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BSBRSK501 Manage Risk

Assessment Task 2 Case Study

1. What steps in the process should have highlighted to senior management that
there may be higher risks in the Victorian market?

Identify the risk : To operate and run business successfully it is important to know
laws and policies of federal states as different states have different policy. In this context,
the laws of Queensland was not evaluated and business have to suffer huge risk. They
wereunable to identify and manage risk.

Establishing the context: In the given case study, the company did not
evaluate the market , available resources and did not researched on scope and
focused on financial aspect only which resulted in huge loss of company. It was
necessary to establish the context evaluate the plans and focus on the market that
has greater scope rather that the market that is yet to be developed.

Analyse the risk : There is always possibility for risk to occur it is necessary
to analyse the risk and reduce the consequences of risk occurred.

Monitor and review the system : The operation of the company should be
reviewed on the basis of current financial situation and functioning of organization
in order to reduce risk factors by bringing changes in risk management procedure.

2. Explain what senior management could have done or set in place at the outset to
ensure a better understanding of the risks in both markets.

The things senior management could have done at the outset to ensure a better
understanding if the risks in both markets are as follows :

Need to have proper planning for establishment of two business at once.


Should have researched about legal policies of the state where the business was
established.
The business was focused on a single scope , it is necessary to expand the scope
and keep options while running business,
Should have researched about the place , marketing values , competitors before
establishing the business.
Two markets were opened at the same time and after the loss caused they
should have prioritized the market with greater scope and focus on that with
proper planning and develop the other market when situation gets normal.

Assessment activity 2- Identifying risks

1. Explain
why its essential all stakeholders are involved in identifying risks.
- Every stakeholders can give different opinions by brainstorming various ideas one of the
opinion from different ideas can be useful and related with minimizing and identifyingrisks.

- It helps in identifying risk easily as many stake holders are discussing together about the
possible risks and risk factors

- Every stakeholders are concerned about the upcoming risk so each and every individualwill
be providing excellent reasons and they will be playing great role throughout the process in
minimizing loss and reducing loss effects

2. List five research methods that may be used in determining operating risks
relevant to a small car-tyre retailer, and describe what general type of information
may be retrieved or gained from these methods.

The methods that may be used in determining operating risks relevant to small car-
tyre retailer are as follows :

Market research : It is important to research the market , gather information about


the company that is gathering the market, research quality of product and analyse the
consumers demand and produce the quality tyre which prefers the per capita income of
the market place.

Public consultant: Consulting with public about product is the best way to upgrade
the products and spread the market. It is important to maintain costumer satisfaction with
thecompanys product. Gathering response from public reduce risk as it encourages on
producing the product within the interest and demand of costumer.

Stake holders: Stake holders can provide response on the product of the company
andgives opinions to improve and upgrade products which helps to reduce risk and
improve the quality of product.

Previous experience: Experience on marketing is very important , it is essential to


know about the market and the value of products that costumer are willing to consume
which can only be acquired from previous experience on the marketing field. Previous
experience can be utilized in producing the required number of product within consumer
demand with improved quality and keeping limited required stocks.

Information from other business areas: Information from other business areas helps
to acquire knowledge about the product you are launching and the risk factors involved in
the business relevant to this product which helps in minimizing risk as possible risk factors
will be evaluated before running business and managed.

3. What advantages are there to using a scenario analysis to identify risks?

The advantages of using scenario analysis in identifying risk is as follows


Helps to make a reference and prepare proper plan before the start of
the business.
Helps to visualize the risk factors and ways to minimize them.
Helps to avoid financial loss and is key point on flourishing the
business.
Helps to know about the market , competitors , demands and the
possibilities

4. File the practice tasks you have completed that provide evidence you have
established:
a) the people you will speak to and what they can offer

b) the methods used to research the risks

The methods to research risks are as follows :-


Previous experience
Stake holders
Feedback from costumers

c) methods used to generate a final list of risks

The methods to generate a final list of risks is as follows :

Flowchart
Fishbone diagram
Scenario analysis

d) a final list of risks in consultation with relevant parties.

