BSBRSK501 Manage Risk
The key purpose of risk management standard is to provide principles and guidelines on risk management so that company can mitigate or control the negative effects of risk. ISO is the best example of risk management codified by the international organization for standardization (Tummala and Schoenherr, 2011). This standard guides the company related to employing risk management processes.
The introduction of 11 principles is as follows:-
- Creates and protects Value
- Be an integral part of organisational processes
- Be part of decision making
- Explicitly address uncertainty
- Be systematic structured and timely
- Based on the best available information
- Be tailored
- Take into account human and cultural factors
- Be transparent
- Be dynamic, iterative and immediate to change
- Facilitate the continual improvement of organizations
Under the model WHD Act, the risk management involves eliminating the risk at the workplace. This is done through step by step process such as identify hazards, assess the risks and controlling the risk.
There are various factors that help in controlling and managing risk. Likewise, ranking the risk is quite effective factor within which ranks is given to risk on the basis of its consequences. Other one is the risk management process which includes planning, implementing, controlling. Lastly, bring the substitution so that risk can be ignored.
The purpose of risk management policy is to set boundaries for acceptable behaviour and develop the guidelines so that company follows such at the time of risk management (Gates et al., 2012). Basically, the policies contribute to managing overall culture management at workplace because it instils norms and values.
Three examples on impact of risk over the workplace:-
Firstly, it affects the company operations like if company does not adopt the right technology and ignore such fact then it affects its sustainability in market. This is because consumer always wants the updated product or service.
Secondly, risk directly affects the company ability to earn profit as if does not pursue the acts or legislation then it is a biggest risk as customer perceive wrong impression about the business
Lastly, employee’s turnover is considered as a biggest risk as if the employees tend to be unsatisfied due to improper working environment and inappropriate training session then it may influences the company adversely (Purdy, 2010).
Thus, these are the areas which would be affected with the risk occurrences.
Steps for analysing the risk are as follows:-
Step 1: to analyse the risk frequency or probability
Step 2: to analyse the consequences scale
Step 3: Examine the risks
Step 4: Risk rating Table
The sources through which company gathers the information about the particular risk are as follows:-
- Risk register and risk reports
- Audit reports
- Internal and external reviews
- Business impacts analysis (BIA)
Risk is a major factor to experience a loss then to profit within the organizations. Every organization tries to prevent or manage risk so it uses some techniques to identify risk. There are many techniques to identify risk in a company as a part of a risk management process (Gjerdrum and Peter, 2011). Some risk identification techniques which are appropriate for the business, are given below:
- Information Gathering Techniques
- Check list Analysis
- SWOT Analysis.
There are five options that company could take to control the risk. It is mention below:-
- To accept the risk
- To avoid the risk
- To transfer the risk
- To mitigate the risk
- To exploit the risk
Companies can use any one option as per the risk factors.
In a company, many risks are addressed which are harmful to the business. Organizations need to minimize the risk or reduce it at every level of production. If the organizations do not concentrate on risk, organization can be faced major losses. So, organizations should use a suitable procedure to reduce risk in organization (Foerstl et al., 2010). There are different kinds of procedure which are used to minimize risk. Some steps are as following:
- Identify the possible problems
- Analysis the results
- Evaluation the impacts
- Create the plan to treat the risk
- Monitor and Review
This risk minimize procedure is appropriate for the organizations with the simple steps.
This section presents the Risk management report for the company called NatureCare product. This company plans for an expansion. As in that case as an operational manager, the risk occurrences and control method would identify.
- NatureCare product risk management policy is committed to managing and minimising risk. For this, it uses the process such as identifying, analysing, evaluating etc. the scope of company is to grab present opportunities i.e. to expand the business operation in Sydney, Brisbane and Melbourne.
- Internal risk assessment could be done through examine the audit reports, review internal actions and internal risk tend to examine through use of SWOT analysis while external risk assess through use of PESTEL analysis (Pritchard and PMP, 2014).
- Conduct SWOT analysis for identifying the NatureCare strength, weakness, opportunity and threats.
Limited service lines
Problem in managing staff
Frequently changing technology
New market and or services
Changing demographic condition
- The critical success factor for this risk management plan is to mitigate the risk that could affect company working. At the same time the goals of company is too successful expand its business into new market without failing.
- Conduct PESTEL analysis for NatureCare products in order to identify the factor that impacts the company expansion plan.
Political environment: Political factor is one of the crucial factors for the company to successfully run its business. However, the Australia market tends to consider as a stable political environment. Because of this, retail sector can find various growth opportunities.
Economic environment: These factors are major determinants that affect the company performance. It includes the industrial policies, economic condition and people standard of living. In context to Australian market, it is largest capitalist economies. In that case, it will provide benefit to NatureCare market.
Social environment: Asutralian markets consist of diverse people (Cliff, 2012). This can open opportunity for the NatureCare products to find the different target market.
Technological environment: Technology is the current necessity for the companies and it is also supported by the Australian market. Australian government research and development always pursue towards the innovation so for the NatureCare it becomes easy to adopt the technology and perform its business in reliable manner.
Environmental factor: It is the crucial factor with the increasing issues related to environment. It is estimated that maximum people in Australia tend to be quite conscious about the increasing environmental problems. In that case, NatureCare can attract the customer with its product because it mainly deals with the natural or herbal ingredients in its beauty product line.
