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BSBRSK501 Manage Risk Diploma Proof Reading Service
The case depicts the importance of risk management in an organisation. Risk is a possibility that event will occur and adversely affect the goodwill of an organisation by adversely affecting the business objectives. Any business exists in an atmosphere where perpetual change takes place. Therefore, risk identification must be an ongoing task and proper risk identification would result in passive retention of the risk. Risk management is a tool which helps in creating new opportunities. It includes some steps like risk identification by which % involved can be measured; risk measurement with the use of that risk is measured. Risk evaluation as it involves classification and categorisation of risk identified. Risk handling with the use of that risk can be transferred or reduced. And lastly Implementation of decision by which the risk manager recommend to the board the alternatives of tackling the risk. In this report risk monitoring and reviewing plays a vital role as by using these techniques risk can be minimised so that the organisation will achieve its objectives and goals and can avail more business opportunities in order to achieve the target.
1. Monitor risk and evaluate process:
You must provide:
a monitoring report.
Every organisation faces some risk which will ruin/affect the operations of the business. So there is a need to identify the risk prevailing in the organisation nd accordingly steps should ber taken to prevent or avoid the risk. It is impossible for any organoisation to completely avoid the risk but with the help of some methods of risk management it can be prevented. As an assistant manager of a new store it is my duty to idenify the risk as the store is a new establishment it faces some risk such as market risk, liquidity risk, credit risk, IT risk, etc. Some of the preventive measures which can be taken by the organisation to avoid such risks or to reduce the impact over the organisation can be planned in following manner:-
1.Quality services can be provided to attract more customers.
2.Preparation of budget to identify the cost which would then be compared with actual cost.
3.Special consideration should be given to regular customers.
4.Gifts & rewards along with wishes on festive occasion.
5.Feedback from the customers.
In the process of implementation of abovementioned plan specific consideration should be on the objective of the organisation to be achieved effectively and efficiently. Implementation process would involve following :-
Cost Benefit analysis :- While implementation the assistant manager should take into consieration costs involved and benefits . The costs involved should not be greater the benefits arising from it.
Competitive Edge :- Since in the food market there is high competition therefore Ash must consider provision of services innovatively to get the competitive edge.
Best Industry Practices :- Ash while implementation should consider best industry practices for example like ISO27001 to reduce the IT risks.
Accountability :- In order to reduce the risks relating to fraud and error there should be a person to be responsible for. Therefore in this step Ash has to set responsibilities and assign it to the workers on the basis of their skiils.
Motivation :- Without any motivation work becomes very boring for the staff and Ash must concentrate on different methods motivating the staff . The staff can be divided into teams and the team wok more efficiently shall be rewarded so as to create competition amopngst staff within the organisation whill will result in achievement of organisation objectives.
Staff Training :-Further before implementation of the plan the staff should be properly trained so as to to provide the final product to the customers without any deffect . This will result I customer satisfaction and Goodwill of the organisation.
After the above Implementation Ash will now have to measure the resulting outcome to make ensure whether the organisation’s objectives have been achieved or not. To measure the outcome he should consider the following points:-
Standard Costing:- in this method actual costs incurred by the organisation is compared with standard costs to identify the fluactuations to be taken care of.
Cost of Capital :- in this method ash will ensure that rate of net profit over the total capital should not be below cost of capital.
Inventory Management:- In this method Ash will ensure that the costs of carrying inventory and ordering costs should be reduced to minimum by ordering the inventory as per EOQ model.
Further Ash must satisfy himself with the Internal Controls of the organisation such like CCTV camera, Anti Virus, etc so as to reduce the risks of any Fraud by employees.
Risk evaluation refers to the classification and categoroization of the risk. This evaluatio is done on the basis of chances of a risk to be occurred in the organisation. At the time of evaluation, the assistant manager (Ash) should consider three important things
1.Probability of loss which may occur due to a particular risk.
2.Impact of losses on the company.
3.Ability of the company to [predict such losses before that loss arises.
4.Ash should evalate the risks after considerig the above three points and prioritize them and also identify which risks are acceptable for the company and what are the risks which cannot be faced by the organisation.
2. Analyse and treat risk
1.Submit a risk analysis report, including a risk matrix
2.Submit a completed risk management action plan
3.Implement one risk treatment and submit evidence as agreed with your assessor.
Stakeholder’s Analysis:- in this analysis, focus should be given on the areas as discussed by the stakeholders focus should be given on the suggestions made by the stakeholders.
Work Breakdown :- in this, proper analysis of the tools and techniques takes place such as lighting and electricity problem, machinery work down problem which if resolved help to do work effectively.
Cost Evaluation:- in this evaluation of the cost takes place which help to maintain the liquidity in the business organisation.
Schedule:-in this proper timing, proper shift, regularity of employees takes place which would help to improve the services provided by the organisation.
Technical Evaluation :- in this evaluation of the technology takes place . if there is updated technology in the organisation, new machines, updated tools which help in achieving objectives effectively.
Probability of risk Occuring
Reduction in working capital
Managers Travel Risk
Effect on Goodwill
>50% (Highly Significant)
By-law compliance risk
Brand loss/Reputation and fines
Effect on Goodwill
>50% (Highly Significant)
Loss of Brand recognition
Effect on Business Continuity
Risk Management action plan
There can be two types of risk management plan involving firstly to avoid the risks and secondly if risks cannot be avoided then to reduce the impact of Risk. These plans are discussed as below:-
Risk Avoidance Plan
In this plan the organisation decide upon the measures which will completely avoid the risks by preventing them from happening.
Risk Reduction Plan
In this plan the organisation will decide upon the measure which are taken by the business organisation after occurrence of any disaster within the organisation. Since after occurrence risk reduction plan is to be made to reduce the impact of the disaster occurred.
