Problem Solving Case Study And Proposal Report

1 Introduction

The mining sector comprises of outsized international companies sustained by revenue generated from their mining activities. The sector gets considerable support from such industries as metallurgy analysis, equipment manufacture, and environmental testing. It is worth noting that the mining industry has to rely on other sectors because it utilizes large vehicles and equipment for transportation and activities. ABC mining company is in an exploration phase amid significant criticism from members of the public. Recently, several people have taken on the company through social media platforms and conventional channels of communication.

However, the company believes that its critics are baseless considering the benefit of its activities to the society. For instance, the exploration process has called for the need for more employees implying that the firm is currently hiring. Therefore, the immediate community will benefit considerably because of the need for new employees and investment. In the spirit of doing business, the mining company hopes to provide desirable employee retention incentives; this strategy will significantly reduce operation costs that could have been incurred while engaging the wrong people.

The mining firm has demonstrated great effort towards social sustainability. This strategy has mainly been pursued through various community development initiatives, for example, public sporting events, charities, and donations. However, a significant portion of the community does not recognize the initiatives sponsored by the firm and has, instead, accused it of hypocrisy. Indeed, people posted on social media platforms claiming that the company was using charity as a means of gaining a competitive advantage. As the management could not adequately respond to this public outcry, the organization had no option but to withdraw from social media platforms and to withdraw from the community development programs.

The mining sector faces the challenge of harsh reactions, from public members to extraction and exploration activities. Consequently, several companies have had to suspend their operations and even to withdraw from some regions (Wolke, 2017) completely. Mining firms have incurred significant losses because of conflicts with hostile communities, as they have had to pursue expensive reconciliation strategies. Also, losses resulting from the failure of planned projects and the cancellation of secured tenders. This particular company is an outstanding example of mining firms that face the threat of hostility from community members. Despite its efforts to contribute to the community, people have dismissed the initiative as the use of charity and donations to increase competitiveness. Therefore, there is a need to develop and implement an effective risk management framework to ensure that future projects do not fail.

The radical structuralist paradigm is an ideal method of addressing the challenges associated with existing social and organizational arrangements. According to Davenport and Prusak (1998), the four paradigms of information system development seek radical change hence supporting neo-humanism to embrace various standards in the world. Notably, this is a method that acknowledges the elusiveness and complexity of knowledge about the ends and means of people. Organizations need to observe community engagement to ensure that all their activities and initiatives receive public approval.

Since the mining firm is not at peace with the community, it ought to a social therapist to guide the development of an effective internal system. However, the radical structuralist method may not be ideal in negotiating certain conflicts because of communication barriers (Wheeler, 2011). This is why a social therapist is highly recommended for the company to ensure that the process of reconciling with the community is fair and recognizes the interests of all stakeholders. Indeed, the development of the internal system should have a bias to the community or the firm. The definition of the system should be based on the meaning and intersubjectivity of language and interest.

Despite an improvement in the environmental and social performance of mining companies, the incidence of conflict between these companies and communities is high. As a result of the growing effectiveness and strength of the global communication system, the community seems to be empowered and are not willing to approve development projects that do not reflect their aspirations and values. This transition is powered by the desire of people to control their future and develop faith in it (Allen, Loyear & Noakes-Fry, 2016). It is worth noting that loss of faith the primary course of conflicts such as that experienced between the mining company and the community. There is a need for collaboration and dialogue between mining companies and communities, as argued in Rawls' idea of overlapping consensus. Indeed, such a form of collaboration is given as the basis for sustainable development. The conflict between mining companies and communities represents a face-off between human beings and the ecosystem. As seen in many parts of the world, the conflict results in human activities that cause an imbalance in the ecosystem. Though the community development activities could be viewed as social responsibility, there ought to be guiding principles to ensure that firms do not use the projects as marketing strategies.

Every business has an aspect of risk regardless of the industry. Therefore, companies should develop a system manage risk hence enhancing service delivery and production. The risk management framework is essential in providing mechanisms for identifying and controlling risks. The initial goal of this framework was the management of risks related to insurance companies and financial organizations (Hislop, 2018). However, with the effects of globalization liability and investment risks extended to the currency exchange, operational, translational, and technological fields. The ability of enterprise risk management to increase the value of the business lies in the reduction of earning volatility and cost of capital, and the provision of higher returns. Considering that mining is one of the sectors with the highest level of risk, companies ought to focus on risk management and sustainability to ensure their continuity.