A final list of risks in consultation with relevant policies are as follows:

Response from constumer


Quality of product
What personnel should the EMQ staff invite to participate in the risk
identification and research process?

The personnels EMQ should invite to participate in risk identification and research
process are :

Staff Members:- The staff members from the chemical plant.


CEO, manager, WHS members.

1. What research methods could be applied?

The research method that can be used is as follows:-


Research on the area of impact where risk can occur.
Analysing data from past years and consulting with experts.
Public consultant

2. What appropriate methods could be used to ensure all possible risks have
been identified?

The appropriate method that could be used to ensure all possible risks identified are as
follows :-
Analysing the risk and proper planning to minimize it.
Regular inspection on bushy areas.
Scenario analysis and brain storming
Using diagrams to analyze highly affected areas and less affected areas and
prepare plan according to it.

Assessment activity 3 -Analysing risks

The following is a list of risks that may commonly face a business enterprise.

Product malfunction causing injury to a consumer

Worker injured on-the-job from tripping on loose carpet square

Interest rate rise increases repayment costs on business borrowings

One of your product component suppliers goes into receivership

Staff fraud due to possible software loopholes/backdoors

Complete the following three tasks using appropriate matrices.

a) Apply a risk rating scale to the likelihood of the risks listed above occurring (A
E; extremely likely to rare).
b) Assign a consequence or level of impact value (15; insignificant to
catastrophic/outstanding) to each of the risks.
c) What overall risk priority would you assign these risks for treatment (high, medium,
low)?
Case study

Read the case study, and then answer the questions that follow.

1. Knowing now that GM suffered massive losses as a result of badly misjudging


the mood of the US consumer and the impact of the global financial crisis, what
basic rule of thumb for assessment of consequence should GM have applied in this
case?

The basic rule of thumb assessment of consequence GM should have applied is as follows:

Should have manufactured product on the basis of current consumer demand by


researching the market and evaluating possibilities.
Analysis of product quality and consumer feedback.
Production of cheap and quality car which can compete with other manufacturers in
the market.

2. With rising oil prices, falling confidence in the finance markets and raised
environmental concerns among the general public, what likelihood and consequence
would you assign to this situation, and what resultant overall risk priority would you
generate?

Assessment activity 4 - Selecting and implementing risk treatments

1. What risk control options might you select for the following risks.
a) Increased competition
b) Decline in demand for the organisations services.
c) Expenditure exceeds budget forecast
d) IT system doesnt meet company requirements
e) High staff turnover

The risk control options I select for above risks factors is as follows:-
Research market and fulfill costumer demand.(Avoid the risk)
Increase quality of product , produce according to market demand.
(Change the likelihood).
Try to fix within the budget (change the consequences).
Sharing risk with insurance or business partner is important as the loss can be shared
mutually (Share the risk with third party)
Minimise the risk that have occurred by mobilizing the resources and staffs you have
(Retain the risk).

2. Research what type(s) of risk reduction or sharing strategies may be applied or are
available if you are looking to address the risk of litigation from the actions or
inactions of you or your staff.

The risk sharing strategies that can be applied after visualizing possibility of risk is
as follows:

The risk can be avoided proper planning and consultation with expertise
The risk occurred can be shared with business partners and insurance which
minimizes the loss occurred.
Initiating joint ventures with technical experts.
Can mobilize the available sources in case of risk to minimize the effect of loss.

3. Name four business areas for which there may be a legal requirement to retain
or destroy documentation. Give examples.

The business areas where there might be legal requirements to retain,destroy


documentation are as follows:
Sales department:- The reports of the sales in the market can be destroyed to avoid
from misuse.
Human resources department:- All the personal detail, work details can be
destroyed.
Administrative department:- The document regarding administration can be
destroyed asit can be misused for crucial administration works.
Finance department:- The financial reports can be destroyed once they are prepared
and recorded

4. List the information you would include in your risk management action
plan and explain the purpose of this information.

