Macville acknowledges that risk management is a vital component of good management practice and is committed to facilitating the implementation of risk management processes that are aimed at proactive risk management across the organization. The risk management policy has formed the part of Macville corporate governance and the internal control arrangement.
The effectiveness of the risk management framework
Macville’s risk management comprises of different natures of components that enable the company to enable well-organized operations. Fundamentals of the risk management comprise of different procedures and policies, budgeting, business organization, review, monthly reporting and external audits that enable them to understand the current position of the organization in order to enable them to have a quick response to avoid risks with respect to the strategic plans (Wolke, 2017). Different procedures and policies regarding the human resource corporate governance have facilitated an understanding of the different types of problems being faced thus enabling identification of the risk management plan.
The scope of risk management
As Toowoomba’s store manager, there exists varying scope of evaluating the risks. There is various safety movement that can be employed along with the internal mechanism through the application of appropriate and more efficient risk management approaches. Additionally, the update and review of the existing risk management approaches can be recognized in a manner that it can promote the likelihoods for the implementation of effective risk management approaches. It is also likely to recognize the capacities of risk that have not been closely talked, thus providing effective advice to the directors to ensure that right measures have been taken (Thalmann, Manhart, Ceravolo and Azzini, 2014).
Critical success factors
External and internal stakeholders and their role in the risk management process
|Stakeholders||Internal/external||Role in risk management||Stake in risk management|
|Customer||External||Loyal customers can actively contribute to the risk management procedure because they are concern about the organization.They can participate in the risk management through offering some advice and opinion to the organization||They obtain a low stake in the risk management process|
|Employees||Internal||The audit and financial risk management committee has the responsibility of reviewing their duties against risk management. The CEO and the senior management have the responsibility to manage the risks by offering varying advice regarding risk control. Staff and directors are connected with the identification and governing and taking actions that have been related to the management of risk. The board of management is also linked with the presentation of appropriate risk management approach.||They have a high level of the stake in the risk management process.|
|Suppliers||External||The suppliers have an active role in the effective management of risks by offering advice to the management.||They have a medium level stake in the management of risk in the organization|
|Government||External||The government plays an effective role in the management of risks through the implementation of safety laws that protect employees and customers||They have a high stake in the risk management strategy|
SWOT and PEST analysis for the identification of risks
|Political||There is an authoritarian law in the use of water thus, extreme use of water can lead to enormous amounts of fine|
|Economical||Continuing global downturn is one of the major exterior economic drivers for the cafe since it can lower productivity. Taxation level and local charges on the money exchange in the various markets have created huge effects on the store.|
|Social||The customer preference is currently changing because customers are becoming more health conscious. Thus, to attract more customers they have to offer very fresh bakery products,|
|Technological||The broadband network that has rolled out in the store has enabled them to have efficient video and teleconferencing. Through the utilization of technology, they have communicated with each other effectively on how to improve the effectiveness of the brand.|
It is evident that the café is located in the corner of the two main street of Toowoomba city that will enable them to acquire more customers. There are several risks that have been identified such as a lack of internal control, lack of concentration on the written procedures and policies. Lack of professionalism in handling their operations, lack of promotional strategies and failure to assess the external environment to find new business opportunities.
Risk management standards
Several risk management standards have been established to ensure that organizations are implementing risk management effectively and systematically. These principles have sought to ensure a common of the risk management framework, processes and set generally recognized standards for the industry groups. The varying standards have reflected diverse motivations and technical aims for their designers and are essential for varying situations and organizations (Sadgrove, 2016). The commonly used standards comprise:
ISO 31000 2009-Risk management principles and policies
Offers guidelines and principles on risk management for practitioners employing the risk management process to replace the existing standards (Cooper et., al 2014). This offers the operational standards for the managers who are responsible for the alignment of strategies with the operation of the organization to meet their objectives through the management programs and frameworks.
Work and Health safety regulation 2017
Division 2: Duties of manufacturers, designers, and suppliers of plant
Individuals conducting the business that designs, imports, manufactures or supplies substances for use at the workplaces have duties to ensure that the plant or substance is safe to use when utilized properly. For instance, the Ford Australia, car manufacturing plant is responsible for vehicle manufacturing, design, development, and testing to complete the preventative maintenance.
Steps to eliminate risks
One of the major risks in the AIS is the breach of security which involves unauthorized access to the system or data by outsiders. Effective risk management begins with the commitment of the managers to the health and safety standards for those who operate and manage their business (Haimes, 2015). A safe and healthy risk management comprises four steps which are:
These steps are essential in the elimination of such risks within the AIS thus enabling efficient operation.
Risk management policy and procedures
The organizational procedures and policies are an effective set of written risk management steps that are taken by an organization to ensure the least risk of the amount for their employees (Hopkin,2018). The Australian Catholic University has a risk management model that integrates the risk management process and principles. The risk management model involves the steps below
These steps can be utilized in the AIS environment to prevent risks of fraud in reporting by the employees. Implementing these steps includes identifying the risk events that may prevent achievement of strategic objectives, outlining the causes, implementing treatments, continually monitoring and offering regular updates and reports to assure risks are being managed properly.
Cooper, D., Bosnich, P., Grey, S., Purdy, G., Raymond, G., Walker, P., & Wood, M. (2014). Project Risk Management Guidelines: Managing Risk with ISO 31000 and IEC 62198. Wiley Global Education.
Haimes, Y. Y. (2015). Risk modeling, assessment, and management. John Wiley & Sons.
Hopkin, P. (2018). Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers.
Sadgrove, K. (2016). The complete guide to business risk management. Routledge.
Thalmann, S., Manhart, M., Ceravolo, P., & Azzini, A. (2014). An integrated risk management framework: measuring the success of organizational knowledge protection. International Journal of Knowledge Management (IJKM), 10(2), 28-42.
Wolke, T. (2017). Risk Management. Walter de Gruyter GmbH & Co KG.