Legal Environment: legal environment is important to study as it guides the company about the laws and constitution which it needs to follow (Bahn, 2013). The major advantage is that Australian government more promote equality and fairness so this create easy for the NatueCare to deal its business in biasness free environment,
Develop Risk Briefing
On the basis of above study, it is analysed that NatureCare may face risk in the form of poor employee performances. This is because, company focus less on the employee development plan. So, this can be major risk. Other than that, customer taste and growing technology are the critical point which creates challenge for the company. These are the risk which can be occurring with the expansion.
Prepare/ Conduct for team meeting
In order to communicate the risk management plan, there is need to conduct the team meeting. For the meeting, there is need to sent the invitation through mail. Additionally, send the preliminary agenda to key participants and stakeholders (De Bakker et al., 2010).
Thus, these are the areas which need to address while preparing the meeting. To conduct the meeting, certain equipments are required to install like LED, audio device system. This helps to conduct the meeting properly and appropriately.
Risk Management Plan
Risk Management Plan for the NatureCare is as follows:-
|Risk Management Plan|
|Risk identification: Less skilled employee, High competition and changing government policy etc consider as a risk for the NatureCare product.|
Risk analysis and evaluation: this risk could affect the company expansion plan.
Risk response planning: It is recommended that company should conduct proper market research before reach towards the target market. At the same time, providing proper training is also necessary.
Risk mitigation: Company should rank the risk and then prioritise the risk as per their occurrences.
Risk monitoring: audit report, risk register is the best way to examine the effects of risk.
Responsible: operational manager is responsible to implement the risk management plan.
- In above case study, it has identified in Nature Care that there is a risk regarding inability to attract skilled and qualified staff to manage retail stores. Due to lack of proper training, employees of the organization are unable to work properly and manage store with efficiency.
So, the organization needs to provide proper training and guidance to enhance knowledge and skills of employees so that they can be able to handle store’s responsibility with appropriate manner. Organization also needs to organize some educational and training programs to improve employee’s efficiency.
The Nature care needs to train managers first so that they can train on role or off role employees simultaneously with efficiency. Organizations can prefer experts for employee’s training for specific fields. Due to these training programs, organization can develop and enhance the skills and knowledge (Gjerdrum and Peter, 2011).
In nature Care, it should use effective communication training programs to create effective communicating skills in the employees so they can handle customers with effective way. Time is valuable so every organization must organize a time management training programs. Leadership training can also be recommended for Nature Care.
- By providing the proper training, the employees of Nature care have found that it was the great learning as the combination of formal training as well as practical training. Employees have found a great experience through the learning of models of theoretical management.
At the same time, they have felt some difficulties in the homework related with the course and meeting for regular monitoring. Sometimes employees have felt the time management issue with the manager. Majority of the trainees have shared their experience in a positive way as they have really enjoyed and learnt management skills which they can use at work place.
They also recommend some other programs related to talent management that will help the organization to excellent staffing.
|Description of risk |
|There is a risk of inability to handle customers with effective services and there is also an issue of lack of appropriate training.|
|Summary of recommended response and impact|
|This is to recommend that Nature Care should use effective training programs to train its employees so that they can serve the customers with effective manner.|
|There are some programs as time management, communication training and leadership training that are proposed to its employees for training.|
|Resource requirements |
|Organizations need trained managers or skilled trainer to train its employees.|
|This is the manager’s responsibility to assess the employee’s performance and recommend required training to enhance their performance.|
|Timing||The organization should provide proper time to take training for its employees.|
|Reporting/Monitoring||After training, Manager should review and evaluate the effectiveness of the training programs through the check list.|
- Evaluate the overall risk management process.
Was it easy or difficult to identify risks?
Answer: No, it was not difficult to identify risks.
Was staffs input helpful?
Answer: Yes, staff inputs are helpful.
How confident are you that all the risks have been identified?
Answer: There are some external risks that can’t be eliminated so this risk can be diverted or reduced but not removed completely.
- Consider whether the process indicated in the NatureCare Products current risk management policy and procedures sufficient to guide the risk management process used for the business expansion project. Explain why or why not.
Answer: Yes, NatureCare Products current risk management policy guides the risk management process because it assists in regards to identify the risk of the company. Likewise, the less knowledge of staff indicates the company about the inefficient training program. Through this manner, risk is identified.
- Explain whether the principles of risk management in the NatureCare Products risk management policy and procedure consistent with AS/NZS ISO31000:2009 Risk Management Principles and Guidance.
Answer: Yes, NatureCare product follows the principle of risk management. The principle of risk management includes the following:-
- Creates and protects Value
- Be an integral part of organisational processes
- Be part of decision making
- Explicitly address uncertainty
- Be systematic structured and timely (Pritchard and PMP, 2014)
- What changes would you recommend to the risk management process? Identify at least two.
- To conduct the market survey before enter into the particular market
- To conduct the training session weekly in orders to bring more improvement in the staff.
This evaluation report will give the brief idea about the risk which is identified in NatureCare and the recommendations that guide in mitigating the risk. This report need to send the top management through electronic form such E-mail.
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