The list of information that I can include in my risk management action plan are as
follows:
5. Explain the role a manager plays in monitoring and evaluating their risk
management action plan and storing the information.

The role of a manager in monitoring and evaluating the risk management plan and
storingthe information is as follows:

Analyse the reports , identify risk and prepare plan to reduce them.
Conduct risk management activities time by time.
Review the risk management process and research on outcomes to implement it on
future.
Prepare report and maintain the privacy on crucial information of organization.
Supervise and utilize the available resources.

6. In one or two sentences, describe why you need to maintain communication with
stakeholders and/or participants throughout the risk management process.

It is important to maintain communication with stakeholders throughout the risk


management process as stake holders are external agents which contributes in success of
business so they should be involved in planning and they must be given up to date
informations so that they can brainstorm many ideas to contribute in reducing and
managing risk

7. What difficulties do you think might arise when implementing the plan?
Provide solutions to the difficulties you have identified.

The difficulties that may arise implementing the plan are as follows:

It is difficult to create understanding between staff members, business partners.


The project can run out of budget.
The laws of the state might not be compatible with the plan.
There might be lack of internal knowledge in planning activity and implemented plan
might end up wrong.

The solution to the difficulties are as follows:


Implement planned procedure in mutual understanding and after confirmation from all
sothat no dispute is created.
Reduce the cost of project.
Should know step by step planning process, its effect and consequence.
Be updated with state laws and regulation

Case study

Read the case study and answer the questions that follow.

1. Research the different types of risk treatments available to the business to


provide risk coverage for the identified risks.

The types of risk treatments available to the business to provide risk coverage for
identified risks are as follows:

Avoid the risk,


Change the likelihood,
Change the consequences,
Share the risk with third party,
Retain the risk

2. Determine which risk treatment would best suit each risk, with a brief

The risk treatments for each risk is as follows:


Technology risk ( Change the consequences): Bring the advanced technology in the
market rather than old. Costumer always wants to try out latest and advanced products.
Product Risk (Change the likelihood): Bring the high quality product at nominal price as
per market demand it will reduce the risk on product.
Financial risk (Avoid the risk) : It is not necessary to invest huge amount as business
might not flourish . If it occupies the market then investment can be done.
Reputation risk (Retain the risk): In case if the new product launch brought
dissatisfaction among costumers stop investing in the new and prioritize and develop old
product which had good company reputation.
Commercial/market risk (sharing the risk) : Sharing the risk is best option to
minimize the loss. And moving into new market there is even more risk. Insurance can
be done to reduce the risk occurred

3. Prepare this as a written report outlining the options and suggesting


an
implementation plan (including time line) to the CEO of PolyMake Pty Ltd.
This report is prepared to give suggestion for implementation of plan to the CEO of
Polymake Pvt.Ltd. This company manufactures plastic parts and equipments for vehicles.
This company is at its peak and trying to advance and spread its business.

The company is analyzing the market, market scope on the field they are upgrading.
For upgrade the company is co-operating with boat manufacturing companies to make a
big deal. The next step company is taking through is good as business needs to be
upgraded as they aremaking profits and it is the best time for them to upgrade but there is
also risk in the same way. The company is at good position making profits and it have
good employees and managers whoare leading the company well but the risky part is
company has not cleared previous debt and there is minimal cash reserves for
advancement and also they dont have much reputation on marine good manufacture so its
risky. I suggest CEO that they can currently upgrade on :
OPD employees are willing to change business operations to take
advantage of the functionality offered by the new mobile technology.
Management will ensure that project team members are available as
needed to complete project tasks and objectives.
The Steering Committee will participate in the timely execution of
the Project Plan (i.e., timely approval cycles and meeting when required).
Failure to identify changes to draft deliverables within the time
specified in the project timeline will result in project delays.
Project team members will adhere to the Communications Plan.
Mid and upper management will foster support and buy-in of
project goals and objectives.
The City will ensure the existence of a technological infrastructure
that can support the new mobile technology.
All project participants will abide by the guidelines identified
within this plan.
The Project Plan may change as new information and issues are
revealed

Project Timeline