Allegro Worksheet 1 RISK MEASUREMENT CRITERIA – REPUTATION AND CUSTOMER CONFIDENCE

Impact Area Low Moderate High

Reputation is minimally Reputation is damaged,

affected; little or no and some effort and Reputation is irrevocably
Reputation
effort or expense is expense is required to destroyed or damaged.
required to recover. recover.

Less than 15 % reduction 15 to 55 % reduction in More than 50 %

Customer Loss in customers due to loss customers due to loss of reduction in customers
of confidence confidence due to loss of confidence

Other:

Reputation: Reputational risk in an organization is referred to the damage caused to an IT firm due to loss
of its reputation.
Low Impact:
According to the ABC company reputation is slightly affected. Very easy to recover. To justify it there are
following reasons given as below:
1) ABC Technologies, under the leadership of Paul Evans and Sally McCarty, demonstrated a
proactive approach to diversifying their activities. They ventured into 3D graphics printing
and software development to balance traditional printing activities and stay aligned with
the evolving technology landscape. This strategic move reflects innovation and
adaptability, which could contribute positively to the company's reputation.
2) Recognizing the challenges in the software activity, ABC Technologies, along with Sabina
Senat, Paul Evans, and Sally McCarty, decided to implement the ISO/IEC 27001 standard
 to address management, organization, and operational problems. This demonstrates a
commitment to information security and quality management, which can positively
impact the company's reputation.
3) This loss of reputation can arise as a consequence of operational failures in the
organization (Miklaszewska and Kil, 2016).
Moderate Impact:

Reputation is spoiled. Lot of

money and time should be
spen
Reputation is spoiled. Lot of
money and time should be
spen
Reputation is spoiled. Lot of
money and time should be
spen
Reputation is spoiled. Lot of money and time should be spent. To justify it there are following
reasons given as below:
1) The case study mentions serious management, organization, and operation problems in
the software activity, including the loss of important information, contracts, and a decline
in customer confidence. If these issues are not swiftly and effectively addressed, it could
damage the reputation of ABC Technologies in the software development sector.
2) The rapid increase in the number of competitors and similar products in the software
market poses a threat to ABC Technologies. In a competitive environment, regaining a
positive reputation may involve additional marketing efforts, product differentiation, and
possibly price adjustments, all of which require financial investments.
High Impact:
Reputation is damaged very severely and cannot be restored. To justify it there are following reasons given
as below:
1) Key employees, including Steven Baker and Ian Kovalev, leaving for a competitor
(BearClan), can result in the loss of critical knowledge and expertise. If such departures
become a trend, it may signal to the market that ABC Technologies is not capable of
retaining top talent, further damaging its reputation in the industry.
 2) The lack of a functioning alarm system in the Bradford office and the revelation that
personal information on customers is kept in a database with no security measures
indicate potential security vulnerabilities. If a security breach were to occur, leading to the
compromise of customer data, it could result in severe reputational damage that is
difficult to recover from.

Customer Loss: The growth of the software activity has produced serious
management, organization and operation problems. These problems include the
loss of important information, the loss of several contracts, and more important
still, the loss in confidence of some customers.

Low Impact: Less than a 15% reduction in customers due to a loss of confidence. To justify it
there are following reasons given as below:
1) The decision to implement the ISO/IEC 27001 standard for information security
demonstrates a commitment to addressing management and operational problems.
Customers are likely to appreciate proactive measures to enhance data security,
potentially reducing concerns and maintaining confidence in the company.
2) The company secured a significant investment agreement of over 2 million dollars,
providing financial stability. This financial backing signals to customers that the company
has the resources to weather challenges, potentially reassuring them and minimizing the
likelihood of a substantial reduction in confidence.
Moderate impact: 15 to 55 % reduction in customers due to loss of confidence. To justify it there
are following reasons given as below:
1) The reported loss of important contracts in the software activity could significantly impact
customer confidence. If key clients discontinue their relationships with ABC Technologies
due to operational problems, it may result in a moderate reduction in customers.
2) The malfunction of the alarm system in the Bradford office and the revelation of keeping
customer data in a database with no security measures pose security risks. If a security
breach occurs, causing data loss, it could result in a moderate reduction in customers
who are concerned about the safety of their information.
High Impact: More than 50 % reduction in customers due to loss of confidence. To justify it there
are following reasons given as below:
1) If news of the software activity's management issues, loss of contracts, and decline in
customer confidence becomes widely known within the industry, it could lead to a
negative public perception. Negative publicity and a damaged industry reputation may
contribute to a substantial reduction in customers as businesses seek more reliable
alternatives.
2) In IT companies, risk associated to the reputation can induce negative image of the firm in
customers, regulators and the public and is generally caused by poor management and leadership
(Hedgecoe, 2015).