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 launched in 1981(Greene 2004). After the spectacular success like the Apollo II moon landing, NASA's space shuttle program became a symbolic culture icon, representing the myth of American superiority (Vaughan 1996).
The Space Shuttle Challenger flew nine successful missions before the tragedy. In the 1986 mission, the Challenger was scheduled to carry some cargo, as most like other missions. One thing made this mission unique. It was scheduled to carry Sharon Christa McAuliffe, the first teacher to fly in space, being the first flight of the new Teacher In Space Program (TISP). It certainly captured the attention of public more than any missions for years. 3.2 THE CHALLENGER DISASTER
The Space Shuttle Challenger was launched on January 28, 1986 from the Kennedy Space Centre, Florida. Less than two minutes after launch it exploded, killing all on board.
On February 3rd 1986 a presidential commission formed to investigate the cause of the accident. After 4 months of interviews and research, the Rogers commission report was published. According to the Report of the Presidential Commission on the Space Shuttle Challenger Accident, "evidence pointed to the right solid rocket booster as the source of the accident." The two synthetic rubber O-rings in the sold rocket booster failed to seal the rocket's super hot gases from escaping out the joints, directly resulted the explosion (See Appendix 1 for the structure diagram of the space shuttle).
The Presidential Commission of Inquiry (See Appendix 2 for the details of their finding) also found the decision-making processes leading up to the launch of the Challenger were also seriously flawed. The disaster was not simply the result of technical O-ring malfunction. But rather, the decision to launch was undermined by the systemic and organizational structures at NASA, as well as by the ethical and communication dynamics of the managers and engineers involved in the decision-making processes.