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BS501 Risk Management Assignment Help
a) Effectiveness of the risk management frameworks by supporting the process and principles of risk management:
The risk management assignment of the Macville Pty Ltd involves different types of the elements that helps them to facilitate an efficient and effective operation. Elements of Macville risk management generally include different policies and procedures, business planning and budgeting, review regarding the risk management, different monthly report and external audits so they can understand the current position of the organisation and enable the quick response so they can avoid risks regarding the strategic as well as commercial risk. Different policies regarding the human resources, corporate governance and finance helped them to understand different types of problems they are currently facing so they can develop effective risk management plan to mitigate this. Therefore, it supports the ISO 31000:2009 standards because it is intended to harmonise in the risk management processes in the present as well as the future standards. This standard also provides a common approach for supporting the standards to deal with the specific level of rikss so it cannot replace those standards. This standard provides an effective guideline because it is not intended for promoting the uniformity of the risk management regarding organisation.
b) Identification of the scope of risk management:
As a manager of the Toowoomba cafe, there are huge scopes of assessing the risk. As a senior manager of the cafe, different policies regarding the risk movement can be implemented and along with that, more internal control is possible by applying the appropriate and effective risk management strategies. There is huge scope in assessing strategies for risk management factors because identification and the evaluation of the areas in which risk can be occurred are possible (Arena et al.2011). Along with that, update and review of the current risk management strategies is possible so the problem in the current risk management strategies can be identified in the way that can increase the chances to implement the effective risk management strategies. As a senior manager, it is possible to identify the areas of the risk management that are not correctly addressed. Therefore, it is possible for the manager to provide effective advice to the director so appropriate can be taken.
Manager can undertake an annual review for the effectiveness of the system regarding the internal control of the system so they can provide a report to the directors about the current scenario of the problem along with the recommendations. Therefore, it can be sad that a manager is involved in different risk management strategies like the identification of the risk, planning regarding risk management, quantitative and qualitative risk analysis, planning regarding risk responses, and monitoring of risks..
c) Identification of the critical success factors, objective and the goals in that scope:
Goals and objectives:
The main goal or objective of the senior manager in the risk management procedure is identification of the effectiveness of the current risk management procedure. If there is any problem in the current risk management strategy is identified by them then it is their responsibility of the manager to advice board members some strategy by which this problem can be resolved (Wu and Olson, 2010).
Critical success factors:
The senior managers are generally involved to identify gaps in the current risk management procedures (Walker et al.2013). Risk management are generally applied requires five different types of activities like the support from the top level management, different types of cultural imperatives, involvement of everyone in the business structure, patter of the measurements and the integral parts of the entire management processes as well as structure.
Therefore, there are several critical success factors behind the scope of the role of senior manager. Those factors are as follows:
- Support and effective level of commitment from the top level of management
- Effective level of communication among the higher authority, the staffs and the customers
- Good organisational culture that facilitates collaboration and the cooperation
- Effective organisational culture that facilitates a good flow of information
- Good utilisation of the information technology
- Effective training among employees so they can implement their effort in applying effective risk management strategies
d) Internal and external stakeholders and their role in the risk management process:
There are several internal stakeholders of the cafe are supplier, customers and employees and the external stakeholders of the cafe are government etc.
Role in the process
Stake in the process
Only loyal employees can participate in the risk management process because they have some care for the organisation. They can participate in the risk management procedure by providing some advice and their expectation from the organisation.
They have a very few stake in the risk management procedure
Internal employees and top management has high level of stake in this risk management procedures
Along with the employees, suppliers can take an effective part to manage the risks by providing different advise to the middle level management of the organisation so both the suppliers and the organisation can be benefitted from those advise
They have medium level of stake in the risk management process
There are several types of risks that are incorporated with the organisation that are involved in selling food product. Therefore, the government generally had taken an effective part in the risk management by implementing different food safety law. Along with that government, also implement some employment law and safety at work law so it can protect employee in the workplace.
They have very high level of stake in risk management strategy
Table 1: Stakeholders analysis
e) PEST analysis and SWOT analysis for the identification of the risks in this scenario:
There are one of strict law regarding the utilisation of the water. Therefore, the excessive amount of the water utilisation can cause a huge amount of fine on them.
Ongoing global recession is one of the prime external economical drivers of the Toowoomba cafe because this factor can reduce the profitability of the cafe. Local rates of the currency exchange, taxation level and the economic environment in different markets create a huge impact on the cafe (Stevenson and Sum, 2012). As Toowoomba becoming an effective place or the retirees then it can be said that global recession cannot affected them as much as general people so the cafe can take the facilities of moderately strong economic system.
The preferences of the customers are continuously changing because now they became more concern about their health (Beasleyet al., 2011). Therefore, in order to attract them very fresh bakery product is required so the two-hour transportation time can make their customers reluctant to utilise their product so it is important to establish their plant in the nearest location from their store.
