Chapter three will mainly focus on discusses the design and the methodology. Starting with the problem statement then the research objectives, methodological framework including the major and minor research questions, proposition, limitation and finally the research design in which the sampling method, data collection and analysis will be highlighted.
3.2 PROBLEM STATEMENT
Organizations of any size counter many internal and external factors create the uncertainty for whether, when and how these organizations will achieve their goals and objectives.
The degree of this uncertainty might cause a crisis to the organizations. Organizations manage the risk of crisis by anticipating & planning. Throughout this process communication should be established internally between the all managerial levels and externally with the stakeholders with continues review and monitoring.
ISO 31000 is an operational risk management standard and guidelines not intended to be used for the purpose of certification, which allow all type of organization to implement it .This Standard recommends that organizations should have a framework that integrates the process for managing risk into the organization's overall governance, strategy and planning, management, reporting processes, policies, values and culture (ISO 31000 standard draft, 2008).
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ISO 31000 can be applied to all organization levels, specific functions, projects and activities.
Despite the practice of risk management has been developed over time and within many sectors to meet various needs, the implementation of such guidelines within a comprehensive framework helps to managed it effectively (ISO 31000 standard draft, 2008).
Yiaco Medical as a leading organization in pharmaceutical sector in Kuwait market has operated for more than 60 years without any risk management policy or guidelines, nowadays with the huge expansion of the company operation it makes the probability of facing unexpected crisis is high.
From that point of view this paper proposes a planning strategic tool to be designed, communicated and implemented by the organization management team to test the practicality, efficiency and compatibility of the ISO 31000 to Kuwait pharmaceutical organizations.
3.3 RESEARCH OBJECTIVES
The objectives of this paper are:
First: To increase the awareness of crisis management concept at Yiaco Medical Co. management.
Second: To test the readiness of Yiaco medical / pharma division management against the unexpected events.
Third: To create risk management guidelines for Yiaco Medical Co. against defined risks, determined by pharma division management team.
Fourth: To Test the implementation practicality of ISO 31000 risk management standard in Kuwait pharmaceutical business environment.
3.4 METHODOLOGICAL FRAMEWORK
Since the objective of this paper is to create guidelines of risk management to an organization (Yiaco Medical Co.) the qualitative constructive methodology will be implemented in our research.
According to (Kasanen et.al ,1993) constructive methodology divided into phases, depend on the study:
Choose a practical relevant case with research potential.
Comprehensive understanding of the topic.
Create and innovate a workable solution.
Links the theoretical aspect and the research contribution of the solution concept.
Test the applicability of the solution.
The innovative aspect is very important element of constructive methodology, creating an innovation solution for the studied company should carry a practical benefits in wider scale (Kasanen et.al ,1993).
A first phase has been realized by choosing the research subject to focus on the pre-crisis phase and preparing for any unexpected crisis throughout the implementation of ISO 31000 risk management standard.
Second is the comprehensive understanding of conducting such risk management guidelines to a one of the leading organization in Kuwait pharmaceutical business, with huge number of employee and valuable turnover, which reflect the potentiality of the research topic.
Third phase is the workable solution ,as we have mentioned earlier that conducting the ISO 31000 risk management standard is the suggested solution for Yiaco Medical as a strategic tools ,this standard will be tested throughout the research question and measuring the management responsiveness and commitment toward the implementation.
The last two elements are focusing to link the theoretical framework of ISO 3100 with the existing situation at Yiaco Medical, in terms of creating the framework according to the management needs and expectations and to test the results of the implementation accordingly.
3.4.1 Major Research Question
This paper address seven major questions and two minor in order to achieve the purpose of research:
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RQ1: To define the pharma division major and sub functions, through the interview with the incharge managers team, this aim to expand the knowledge of these functions and conclude a unify major cross functions between the sections and Departments of pharma division, in order to implement the risk management guidelines.
RQ2: What are the Key operational business risks? Based on the managers expectations and experience in terms of defining the major and sub function.
RQ3: What are the contribution factors for these operational risks? In another words how these operational risks occur.
RQ4: How the managers (counter/manage) those operational business risks? According to the nature and responsibilities of each section and Department.
RQ5: How to establish the management commitment toward risk management policy? Endorsement, alignment it with the organization objectives and strategy.
RQ6: How to allocate the required resources to implement the risk management guidelines? (Capital, time, people & process).
RQ7: How the management will measures and controls the policy? Type of reporting system, validity and deviation vs. risk guidelines.
RQ8: How the management will ensure that there is accountability and authority for managing risks? Through implementation and protection of the risk management process and ensure the effectiveness of any risk controls.