Further the Management should consider the fact that there are some Natural risks which cannot be avoided at all such like Earthquake, Floods, etc. In such cases Risk reduction plan is applied.
Implementation of Risk Treatment
The risk treatment differs from organisation to organisation. It depends upon the size of the business whther medium or large projects. Risk treatment is different for negative risk strategies and for positive risk strategiegoals.
For negative risks it can be treated by eliminatig the threat that is by way of cause of threat , By risk transfer i.e. transfer the burden of risk to another person, to reduce the risk, to reduduce the impact of threat.
For positive risk it can be taken as an opportunity and we can enhance the risk, sharing of the risk, increasing of the impact of the risk, etc.
So risk is treated to achieve the business objectives and to achieve its target by avoiding the risks existing in the business of café.
3. You must provide:
1.a risk review report, including a completed table of stakeholders
2.email communication to stakeholders
3.summary notes from your meeting with the CEO.
As an assistant manager of the Toowoomba store a risk review report has been made to know the feedback of various stakeholders about the company so that the changes can be made to improve the services of the company and risk can be managed by this this report as there are various kinds of stakeholders which are a part of the organisation so it is the duty of the company to satisfy the stakeholders because the aim of the company is to target stakeholders not the shareholders only and if stakeholders are satisfied the business can achieve its objectives and goals .
Risk Review Report.
1.Scope of risk management: When launching of new projects, risk management is the main aspect to be considered as I have been appointed as the manager of the new Toowoomba store, it is a café and faces some issues which act as a risk for the organisation.
2.Critical success factors of the organisation: Critical success factors of an organisation are different from success of an organisation. They are those elements which are vital for any strategy as they involve those elements which are essential for the success like in the organisation it will depend upon the no of customers.
3.Role of stakeholders in the risk management process:Internal stakeholders such as employees, managers, investors and owners are the people who are directly involved for the success of an organisation. Their role is important as they are involved in the internal activities of the organisation and can leak the personal information which is to other competitors which is very risky for the company. They are directly related with the company’s activities while external stakeholders are the people who are not directly influenced by the business organisation. They have no information about the internal affairs of the company and include customers, competitors, society, clients and customers.
1.Political factors: Changes in government rules and regulations , strikes, violence and changes in the tax policies can affect the organisation so it is necessary for the organisation to take precautions this type of risk.
2.Economic factors:Changes in economy can shuffle the company activities as change in taste and preferences of consumers.The company has to carry itself according to the needs and wants of the consumers.
3.Social factors: changes in the preferences in the society can affect the goodwill of the company so it is necessary for every organisation to maintain good relations with the society. The company should contribute something towards society from the part of profit.
4.Technological factors: There is a need to change according to changes in technology and update in technology as not doing the same will affect the activities and leads to low demand.
SWOT analysis to identify risk:
1.Strength:The store is centrally located is the biggest advantageof the café as it is very easier for the café to attract more and more people. Company has a existing brand name.
2.Weakness: Cost problem as buying of new technologies for star dishwaters cost $6000 and above and dual flush system cost $7500 to upgrade.
3.Opportunities:Opportunities as some chef of the café made innovative dishes and the café is a new opening so can be treated as an advantage as some people attract towards new and innovative things.
4.Threats: Competition prevailing in the market is the biggest threat for the organisation as it is very tuff for the café to face competition and survive in the market.
Risks to be projected:
1.Reputational risk: If the company not able to survive in the market or face problems such as low demand etc then it will lead to affect the reputation of the company .
2.Credit risk:As a new café is opened so already so much expenses took place, to increase more efficiency the company has to do more expenses to take advantage of the new technology.
3.Market risk: So many competitors prevailing in the market can increase the market risk as there are so many competitors already existing and their target is also to attract more and more consumers. Surviving in such a market is not easy for the business.
4.Operational risk:Inability to buy new and effective machines affects the daily activities of the business.
E-Mail communication to stakeholders:
Subject: - communication to stakeholders
This is to inform you all that it is a feedback form in which is conducted to identify the risk prevalent in the organisation as you all are a vital part of the organisation. I hope communication with you all will prove to be helpful an will help the organisation to achieve its goals and if the company able to earn more profit then it will prove to be profitable for all of us. I need your support to please contribute some of your precious rime in answering this form. Please help us to know what kind of risk you people think is prevalent in our organisation and what are the future risks which can be faced by our organisation also suggest us any recommendation or mode or technique through which it can be rectified or avoided.
Summary Notes from the meeting with the CEO:
From the point of view of the risk management, on the basis of some research ,as an assistant manager few points are considered to manage the risk involving in the business organisation which are as under:
1.Meeting is held to discuss the matters about risk involving in the organisation.
2.The risk management policy is to be designed to cover potential threats and opportunities are identified.
3.Determination of the risk which are acceptable by the company and which are not acceptable.
4.Evaluation of the risk which are generally faced by the Macville.
5.Identification of areas where risk management is not addressed.
6.Inform roles to different managers, employees for the purpose of risk management.
7.Approval of major decisions.
8.Settings of the standards with respect to the staff.
9.Strategy as how to undertake risk.
10.Strategy to cope external threat.
In the above assignment it has been concluded that a risk management process has been undertaken by the company to avail more business opportunities and to manage the risk so that the company will be able to achieve its objectives for this the company has prepared a risk management plan and assess various stakeholders, conduct SWOT Analysis and PEST analysis to identify the market position of the company, weakness should be focused upon and strategy should be made accordingly to improve the weakness and avoid threats and various precautions can be taken to handle the risk. A report is also made by me which is submitted to the CEO to cover the points and some recommendations is also given to include the points in the strategy which will be helpful to attain the objective and also lead to the growth of the company.