The Great Wall of Pain

What Are Risk Scenarios?

Each Risk Scenario consists of two parts — The Scenario and The Analysis.

Part 1: The Scenario (15 minutes) Read The Scenario and answer integrated poll questions that solicit your approach or feedback to the situation. The Scenario is based on hypothetical situations that showcase emerging risks.

Part 2: The Analysis Review key themes in the Summary, access relevant articles and resources, learn about existing products and discuss the scenario with other participants.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

When the directors of Range Claimer, a Utah-based mining company, sealed the purchase of the China-based Great Wall Metals Corp., the stage was set for a celebration.

The vice chairman was flushed with the success of it all. It had been his initiative, in concert with the CEO, to start diversifying Range Claimer into other channels than its traditional strengths in U.S.-produced coal and iron ore.

Buying the strong rare earth metals business of China-based Great Wall Metals Corp. meant getting into the lucrative sourcing chain for the global telecommunications and computer industries.

Device manufacturing facilities in China and elsewhere in Asia needed the neodymium and the europium that China had.

Pulling off the deal had required a bold stroke of diplomacy. The vice chairman of Range Claimer and the CEO traveled to Beijing to lobby government officials that were anxious to keep a supply of competitively priced coal from the western states and Appalachia flowing to China.

A long-term commitment at the right price for the coal and iron ore — plus Range Claimer’s reputation for efficiency — sealed the deal.

Despite its strong hold on some metals markets, the stark truth for knowledgeable Chinese officials was that the management of the Great Wall Metals Corp. needed improvement.

You keep the West Virginia coal coming to us, the Chinese had said, and we’ll put Great Wall Metals Corp. on your plate at a decent price, say about $85 million. All you have to do is run it well.

The Board Secretary of Range Claimer had several cases of premium South Willamette Valley sparkling wine iced for as soon as the ink was dry.  And the ink was drying.


That was where things stood in May. In October, Typhoon Chieko kicked up her heels in the South China Sea. Her name in Japanese meant “wise child” but she was in fact a wild child.

Chieko became a Category 3 within days of her birth and set a course straight for Shandong, a province on the Northeast coast of China and the primary metals processing location of the Great Wall Metals Corp.

Chieko didn’t care how much the board of Range Claimer had just paid for Great Wall Metals Corp. or when they had bought it.

She was a Category 4 when she came to shore and she acted like it.

Winds that topped 100 miles per hour ripped off sections of the Great Wall factory roof. Water came from above and below as the storm surge inundated the factory floor. When the wind stopped howling and the waters receded, 60 percent of Great Wall’s manufacturing capacity had been damaged or destroyed.

Do you have good document management processes in place to use in collaboration in the event of a merger or acquisition?

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