The federal governments’ broadband network is rolling out in the Toowoomba that allows them to have an effective as well as efficient teleconferencing and the video conferencing. By utilising the technology the different brand of this cafe can communicate with each other effectively and they also can hold their weekly meeting with the main branch with more effectiveness. This broadband technology can help them to implement WI-FI in their store that can help them to provide free internet services to their customers that in turns can increase their brand image.
Table 2: PEST analysis
- The cafe has planned to open their store in the corner of two streets that can provide them the effective accessibility of the local customers
- One of the staff of the cafe has developed a popular rice wraps that were very much healthy and tasty. It is seen that none of the cafe in the location has not developed this kind of offer.
- Te deliveries of the bakery product from the central plant to the store makes the delivery of the fresh bakery products very much impractical
- Lack of concentration on the written policies and processes because all of their policies and processes settled verbally
- There are no such established process to deal with the injuries that could be happened in the workplace.
- The computer in the store was not password protected so anyone can access the details of the employee and the financial records.
- They do not have any effective sales promotion techniques
- The record of the wages are not complete in their register and along with that many calculations are also wrong in that register
- Huge amount of wastage of water incurs an extra cost of worth $6,000.
- The banking of all of the cash is not done every day that premises the cash on the cash register over night. Therefore, it increase the risks related to the safety of the cash.
- All takings from the cash registers are not well recorded
- There were more opportunities to open new branches of the cafe in the different surrounding places like the K-Mart Plaza, and the Clifford Gardens
- It is seen that the Toowoomba is becoming a place of the retirees and the population of the place is increasing so new business opportunities can be generated.
- The government of Toowoomba from the next month is going to allow more expansions in the footpath dining and allow to put more tables and chairs outside of their premises.
- Large international chain of the coffee shop is making enquiries on the Toowoomba so they can open their new branches on the Toowoomba CBD.
- Braches of water usage can create a huge amount of fine on them.
f) Methods of the research that is utilised in the SWOT and PEST analysis:
In order to conduct the SWOT analysis and the PEST analysis for analysing the strategic strength, there are a number of methods based on which this analysis can be conducted. The risk management framework of the Toowoomba store encompasses a number of the elements that helped the manger to facilitate effective as well as efficient operations. Along with that, it also helped to generate quick response to different types of the financial, strategic, operational as well as commercial risks (Spira and Page, 2013). These different types of elements are monthly report of the organisation, review report of the business planning and the budgeting, different types of organisational policies and the procedures, review of the risk management and the external audits. Therefore, it can be sad that the main source from which the information regarding the SWOT and PEST is conducted is different types of the secondary documents analysis of which can provide an effective scenario regarding the strategic position of the organisation. However, the strategic position of the Toowoomba store can be identified and analysed by different types of survey on the employees as well as the regular customer of the Toowoomba cafe.
g) Completion of the analysis by summarising the scenario and providing a list of risks:
It is seen that the cafe is situated in the corner of two main street of the Toowoomba city that helps them to get huge customer base however, their two hours of delivery time of the bakery item to reach from the plant to the store make their strategy to provide fresh pastry items to the customers impossible. From the scenario, it is seen that the Hurley’s cafe is one of the family run business and in this business, maximum staffs are the family member so it can be said there can be a lack in the professionalism in the business. It is seen from the business that the Mr. Hurley who is the owner of the store sets all of the processes and the policies related to the company verbally. He instructed verbally to his employee about how they can maintain the organisational work. Moreover, another crucial problem that they are currently facing is related to their water utilisation. They waste water unnecessarily, which incurs huge amount of extra costs. Water utilisation for their dishwater costs $6000 and their dual flash system $7,500. However, they want to create a highly performing organisation but they are unable to handle the flow of cash in their organisation. It is seen that they are unable to maintain their banking everyday for which their cash was kept over their store overnight that may create some safety related issues. Rather than the cash handling related issues, it is also seen that their cash register are maintained buy the family staff so there may be some big disparity. Along with that, their interior as well as the exterior design of their store is very much unattractive in nature because some of their chairs are unstable and even broken. This cafe does not have any effective and established process to deal with the workplace injury. This store have only one computer in their store that is not protected with the password so there are huge possibility that it is maintained by different staff who can access all of the information regarding employee details and the financial record of the organisation. Along with that, their store also has incomplete record of their wages and there are so many calculations that are handled by multiple employees so it increases the risks related to the disparity on the calculations. Due to their ineffective promotional strategies, they are facing lack of competitive advantage for their organisation. There are several organisations are opening their branch in Toowoomba, so there is huge possibility that the store can face huge amount of competition from those organisation.
