Case Study of Challenge Disaster- from a Risk Management Perspective
2.0 INTRODUCTION AND AIMS
Organisations nowadays face various external and internal risks such as strategic risks, operational risks, financial risk and environmental risks. Managers tend to focus on those risks with greater uncertainty like natural disasters. However, some risks also bring destructive outcome even they are predictable and controllable. The inherent risks in the management and control system are among those on the list. Because they are "built-in" risks of management and control system due to agency problem and asymmetric information, managers often ignore them or are unaware of their existences.
The purpose of this report is to provide insight of risk management and control system in the reality from the cases study of Challenger disaster. The real cause of the space shuttle Challenger accident 1986 was the flawed decision making process leading to the launch of the shuttle. The flawed decision making process was not a result of individual mistake. Rather, it was a product of problematic management and control system of the National Aeronautics and Space Administration (NASA). I found this case interesting because the failure was produced by a highly regulated organisation with comprehensive control system: NASA. I believed it would be beneficial to explore the reasons behind this accident, providing real world experience in dealing with risk management.
The case study starts from presenting the background information and fact surrounding the case, following a case analysis illustrates the real cause of the accident. It is finally concluded with lessons have been learnt from the case.
3.0 FACTS SURROUNDING THE CASE
3.1 BACKGROUND OF THE CHALLENGER SPACE SHUTTLE PROGRAM
NASA's Shuttle program was started in the 1970s, to develop reusable craft for transporting cargo into space. Previous space craft could only be used once, then were discarded. Space Shuttle Challenger was the second shuttle in the U.S fleet after Colombia, which was
Organisations nowadays face various external and internal risks such as strategic risks, operational risks, financial risk and environmental risks. Managers tend to focus on those risks with greater uncertainty like natural disasters. However, some risks also bring destructive outcome even they are predictable and controllable. The inherent risks in the management and control system are among those on the list. Because they are "built-in" risks of management and control system due to agency problem and asymmetric information, managers often ignore them or are unaware of their existences.
The purpose of this report is to provide insight of risk management and control system in the reality from the cases study of Challenger disaster. The real cause of the space shuttle Challenger accident 1986 was the flawed decision making process leading to the launch of the shuttle. The flawed decision making process was not a result of individual mistake. Rather, it was a product of problematic management and control system of the National Aeronautics and Space Administration (NASA). I found this case interesting because the failure was produced by a highly regulated organisation with comprehensive control system: NASA. I believed it would be beneficial to explore the reasons behind this accident, providing real world experience in dealing with risk management.
The case study starts from presenting the background information and fact surrounding the case, following a case analysis illustrates the real cause of the accident. It is finally concluded with lessons have been learnt from the case.
3.0 FACTS SURROUNDING THE CASE
3.1 BACKGROUND OF THE CHALLENGER SPACE SHUTTLE PROGRAM
NASA's Shuttle program was started in the 1970s, to develop reusable craft for transporting cargo into space. Previous space craft could only be used once, then were discarded. Space Shuttle Challenger was the second shuttle in the U.S fleet after Colombia, which was
Bibliography: • Birkett, Risk Management working paper • Dunford R 1992, ‘Case study: The Challenger disaster ', in Organizational Behavior: An organizational Analysis Perspective, Addison-Wesley, Melbourne, pp.31-38. • Diane Vaughan 1996,The Challenger Launch Decision: Risky Technology, Culture and Deviance at NASA, The University of Chicago Press, Chicago and London. • Nick Greene 2005, Space Shuttle Challenger Disaster - A NASA Tragedy, Viewed as 18 August 2005 http://space.about.com/cs/challenger/a/challenger.htm • Rogers Commission 1986, Report of the Presidential Commission on the Space Shuttle Challenger Accident, Viewed 18 August 2005