Complexity Inc

Complexity's Evolution

Starting as a family business, Complexity Inc has flourished into multi-million dollar publicly held organization, mainly involved in the consumer food goods supply chain and leisure and recreation products and services. When the growth of the Company became too great for the family business to finance internally, external sources of financing were sought. However, the family continues to have a significant stake in the firm, as they hold a large portion of the outstanding stock in the Company and much of the real estate generally occupied by Complexity's largest subsidiary.

It is often difficult for a company to establish the operational structures necessary to support a larger organization, like Complexity, when growth occurs rapidly. This seems to be the case with the Company, especially as it relates to its risk management practices. The most traditional view of risk management is followed by the organization, as it ties risk management strictly to the concepts of insurance and safety. The Company has transferred a portion of its risk to insurance companies in the areas of employee injury, general liability, and motor vehicle loss. But even these programs are generally executed piecemeal by subsidiary management without much oversight or control at the corporate level.

The immediacy for needed changes in Complexity's risk management policies have been identified recently via some surprise large claims and losses that the Company has experienced. However, to properly understand where Complexity needs to go next with its risk management practices, first management needs to scan the environments in which the Company operates to understand its risk exposures.