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Risk management is essential for every organization. Without proper risk controlling measures, it would be hard to sustain in this competitive market. JB Hi Fi is a leading electronics company of Australia that has expanded its business in cities of New Zealand. This report has evaluated the health and safety risk factors of the company and the measures through which the risk factors could be minimised. It focussed on a risk management plan and its successful execution to mitigate this environmental risk.
1.Type of Business, size and no of employees:
JB HI-FI is an Australian company, headquartered in Melbourne, Australia. This company is a retailer of consumer goods, has specialized in hardware\electronics and home appliances. It is one of the most successful business organizations in Australia. This chain has its stores in all over Australia and it has expanded its business in the largest cities of New Zealand as well. They have total 11000 employees on their direct payroll.
2. Identify internal stakeholders and their concerns to risk management:
Every business irrespective of their structure or size should have work health and safety risk evaluation method that meet lawful compulsion and each business consists of mainly two kinds of stakeholders (Hull, 2012). They are internal and external stakeholders. The internal stakeholders mean the entities within the business. For internal stakeholders for JB HI FI are,
Employees-Employees of the company are the internal stakeholders of a company. Employees play an important role in company’s strategy, tactics and operational planning. They provide significant time and financial investment in the company. Their opinions play a decisive role in shaping company’s mission, vision, and strategies (Lehmann & Joseph, 2015). Employees carry forward this risk management culture of the company into practice.
Manager-Managers of the company play a substantial role in deciding the strategy of the organization and they have a voice in operational decisions. They are also accountable for decisions made and they act as a liaison between shareholders, the board of directors and organization itself. Managers set in risk management processes of the company into daily practices (Johnson & Covello, 2012). They set cultures that inspire the management of risk in all respect. They supervise the implementation of risk management practices throughout JB Hi-Fi.
Owners-The owner of the company owns significant shares in the firm and they play a significant role in strategy planning. They are liable for the impacts the business has. They make considerable decisions regarding internal and external shareholders. The owner decides company’s risk tolerance, attitude and maintains a balance between risk and rewards in the company’s overall strategy.
3. Identify External stakeholders and their concerns to risk management:
External stakeholders of JB HI-FI include Customers, Suppliers, Communities, Partners, Creditors and the Government
Customers- customers are most important and immediate stakeholders of a company. For a successful business, it is important to expand its customer base and retain its customers. If the manufactured goods are made of hazardous materials that affect consumer’s health, then JB HI-FI won’t be able to sustain in the market for a longer term as the consumers won’t buy their product. So it is important for the company to gain customer’s trust and loyalty.
Communities and Governments-Communities and governments are essential stakeholders for a growing company like JB HI-FI. As business works in the communityand communities’ actions have an impact on the business (Smith, 2013). Though organizations like JB HI-FI pays taxes, still they have a responsibility towards environment and societywhich is monitored by the Government.
Suppliers and Partners-Suppliers and partners help JB HI-FI tobuild up to goals, strategies, and visions. Suppliers and trade buyers would assist the company to deliver the best value to the customer. Moreover, trade partners expect that the business or organization would ethical operate the business to safeguard their brand image (O'Riordan, 2014).
Investors-The investors, who finance the business, assist in purchasing assets and properties for the venture, are important external stakeholders for the company. The business needs to maintain good relations with investors that will help the organization to get quality financial assistance in future.
4. Review the organization’s risks in the context of PESTLE Analysis:
Political factors-JB HI-Fi is a renowned name in Australia’s electronic industry. This company is fulfilling customer’s needs through its different outlets operating in Australia. The performance of an industry largely depends upon the political environment of a country (McNeil, Frey & Embrechts, 2015). In the case of JB HI-FI, it is noticeable that they mainly work in the electronics sector. So government’s health policies will affect their business significantly.
Economic Factors-The factors such as recession and the higher unemployment rate has a significant effect on the performance of the business in the electronic industry. It would lower the sales growth drastically (Cornett et al. 2011). In electronics industry, the unemployment rate would increase due to lack of health and safety measures in the industry. So JB Hi-Fi ensures it, workers, occupational safety from any kind of hazardous exposures (like electrical and energy resources, vehicles, fires and others).
Social Factors-Customers are the main sources of revenue for an organization. So their demands and needs should be taken care of by the management of the organization. JB Hi-Fi gives priority to their customers and their health concerns (Chen, Su & Ma, 2013). In affordable prices, the company supplies eco-friendly products to customers that are less harmful. Again any exposure to hazardous and harmful chemical substance is avoided through proper waste management. These steps earn the loyalty of the customers. They provide labeling for recycling and disposal.