Reputational risk is the possibility of a negative public perception to adversely affect the reputation of an organization, hence impacting its revenue. This form of risk is spontaneous, and it shifts the corporate landscape of a company, reduces its revenue, and promotes chaos (Nonaka &Takeuchi, 1995). The principal problem with reputational risk is that it impacts the opinions of customers and organic traffic, as it weaves negative content into the search results of the company. One of the main causes of reputational risk is bad leadership. The CEO of a company represents the face of the entire organization implying that a bad CEO will dent the reputation of the firm. The situation could woeful to the extent that the brand would be damaged even after the CEO leaves the firm. Reputation risk also results from negative articles which could in the form of regulatory penalties, company layoffs, scandals, and lawsuits (Nonaka, Toyama & Konno, 2000). Also, social media has great potential for causing and catalyzing a negative reputation. Controversial posts by organizational leaders harm the reputation of the whole company rather than that of the executive. Besides the leaders, social media backlash can also be sparked by unsolicited mentions of brand celebrities or influential politicians. Reputation risk also arises from services and pricing; the reputation of the company is often tarnished by underperformance or overcharging. Other causes of bad reputation include data loss, bad views, and regulation changes.

The mining company should focus on employee management as it is one of the most crucial factors in the development of an organization. The firm needs to blend the development of systems with neo-humanism and structuralism to bar workers from taking a partisan position in the prevailing conflict. There should be a fair balance in the system to serve both the interests of the management and the employees. An ideal system rationalizes the interests of the management and the investors, against the interests of the employees by modifying the intensity and tools of work. Though one of the objectives of the system is managing employees, the company has to offer them the right equipment and an outstanding workplace environment.

The identification and removal of social and physical barriers is a crucial component of this methodology as it protects personal views against bias. This component improves communication in all levels of the organization, thus better management of employees (Putnam, 2000). It is highly recommendable for the mining company to use a social progress expert, from outside the organization, to develop its system. Notably, an internal developer could be biased to develop a system that favors one side of the organization. This is the only way through which the firm can create a system that accommodates varying social class interests.

The mining firm should not use radical structuralism for its marketing because this tool guards the interests of the company owners and the management. According to Aldrich (2017), radical structuralism does not protect the interests of employees and public members. Also, this method of system development utilizes a partisan developer who attempts to curb the power of employees using a machine-based system. Also, this method does not consider the ideas and opinions of the community and consumers while making decisions. This approach does great harm to the organization as it fuels conflict between the organization and members of the community.

The effective identification and mitigation of risks calls for a risk management framework capable of processing and integrating information into the development cycle of a firm. Through the use of this toll, business leaders can identify threats that could be facing their organization and address them in the right manner. All businesses face a certain magnitude of threat regardless of the size and nature of the industry. Therefore, the firm needs to adopt an appropriate risk management framework to ensure the efficient use of resources channeled towards risk mitigation.

Members of the community have already tarnished the name of the mining company implying that the firm needs to focus on the management of reputational risk (Szreter, 2002). Essentially, the company needs to use assessment as a framework for creating a reputational risk management strategy. Before developing this strategy, the company has to identify how its reputation has been dented. In this case, reputation has been damaged by members of the community who have expressed dissatisfaction with the plan of the company to use charity as a means of expanding its market share. The first step in addressing the reputational risk facing the company ought to be measuring the magnitude of the threat. This phase is essential because it will enable the company to establish the baseline of its image. As a result, the firm will determine the public perception of the business and competitors, and its position in the industry. It is worth noting that customers and members of the community are in the most outstanding position to tell the current image of the company. Therefore, to successfully measure its reputational risk, the company must make extensive use of all stakeholders including consumers and the public.

The decision of the company to withdraw from its social media platforms was not recommendable. Instead, the mining firm ought to have saved the image of its brand using online reputation management. Such a strategy entails expanding the online presence of the organization to reflect on its positive side. The online strategy needs to be pursued through search engine management, social media management, and brand management (Wolke, 2017). It is also highly recommended for the company to run reputation marketing campaigns; this plan is capable of shifting the negative talk and repairing the damage already done through the posts made by members of the community. For instance, the firm can carry out extensive campaigns to persuade the public that its community development programs are exclusively corporate social responsibility programs and not a marketing strategy.

