale, it becomes more difficult for the company to come out of such risks. This is due to the fact that, the value of the company is significantly high and the level of risks magnifies in such a case. The company has to take measures to prevent or mitigate such risks. This can be done if appropriate strategies are taken during the initial phase of the projects. CSC Australia delegates this duty to the salesperson working in the company. This person has the responsibility of negotiating the terms of the contract and reaching a situation which would be beneficial for both the customers and the company. The agreement should then involve capping of liability in such a way which would help to ensure that the customers are provided with the minimum level of liability capping that is acceptable for them. The agreement is also negotiated to ensure that the maximum level of liability capping that is tolerable by the company is maintained in the whole process. This is a scenario where an intensive risk return analysis has to be done and steps should be taken based on the evaluation of the scenario. The purpose of such analysis is to ensure that both the parties are satisfied and a win-win situation is reached (Horton, 2014). Alternatives It is essential for the company to develop a set of realistic alternatives to address the issues and causes identified. The company has to evaluate all the alternatives available in order to understand their significance. Thus, it is important to identify the viable alternatives. These alternative courses of action are discussed in this study. Firstly, the company should implement rules and guidelines which would ensure that the clause of association of the company with its clients and the issues related to the business are handled by a single member. It has to be seen that, the responsibilities do not get delegated to many people within the company or within the company of the client. This member should take care of the documentation process which involves reviewing the terms of contract and the conditions laid by the client. It is important to review the documents in order to mitigate risks associated with any fraudulent. The results of the review process have to be evaluated and policies related to review has to be set based on that. This would also enhance communication with the clients as the objectives of the association would be clearly understood (Lewis and Murdock 1996, 567-597). Secondly, CSC Australia should evaluate all the policies that can be used in order to manage the liability of the company. The feasibility of all such policies has to be analyzed and the policy that is compatible with both the parties has to be implemented while going into a contract. The extent of liability capping that is acceptable by both the parties has to be identified. In case if a solution is not reached through negotiations, a change in liability policy should be strategized (Johnston, Jason 1990, 615-664). Finally, it is essential for the company to negotiate rationally with the clients without affecting the interest of both the parties. Negotiation is important as it would help in stabilizing the business operations of both the parties (Prum and Del Percio 2010, 56). Decision Criteria The alternative courses of action have to be monitored to develop a set of criteria that would help to reach a decision. The most important alternative can be taking measures to change the policies related to capping of liability. The principal decision making criteria for selecting this alternative would be related to mitigation of indirect or consequential losses. It is beneficial for the company to acknowledge clauses which would make it liable to loss, which is negligible in nature. There are some policies which exclude and restrict any liability concerning economic losses which are consequential in nature (D'Aloisio 1993, 515-579). Economic losses have to be evaluated properly and it is very important to take measures to prevent the magnitude of such losses. Both the parties should pay equal emphasis to study the indirect economic loss. The type of loss also depends on the contract and its terms and conditions. Sometimes consequential losses can be absent and this can be reflected through the financial losses incurred by the company. This can be through the loss in revenue and profits. This would be then viewed as a direct loss to the company. The significant losses are difficult to prevent and cannot be recovered in most cases. The decision making criteria should be based on the approach that involves excluding the losses, which are already defined and identified. This involves loss due to improper management activities, loss due to ineffective production techniques and loss from high cost of supplies. Thus, the alternative method is associated with accepting liability policies for all losses which are direct and indirect in nature. However, this acceptance has to be done after evaluation of the scenario and then selecting a sensible level of liability or financial capping. The decision making criteria has to be based on the outcomes of evaluation of the selected alternative (Fischer 2003, 89-103). Recommended Solutions Based on the above alternatives and the associated decision making criteria, several recommendations can be given to the company. The recommendations should help to decide on solutions to the issues derived from the alternatives. All the alternatives are evaluated and justifications are given for the selection or rejection of a solution. The purpose is to identify a proffered solution (Seymour 1992, 491-571). One of the alternatives involves the review of documentation process. It can be recommended that a single person is given the responsibility to carry this review process. This would ensure that, fraudulent is identified and steps are taken to mitigate it. However, such a solution is difficult to implement when the large scale operation are involved. It is not possible for a single person to look at all issues. The other alternatives deals with activities related to negotiations with clients. This can be done by reaching a decision where both the parties are satisfied with the terms of the contract. This solution will eventually not work if one of the concerned parties refuses to reach a conclusion and hold rigid and strict policies of business. Finally, the alternative that is most viable is the change in policies related to liability. Capping of liability should be subject to various factors and these factors help to formulate a solution. A decision should be reached based on the different losses that both the parties can be subject to during business activities and therefore, a preferred solution would involve the proper identification of the losses that may pose a threat to the parties (Popper 2010, 975). Implementation and Implications Strategies should be designed to implement the solutions in the company. It is then important to scrutinize the implications that the solution will have on the financial and managerial activities. A suitable policy of liability can be implemented if contractual obligations are defined properly. This would reduce the chances of breach of the terms of the contract. A feasible way would be to select a period of time rather that a single day for carrying on activities. The terms of the contract should be rational and realistic for both the parties. Steps should be taken to exclude liability capping in a way which would not cause any limitation. Viable clauses should be used which can limit the losses in case of liability exclusion. In such cases, services will not be directly rejected in case of any malfunction. Justifications would be given and solutions would be designed based on that. The implementation part would also require setting of time limits on the activities within which any issue would be reported. Such strategies imply that there would be no strict implication on the financial and management activities. It would ensure that a reasonable growth rate is attained in the business operation by carefully handling the terms of the contract and significant losses are mitigated in the process (Heyes and Liston-Heyes 2000, 196-202). . Reference List D'Aloisio, Paul. "The Design Responsibility and Liability of Government Contractors." Public Contract Law Journal (1993): 515-579. Fischer, Carolyn. "Combining rate-based and cap-and-trade emissions policies." Climate Policy 3 (2003): 89-103. Heyes, Anthony and Catherine Liston-Heyes. "Capping environmental liability: the case of north American nuclear power." The Geneva Papers on Risk and Insurance-Issues and Practice 25 (2000): 196-202. Horton, Michael. “Cause: What caused this issue to arise and why is it important? –Law”. Accessed: 16 October 2014. https://mcmaweb01.curtin.edu.au/segment.php?content_id=469&segment_id=7579 Horton, Michael. “Issue: What is an important issue that your company is currently facing? – Law”. Accessed: 16 October 2014. https://mcmaweb01.curtin.edu.au/segment.php?content_id=469&segment_id=7578 Johnston, Jason Scott. "Strategic bargaining and the economic theory of contract default rules." Yale Law Journal (1990): 615-664. Lewis, Christopher M., and Kevin C. Murdock. "The role of government contracts in discretionary reinsurance markets for natural disasters." Journal of Risk and Insurance (1996): 567-597. Popper, Andrew F. "Capping Incentives, Capping Innovation, Courting Disaster: The Gulf Oil Spill and Arbitrary Limits on Civil Liability." DePaul L. Rev. 60 (2010): 975. Prum, Darren A., and Stephen Del Percio. "Green Building Contracts: Considering the Roles of Consequential Damages & Limitation of Liability Provisions." Loyola Consumer Law Review 23, (2010). Seymour, John F. "Liability of Government Contractors for Environmental Damage." Public Contract Law Journal (1992): 491-571. Read More