Technological factors-In order to avoid any kind of product related risks and safety JB Hi-Fi continuously upgrades their products with technological advancement in the industry. It is observed that every technology is not accepted by the customers, so JB Hi-Fi is taking care of this aspect and always give priority to customers’ needs and expectations before considering the technology for their products. As Australians are more concerned with quality and standards of the product, so JB Hi-Fi is conscious about this unique characteristic of the Australian consumers and follows ‘Standards Australia’ to give internationally lined up standards and services to customers.
Environmental Factors-JB Hi-Fi is a famous company that produces world class product. They are careful about the hazardous effects carbon footprint and related pollution and its adverse effects on the environment. So they abide by environmental permits and all kind of regulations. They work hard to reduce wastage of water and energy and modify products and maintenance as per international industry standards.
Legal Factors-Australia follows ‘Common Law’ legal system which is obtained from English Law. It is highly important to maintain the quality of electronic goods and services to meet Australia’s rules and regulations. Moreover, the country has a strict legal system which cancels offenders’ license for any kind of health and safety violation activities (Backhaus & Faust, 2012). JB Hi-Fi is very much aware of these things and works in accordance with Australia’s legal system to avoid any kind of lawsuit.
5. What are the strength and weaknesses of the business existing risk management practices
JB Hi-Fi is efficiently managed its risks by following strategies beneficial for risk assessment. They identify the health and safety risks for each new product and assess the risk as per Australian standard. This would help them to check their measures prior launching of the products (Jabareen, 2013). The risk assessment measures help the organization to speed up their data to change policies and preparedness of measures that are already proved to be successful in JB Hi-Fi ‘s business functions. It saves their cost and time to measure the environmental or social effects of the risk factors. Sometimes risk management depends on external entities, so in spite of preparedness, the management practice may collapse often. For instance, changing health policies and risk management measures could hamper the whole management practices of the organization related to risks.
6. Outline the following in regards to the risk management plan:
a) Success Factors: Success factors of a risk management plan lies in its proper operations. IT application eases the process of Risk control whereas clarity in reporting and data integration will be responsible for the success of the plan (Weber, 2012).
b) Goals and objectives:
1.To design and implement a risk management process that is integrated with strategic management process
2.To make sure that risk managing techniques are clearly understood by the respective authorities
3.Supervise the risk process to identify loopholes and make additions and alterations as per requirement
4.To define management strategies related to risks and steps to be considered to improve them
7. What tools will or techniques will business utilize to research risks?
Business could use qualitative as well as quantitative analysis to research risks. For qualitative analysis, the company should meet internal and external stakeholders and take their opinions about their views regarding health and safety issues related to company’s product or services (Borga et al. 2011). Then risk should be categorized as per their probable appearances for urgency assessment and to develop effective management plans for the same. In this case, JB Hi-Fi could consider opinions of experienced worker or customer who faced health or safety related issues for company’s working culture or for using specific electronic products of the brand. For quantitative analysis company should do a sensitive analysis to decide which risks have a most potential impact on the project and in this case the company should seek for expert judgments through interviews (Thun & Hoenig, 2011).
8. Using the risk assessment matrix analyze the following:
a).The likelihood of the risk occurring: Based on the likelihood of occurrence, risk can be categorized into 5 categories namely, Definite- In the case of JB Hi-Fi, The risk of working in hazardous conditions are most certain (more than 80%). So this risk falls indefinite category. Likely- Risks that have 60-80% chance of occurrence is scheduled under this. For JB Hi-Fi risks of enormous e-waste is quite obvious for each project. So this risk will fall into this category. Occasional- Risk that has 50% chance to occur like a sudden change in political leadership that causes health policy change, Seldom- massive unemployment rate due to a safety violation incident will fall under this category, Unlikely- any environmental accidents due to hazardous or defective products of the company will fall under this section.
b).The impact or consequence if the risk occurs: Depending on the consequences of risk it can be sorted out in five categories such as Insignificant- Risks that cause negligible damage like thermal power shut down for two hours will cause a lesser amount of damage to production. Marginal- If risk causes minimal damage but not that significant, like supply related issues for a particular locality (Gander et al. 2011). Moderate- Risks that don’t possess a great threat still have a probability of damage significantly, like defective product supplied in the market. Critical- Risks that cause great loss would fall in this category. For instance, if JB Hi-Fi is charged with any legal violation related issues like child labor. Catastrophic- After starting production, it is observed that materials are very low quality and product is harmful for use. So there is no way out except stopping the production. This is considered as a top priority for management.