3.4.2 Minor Research questions
The major research question were mainly focusing on the internal operational functions that the organization operate with, these function are mainly exposed to the crisis first before it becomes an issue for the external stakeholders ,our two minor research questions are focusing on this side accordingly.
MRQ1: How to establish the communication with the external stakeholders? This part is very important to understand the stakeholder's objectives and concerns which should be considered when handling the key risks.
MRQ2: How to guarantee the continual improvement for risk management policy? Based on the above major and minor equations, decision should be made on how the risk guidelines can be improved.
The adequate risk management guidelines considered a strong tool to tackle the significant business crisis, a big trading organization like Yiaco medical operating through several channels internally and externally starting with the suppliers of the drugs , registration process with local authorities , commercial procedures ,importing the goods, clearance ,sales , marketing ,warehousing and distribution channels to hospitals and pharmacies in both private and public sectors ,such operation required a very solid risk guidelines to cover its aspects .
Our research interviews questions are aimed to prove the following hypothesis:
ISO 31000 is a practical operational risk management guidelines which can be applied to any type of organizations.
The risk factor is a daily concern for Yiaco Medical /Pharam Division management, but its unplanned process, operating re-actively with the crisis rather than being pro-active.
This paper had a few limitations that may have influenced the research. These limitations are:
The lack of perception towards crisis management and risk management terminology specifically for the middle management level (Service units) at Yiaco Medical Co.
The time constraints, all the interviewees belong to managerial positions, time was very tight to conduct the interviews and go through the entire research question adequately.
The educational background for some of the interviewees affected the way they response to the research questions.
Confidentiality of information, since it's directly touched the major and sub functions of the organization, furthermore one participant out of nine had refused to record his interview and response to the questions by writing.
Due to the research questions structure, not all of the participants were able to answer the full set of questions, particularly the service unit managers were unable to answer the questions adequately concerning the major function of the Division (RQ1) and the management commitment towards the risk management guidelines (RQ3).
The lack of the academic papers, regarding this topic in Kuwait, GCC states & Arab countries.
3.5 Research Design
As I have mentioned in this chapter point (3.4) that the qualitative constructive methodology will be implemented in this research.
The respondents would be the Pharma division top and senior management members, whom will be responsible for implementing any policy or guideline, belong to division operation, research questions need to be answered through one-on-one interview to explain and analyze the research requirements.
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Two variables are important to be defined in this paper the dependent and independent variables, according to (www.statsoft.com, 2010) "Variables are things that we measure, control, or manipulate in research. Independent variables are those that are manipulated whereas dependent variables are only measured or registered. The terms dependent and independent variable apply mostly to experimental research where some variables are manipulated, and in this sense they are "independent". Some other variables are expected to be "dependent" on the manipulation or experimental conditions. That is to say, they depend on "what the subject will do" in response".
Dependent variable in our paper is the implementation of risk management guidelines to a trading pharmaceutical organization operate in Kuwait macro environment.
The independent variables are the management perception of the organization operational functions, key operational risk, and commitment toward the implementation, control measures, accountability, resources & finally the communication with the stake holders.
The data collection method used in this paper was one-on-one interview. Each interviewee was asked to give a brief introduction about his educational background, experience and responsibilities.
The interview questions were designed to have an open ended and fixed alternative answers, as well the valuable discussion with all the management team members to grab their ideas, experience, and visions to have a risk management guideline against any crisis situation may face the organization operations.
The research questions and interviews have been performed in eight weeks; the researcher had a short introduction before the interview with all the participants individually to go through the research topic, objectives, questions & historical background.
3.5.1 Target Population and Sampling Method
Pharam and business development section of Yiaco medical Co . Contribute 82% of all Yiaco Medical Co. yearly turnover (45 million KD) compare with the other Yiaco medical divisions (MCD & MSD), with 250 employees working under the umbrella of the Pharma section; makes it valuable to conduct a research in to such potential organization.
According to the Pharma division organizational structure figure (3.1), the structure bordered in to two levels, the trading level which contains the division managers and decision makers, where we can descript it as the top management area.
Figure (3.1) Source company profile (2010).
The second level is the service in where the managers/officers of unites operate ,this level major function is to serve the trading level in terms of purchasing, clearance, logistics, regulatory ,private market documentation , sales process and the public sectors tenders .
The interviews were covered most of the organizational structure members:
A/CEO Pharam & BD .
Pharma senior division manager.
Retails pharmacies division manager.
Animal Health & Crop protection division manager.
Pvt. Market officer.
3.5.2 Data Collection Instrument and Source