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
NASAs 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 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