9).Evaluate and prioritize the risks for treatment
To avoid health and safety-related lawsuits, JB Hi-Fi should give the environmentthe top most priority. Again, the workers’ health and safety issues should be considered as another top priority for JB Hi-Fi. Apart from this company should look into efficient and competent management system, labor related issues and ethical aspect.
10).Select two risks and determine the most appropriate options for treating these risks.
It should be remembered that the company should mitigate the risks that cause adverse effects on the consumers, environment and natural resources (Leveson, 2015). To handle this risk company should abide by the environmental permits and obtain all kinds of registration and approvals from the government and upgrade their waste management techniques time to time.
It is the responsibility of the management to provide a healthy working environment to workers for quality products and services. Safe Work Australia is a statutory agency of Australia that looks after the workplace safety and issues. So it is very important for JB Hi-Fi to follow the rules and regulations set by the Australian Government and follow the WHS Act. This company has risk management committee that works in accordance with government agencies to avoid any kind of health or safety problems related to workers. The company controls this risk by proper work design, administrative and engineering controls. They provide workers safety training and where there is no scope to control the risks; management provides workers well maintained, appropriate and personal protective equipment (Cole et al. 2013).
11. Develop an action plan for dealing with one of these risks. Include:
a) What actions are required using the hierarchy of control
To reduce environment-related risks, the company should reduce carbon emissions significantly. In this case JB Hi-Fi could work on reducing carbon footprints in the environment by developing an action plan, and then it would be considered by the management, after higher management’s nod, project head would implement the plan in its production and waste management system, Project head would then monitor the effectiveness of the project and give feedback to the management.
b) Who is taking responsibility?
To reduce carbon footprint, the company should appoint a project head who will drive the action plan for reducing carbon emissions. So the project head will be held responsible for the entire project from implementation to execution.
To measure the impact of the project, it is important to prepare a timeline for developing, implementing and executing the project efficiently. It would take almost six months to develop the proposal and get sanctions on it, another six months to implement and one year to achieve significant changes in carbon emissions.
d) Monitoring processes:
It is the duty of the project head to supervise the project in regular intervals and make changes as the project progresses.
e) Communication to relevant parties
The project head should interact with internal and external stakeholders in regular intervals to know their feedback in this regard.
12. Outline the documentation required for your risk management plan
It is important to document each and every progress of the project for future references. A report should be made consisting of the overall planning of the project, its advantages and drawbacks should be included in the report to make additions and alterations in the future. Moreover, feedback of every stakeholder should be recorded in company’s database system.
13. Outline how you will implement and monitor your plan
After getting the approval from top management, the project head would conduct a meeting with workers and staffs who are directly or indirectly associated with the project. A short briefing on carbon emissions and its adverse effect would be given to them and after that, the measures of the project would be discussed with the staffs for their feedback. Then only the project would be implemented. The project won’t be successful without the proper support of the stakeholder. After implementing the project it is the responsibility of the project head to supervise the progress of the project. The carbon emission rates should be checked at regular intervals and if needed possible changes will be made to the project as it progresses.
14. How will you evaluate the success of your risk management process?
Carbon emission is a great concern for environmentalists and industries have a responsibility to check this for the betterment of the mankind. During the progress of the project, it is the duty of the project head to oversee the progress and after two years of the implementation, the project head should calculate the reduction in carbon emission with proper measures to evaluate the process.
15. Provide details of insurance available to your business including companies that provide it.
Professional Liability Insurance-
Property Insurance- JB Hi-Fi has this insurance that covers inventory or furniture loss due to fire, storm or theft, it includes equipment and signage. This is provided by the Government of Australia.
Worker’s Compensation Insurance-It covers medical treatment, death or accident benefits to employees. This insurance is jointly provided by JB Hi-Fi and Government of Australia.
Product Liability Insurance-It is essential for a company to avoid making sure that the products are safe. This insurance is provided by Safe Work Australia.
This report has focussed on the risk factors related to health and safety of internal and external stakeholders of the leading brand JB Hi-Fi. The report has analyzed the factors and its impact on risk management system of this Australian company. Moreover, research has also emphasized on the possible risk management plan to reduce environmental hazards like carbon emission.
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