Desal Corp Case Study

Report prepared for Desal Corporation

Executive Summary

It has come to the attention of the CEO of Desal Corporation (Desal) that a senior member of staff is leaking information to the competition however she is uncertain who the guilty suspect is. There is a real risk that Desal may realise a maximum contingent exposure of $1.2m should it not correctly identify and terminate the guilty suspect. Desal also has the opportunity to engage an external security firm (Guardian) to complete an independent investigation and assist in the identification of the suspect.

For the given situation, this report provides analysis and evaluation of:

• the robustness of Desal’s decision making process to date;

• the options and potential outcomes available to Desal; and

• the costs and benefits associated to these options and potential outcomes.

The methods of analysis include probability, Bayes and sensitivity analysis as well as a review of the statistics provided by Guardian. All calculations and supporting data can be found in the Appendices.

On the basis of our analysis we provide the following recommendations:

1. Despite the MV analysis indicating that terminating Jonah (without engaging Guardian) is the optimal course of action, Desal should first consider recommendations 2 to 4 before pursuing same (given it currently has the highest risk of all of the options available and it could give rise to negative non-financial consequences for Desal);

2. Desal should not engage Guardian on its current terms as it would result in higher MV cost without a material improvement in certainty of Jonah’s guilt or reduction of risk;

3. Desal should immediately conduct an internal pre-mortem review or have multiple people separately interview the same suspects before contemplating whether to engage Guardian. These low-to-no cost steps should test (and...