Risk Management Analysis

This report has reflected upon different factors that are associated with the expansion of Macville café to the new Toowoomba store. For this report, the risk factors have been recognized after several meetings with the current shop manager. The report includes a risk management analysis of the new Toowoomba store carried out to evaluate the operation of the café and the risk assessment factors that are linked with the expansion.

The effectiveness of the risk management analysis

Macville acknowledges that the risk management is a crucial part of proper management. The company thus tries to evaluate, assess and manage the risk factors in order to provide the best services for the customers. In this report the risks identified in the entire scenario are those that can be dealt with in an efficient and correct manner. The risk management analysis tries to cover a number of important elements that help the company efficiently and provide the customers with the most efficient service possible (Wolke, 2017). An array of financial, operational, strategic and commercial risks has been identified within the risk management framework (Sadgrove, 2016).

The scope of risk management

The current Hurley’s café is being acquired by Macville and the company is now trying to gather more information related to the different aspects where risks may occur so that Macville can be able to effectively handle the risks and ensure that the business is run efficiently. The scope of the new business requires Macville to review the risks associated that are important for the management of the new café. So the risks related to organizations health, human resource management and monetary operations are considered for the new café. As a manager there is a basic outline of the risks that the company expects to face during the operation. Therefore, this outline will be used in the governing the functions of the new store.

Critical success factors

The senior managers have been involved in identification of the gaps in the current risk management policies and process to facilitate the entire management process in applying the effective management risk approaches. The support and effectiveness level of commitment of the top management will boost the efficiency of the risk management process. Good communication among the staff, customers and senior managers will facilitate cooperation and collaboration of all the stakeholders involved in the risk management process. A good organizational culture has facilitated effective flow of information among the stakeholders.

External and internal stakeholders and their role in the risk management process

Stakeholders	Internal/external	Role in the process	Stake in process
Customers	Internal	Visit the shop and assists the company in making sales. Royal customers also help in the risk management procedures. They offer advice and opinions to the organization.	They have a low stake in risk management process.
Workers	Internal	They have responsibilities in reviewing duties against the risk management. Ensures the smooth flow of day to day operations while dealing with the customers.	Have a high stake level in the risk management procedure.
Government	External	The government implements safety laws that help in protecting customers and the employees. This will greatly help in risk management through protecting employees and customers of the organization.	Have a high stake level in the risk management process.
Investors	External	They invest in the company which will lead to the growth of the company.	They have a medium stake in the risk management process.
Suppliers	External	Supply all the materials needed by the organization. They also offer advice to the management.	Have a medium stake level in risk management of the organization.
Managers	Internal	Manage the store and ensures that every phase in the store is working correctly.	They have a high stake in the risk management approaches.

 

 

 

 

 

 

 

Analysis for the identification of risks

SWOT analysis

Strengths

The biggest strength of the new shop is its location as it is set crossing the two main streets. This would offer massive attraction for the customers. The area is connected well with the public transportation thus will enable the customers to easily reach the store. Currently the store has a moderate infrastructure that will be essential for Macville to overhaul the existing store setup.

Weaknesses

The weakness being faced by the store is that they have obstacles in delivering fresh bakery products. Another weakness is that their policies and procedures have been set orally thus lacking attention of written policies and procedures.

Opportunities

According to Ron Langford, he explained that the population within the areas is increasing that there are more opportunities for business. The government is also going to allow the expansion of cafes to be expanded in their footpaths.

Threats

The two major threats to being faced by the café is the excessive water usage and the growth of competition within that area. This is because the international chains are entering Toowoomba due to increased opportunities.

 

 

PESTLE analysis

Political	The new government legislations will help Macville make more effective operations.
Economic	The store has already had a basic infrastructure thus Macville will not have to spend a lot in upgrading
Social	The current Hurley’s store has ensured that they have met customer preferences. Customers are becoming more health conscious thus changing the customer needs and preferences.
Technological	They have to utilize technology  to upgrade the water supply systems to avoid extra fines that need to paid for excessive use of water

 

List of risks

Risks	Occurring risks
Risks related to handling of cash	Ineffective internal control in handling of cash in terms of monitoring and recording cash flow.
Risk related to risk management policies	Lack of attention to written policies thus ineffective guideline to staff
Risk linked to inefficient organizational strategy	Lack of suitable professionalism to handle the business operations
Risk link to promotional strategy	Failure to observe the external environment of the business.

 

 

Assessment 2

Risk management standards

The risk management standards are considered as the set of specific strategic processes which begin with the overall objectives and aspirations of an organization and aim at helping identify the risks and facilitate the mitigation of the risks through effective practices (Hopkin, 2018). There are a number of risk management standards that have help organizations all over the world to implement their risk management frameworks, practices and processes efficiently and systematically. These include:

1. ISO 31000 2009-Risk management principles and guidelines
2. A risk management standard-IRM/Alarm/ AIRMIC 2002
3. ISO/IEC 31010: 2009-Risk Management-Risk Assessment Techniques
4. COSO 2004-Enterprise Risk Management-Integrated framework
5. OCEG “Red Book” 2.0: 2009-a Governance, Risk and Compliance Capability Model

ISO 31000 2009-Risk management principles and policies

The risk management principles and polices is one of the family of standards relating to risk management that has been codified by the international organization to offer guidelines and principles for consistent risk management strategy (Bromiley, McShane, Nair and Rustambekov, 2015).

 

 

Work and health safety regulation 2017

Division 3: Duties of person conducting business or undertaking

As a person undertaking or conducting any business, you have the duties to ensure that the health and safety of another person is not put into risk from the work being carried out (Aven, 2016). For instance, Wesfarmers industrial division with business in energy, chemicals and fertilizers have to ensure that workers are safe and that effective safety policies have been implemented.

Steps to eliminate risks

The major problem in the AIS environment is deliberate errors which is being termed as fraud. To eliminate such a risk, the management has to be committed to health and safety working standards for those employees (Olson and Wu, 2015). There are a number a steps that are essential for effective management of risks:

• Identification of the risk
• Assessing the risk
• Controlling and revising the control measures to ensure thy are effective.

Risk management policy and procedures

The Australian Catholic University has established their risk management policies and procedures which have constituted to a risk management model that has been integrated for the principles and processes of risk management.

The risk management model includes the steps below:

• Identify
• Analyze
• Treat
• Monitor
• Report

These steps can be effective in the AIS environment to enable mitigate risks of fraud reporting. Through implementation of the risk management model steps, they can be able to identify, monitor, assess, report and offer regular updates on the risk management process to prevent the Fraudulent reporting.

 

 

References

Aven, T. (2016). Risk assessment and risk management: Review of recent advances on their foundation. European Journal of Operational Research, 253(1), 1-13.

Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk management: Review, critique, and research directions. Long range planning, 48(4), 265-276.

Hopkin, P. (2018). Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers.

Olson, D. L., & Wu, D. D. (2015). Enterprise risk management(Vol. 3). World Scientific Publishing Company.

Sadgrove, K. (2016). The complete guide to business risk management. Routledge.

Wolke, T. (2017). Risk Management. Walter de Gruyter GmbH & Co KG.