For the final step in addressing reputational risk, the company needs to monitor its reputation, which entails tracking the perception of its brand against the baseline of the firm. Ideally, the organization will be required to monitor the opinions of workers, shareholders, activists, vendors, customers, and analysts (Wolke, 2017). Some methods that can help the company in monitoring its reputation include running surveys, setting up Google alerts, working with reputation management firms, hiring a brand tracking team, and manually searching their brand using popular search engines.

The impact of organizational activities on the environment significantly influences the way the public perceives a company. The mining industry is power-intensive implying that the company could be consuming excessive energy to run its operations. Several members of the community will view much electricity use as having a great environmental impact. Therefore, the company ought to find ways of reducing its use of such sources of energy as electricity and coal (Wolke, 2017). For example, the firm could invest more in the use of natural gas at the expense of coal and electricity.

Risk modification is also another recommendation for the effective mitigation of risk at the mining company, as it will be in a position to address unexpected threats. Also, there is a need for accountability at the workplace using a sensible period. While using risk modification as a mitigation strategy, the company can implement numerous risk management plans, evolve corresponding management strategies, and define the budgetary and planning requirements capable of addressing principal threats (Laucuka, 2018). Successful managers tend to manage the risk at hand rather than approaching it with a negative attitude. Notably, an organization can evade potential risks by choosing other options; however, it is good to strategize on the liability strength and environmental impact of risk before addressing it.

WHO? -this question will guide the company in identifying every individual who was involved in the case. These people are inclusive of members of the community who were affected by the public development activities run by the company, employees tasked with risk management at the company, and the perpetrators of the online campaign to diminish the reputation of the organization.

HOW? -this question entails how the mining company can pursue different strategies to ensure the case does not recur. Also, the question entails how the company could handle a similar situation of it occurred in the future.

WHAT? -this question refers to what needs to be done to alleviate the current situation. Specifically, it is about the recommended risk management framework that needs to be adopted by the company to address the case. This question also entails what additional strategies ought to be used apart from what has been recommended in this report.

Amid considerable reputational risk, the mining company needs to develop and implement an appropriate risk management framework to alleviate the current situation. The development of the mitigation strategy is a crucial step that comes alongside investigating the cause of the whole matter. This is because an institution can't solve a problem whose cause is not known. The process will, therefore, begin with the identification of the risk and the underlying reasons. In this case, the company has already revealed that the problem began with members of the community who made negative posts on social media, accusing the firm of using charity as a marketing strategy. An overview of various mitigation approaches reveals that the company can use neo-humanism, to regain its reputation, but it is not recommendable to utilize radical structuralism.

7 References

Aldrich, P 2017 The Importance of Social Capital in Building Community Resilience. In: Yan W., Galloway W. (eds) Rethinking Resilience, Adaptation, and Transformation in a Time of Change. Springer: Cham.

Allen, B Loyear, R. and Noakes-Fry, K 2016 The Manager’s Guide to Enterprise Security Risk Management: Essentials of Risk-Based Security. Brookfield: Rothstein Publishing (A Rothstein Publishing Collection EBook).

Davenport, T & Prusak 1998 Working knowledge: how organizations manage what they know. Boston, MA: Harvard Business School Press.

Hislop, D 2018, Knowledge Management in Organizations: A critical introduction. 4th ed. Oxford, UK: Oxford University Press.

Laucuka, A 2018 ‘Communicative Functions of Hashtags.’ Economics and Culture, Vol. 15, no. 1, pp. 56-62.

Nonaka, I & Takeuchi, H 1995 The Knowledge-Creating Company: How Japanese companies create the dynamics of innovation. New York: Oxford University Press.

Nonaka, I, Toyama, R & Konno, N 2000 ‘SECI, Ba, and leadership: a unified model of dynamic knowledge creation.’ Long Range Planning, Vol. 33, no.1, pp. 5-34.

Putnam, D 2000, Bowling Alone: America’s Declining Social Capital. In: Crothers L., Lockhart C. (eds) Culture and Politics. Palgrave Macmillan: New York.

Szreter, S 2002 ‘The state of social capital: bringing back in power, politics, and history.’ Theory and Society, Vol. 31, no.5, pp. 573–621.

Wheeler, E 2011 Security Risk Management: Building an Information Security Risk Management Program From the Ground Up. Waltham, MA: Syngress (ITPro).

Wolke, T 2017 Risk Management. München: De Gruyter Oldenbourg (De Gruyter Textbook).