By analysing the scenario there are several risks that have been identified. Key risks related to the cafe are as follows:
- Lack of internal control on the employee, especially on handling the cash as well as recording and monitoring the flow of the cash in different business aspects
- Lack of concentration in the written policies as well as the procedures that can provide an effective guideline to all of the staff
- Lack of professionalism in handling the business because the business is currently run by the family and some of the employees are the family members as well
- Lack of concentration in the promotional strategies
- Failure to monitor the external environment of the business and lack of concentration in finding new business opportunities as well as the potential threats
- Failure to meet the compliance standards of the industrial relationship law, privacy law etc.
a) For each of the risks describe the probability of risk occurring:
Occurring of the risks
Risks related to cash handling
After the acquisition of the cafe by Macville the risk of handling cash in the store is relatively low because they are very much concerns regarding the safety of cash handling
Risks related to written policy
After the acquisition the risks regarding the occurrence of this risk is also low because Macville organisation already have an effectively written organisational policy
Risks related to handle business with more professionalism
Occurrence of this risk after the acquisition is very low because they handle their organisation with more professionalism because they direct their organisation with best organisational strategy
Risks related to promotional strategy
However, the risk regarding the promotional strategy is moderately low because it is not possible to implement the effective promotional strategy immediately (Purdy, 2010). Along with that, it is also not possible to get immediate result of the implemented promotional strategy.
Table 3: Occurring of risks
(Source: Created by author)
b) Assessment of the consequences for occurring of every risks:
Risks regarding the cash handling can occur when the management can have less amount of control in the organisation and on the employees (Power, 2014). On the other hand, risks regarding the written policy can occur if the management of the organisation do not have any focus on the development of the organisation. These risks can also occur when the management do not have any effective leadership strategy to control their employees. Risks regarding the professionalism in the business can occur when management of the Macville would be failed to implement understand the most effective strategy and will apply the lassiez faire leadership strategy. Currently Harley’s cafe do not have any effective strategy so after the acquisition of this organisation, there is huge possibility that Macville can face this risks too. This is because; it is not possible to resolve the risks immediately.
c) Risk matrices by prioritising the treatment of the identified risks:
As stated by Bromiley et al.(2015), risk matrices are effective tool to evaluate the risks. The first risk has the low level of probability and medium severity area. The risks related to the written policy have the low probability and high severity area. The risks related to professionalism have the medium probability and medium severity area and the last risks have the high probability and high severity area.
d) Options for the treatment:
Risk treatment process
Risks related to cash handling
Hire more employees with commerce background
So not provide access to the cash to all of the employees
Risks related to written policy
Implement effective policy
Guiding employees according to this policy
Risks related to handle business with more professionalism
Hire a professional for the implementation of an effective strategy to maintain professionalism
Providing training and groom employees so they can deal their organisational work with more professionalism
Risks related to promotional strategy
Select an effective media so it can attract huge amount of potential customers
Provide different types of promotional coupon, several discounts so it can attract more customers to the organisation
Table 4: option for treatment
(Source: Created by author)
e) Identification of the risks and assess the likelihood, priority and consequences:
The consequences, priority and the likelihood of the risks can be identified from different monthly report, policies and process, risk management report and external audit report of the Harley’s cafe and the current policy and practices of the Macville Pty Ltd.
The existing Herley’s cafe do not have any effective number off experienced employee and all of the employee have the access to cash so it is likely to be effective. The treatment process for the second problem is suggested because it is feasible with the organisation because they actually do not have any effective policy. The risk mitigation processes of the second problem are suggested because it will be effective for the organisation and they actually need this strategy to strengthen their organisation. The risk mitigation process of the promotional strategy is applicable because they do not have any effective promotional strategy so it is likely to be effective for the organisation, which is the main reason behind the implementation of this treatment process.
1) Implementation of the risk management treatment for one of the identified risks:
In order to resolve the risk related to the promotion problem, implementation of the risk management treatment is necessary (de Zwaan et al.2011). In this implementation, different phases need to be implemented like preparation phase, tailoring phase, implementation phase and sustainment phase. In order to select effective promotional media and providing different types of discounts an integrated risk management plan should be implemented. After that, it is important to modify the risk management process of the business and coordinate the plan with the stakeholders. Then it is important to adapt effective tool and employ different types of matrices, formats and checklists. Then providing training to the employee is important and along with that, risks related to that also should be assessed. It is important to provide continuous support to the management so the risk management process can be sustainable.
Ongoing implementation of the risk management action plan:
It is seen from the above discussion that there are several risks that are faced by the organisation. In order to mitigate those problem and implementation of the previously described options, it is important to have an effective plan because without an effective plan it is seriously like impossible to implement effective strategies (Finch, 2014). However, there are several risks involved to implement those plans that are risks related to employee conflict, risks related to any effective policy and procedures, and employee resistant. Therefore, it is important to resolve those issues also along with the previously determined issues. After have an effective plan, it is important to implement those plan. In order to resolve the risks regarding the cash handling, it is important to hire more experienced and skilled employees. In order to resolve the risks regarding written policy it is important to hire personal and professional to develop policy that is more effective and guiding employee according to the policy is also important (Jonkers et al.2014). For resolving the issue regarding professionalism, implementation of effective training and groom the employees are also important. In order to resolve the risk regarding promotional strategy it is important to select an effective promotional media. The outcome of the risk management process will be effective and good. By this risk management, process there is huge possibility that the risks can be reduced. The risk management plan can be said to be effective, tough those plan cannot reduce their severity but it can reduce the probability of the occurrence.
Figure 1: Risk matrices
(Source: Paape and Speklè, 2012)
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