BSBRSK501 Manage risk KU2.doc

BSBRSK501 Manage R isk  isk  Assessment Task 2 – Case Study 1. What What step stepss in the pr!ess pr!ess shu"d shu"d ha#e ha#e high high"ig "ighte hted d t t seni senir r mana managem gement ent that that there may $e higher risks in the %i!trian 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. 

nalyse the risk : There is always possibility for risk to occur it is necessary to analyse the risk and reduce the conse!uences of risk occurred. 

"onitor and review the system : The operation of the company should be reviewed on the basis of current financial sit uation and functioning of organi#ation in order to reduce risk factors by bringing changes in risk management procedure. 

2.

'(p"ain )hat )hat senir senir management management !u"d !u"d ha#e dne r set in p"a!e at the utset utset t ensure a $etter understanding understanding * the risks in $th 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 : 

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

%hould 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, 

%hould 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 prioriti#ed the market with greater scope and focus on that with  proper planning and develop develop the other market when situation situation gets normal. 

Assessment Assessment a!ti#ity 2+ ,denti*ying risks 1. )hy it-s essentia" a"" stakeh"ders are in#"#ed in i n identi*ying risks .

'(p"ain

& Every stakeholder's can give different opinions by brainstorming various ideas one of the opinion from different ideas can be useful and related wit h minimi#ing and identifyingrisks. & It help's in identifying risk easily as many stake holders are discussing together about the  possible risks and risk factors & Every stakeholder's 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 minimi#ing loss and reducing loss effects 2. ist *i#e resear!h methds that may $e used in determining perating risks re"e#ant t a sma"" !ar+tyre retai"er/ and des!ri$e )hat genera" type * in*rmatin may $e retrie#ed r gained *rm these methds.

The methods that may be used in determining operating risks relevant to small car& tyre retailer are as follows : "arket research : It is important to research the market , gather information about the company that is gathering the market, research !uality of product and analyse the consumer's demand and produce the !uality tyre which prefers the per capita income of  the market place. (ublic consultant: )onsulting with public about product is the best way to upgrade the products and spread the market. It is important to maintain costumer satisfaction with thecompany's product. *athering response from public reduce risk as it encourages on  producing the product within the interest and demand of costumer. %take holders: %take holder's can provide response on the product of the company andgives opinions to improve and upgrade products which helps to reduce risk and improve the !uality of product. (revious 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 ac!uired from previous experience on the marketing field. (revious experience can be utili#ed in producing the re!uired number of product within consumer  demand with improved !uality and keeping limited re!uired stocks. Information from other business areas: Information from other business area's helps to ac!uire knowledge about the product you are launching and the risk factors involved in the business relevant to this product which helps in minimi#ing risk as possible risk factors will be evaluated before running business and managed. .

What ad#antages are there t using a s!enari ana"ysis t identi*y risks&

The advantages of using scenario analysis in identifying risk is as follows+ elps to make a reference and prepare proper plan before the start of the business. 

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elps to visuali#e the risk factors and ways to minimi#e them.

elps to avoid financial loss and is key point on flourishing the  business. 

elps to know about the market , competitors , demands and the  possibilities 

.

i"e the pra!ti!e tasks yu ha#e !mp"eted that pr#ide e#iden!e yu ha#e esta$"ished3 a4 the pep"e yu )i"" speak t and )hat they !an **er

$4 the methds used t resear!h the risks

The methods to research risks are as follows :& 

(revious experience

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%take holders

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-eedback from costumers

!4 methds used t generate a *ina" "ist * risks

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

-lowchart

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-ishbone diagram

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%cenario analysis

d4 a *ina" "ist * risks in !nsu"tatin )ith re"e#ant parties.

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

esponse from constumer 

Quality of product What persnne" shu"d the 'M sta** in#ite t parti!ipate in the risk identi*i!atin and resear!h pr!ess& The personnel's E"Q should invite to participate in risk identification and research  process are :

1.

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%taff "embers:& The staff members from the chemical plant.

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)E/, manager, 0% members.

What resear!h methds !u"d $e app"ied&

The research method that can be used is as follows:& 

esearch on the area of impact where risk can occur.

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nalysing data from past years and consulting with experts.

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(ublic consultant 2. What apprpriate methds !u"d $e used t ensure a"" pssi$"e risks ha#e $een identi*ied&

The appropriate method that could be used to ensure all possible risks identified are as follows :& 

nalysing the risk and proper planning to m inimi#e it.

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egular inspection on bushy areas.

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%cenario analysis and brain storming

1sing diagrams to analy#e highly affected areas and l ess affected areas and  prepare plan according to it. 

Assessment a!ti#ity  +Ana"ysing risks

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

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(roduct malfunction causing in2ury to a consumer 

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0orker in2ured on&the&2ob from tripping on loose carpet s!uare

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Interest rate rise increases repayment costs on business borrowings

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/ne of your product component suppliers goes into receivership

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%taff fraud due to possible software loopholes3backdoors

)omplete the following three tasks using appropriate matrices. a4 pply a risk rating scale to the likelihood of the risks listed above occurring 56  E7 extremely likely to rare4.

 b4 ssign a conse!uence or level of impact value 58697 insignificant to catastrophic3outstanding4 to each of the risks. c4 0hat overall risk priority would you assign these risks for treatment 5high, medium, low4

Case study Read the !ase study/ and then ans)er the 6uestins that *""). 1. Kn)ing n) that 7M su**ered massi#e "sses as a resu"t * $ad"y mis8udging the md * the 9S !nsumer and the impa!t * the g"$a" *inan!ia" !risis/ )hat $asi! ru"e * thum$ *r assessment * !nse6uen!e shu"d 7M ha#e app"ied in this !ase&

The basic rule of thumb assessment of conse!uence *" should have applied is as follows: %hould have manufactured product on the basis of current consumer demand by researching the market and evaluating possibilities. 

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nalysis of product !uality and consumer feedback.

(roduction of cheap and !uality car which can compete with other manufacturers in the market. 

2. With rising i" pri!es/ *a""ing !n*iden!e in the *inan!e markets and raised en#irnmenta" !n!erns amng the genera" pu$"i!/ )hat "ike"ihd and !nse6uen!e )u"d yu assign t this situatin/ and )hat resu"tant #era"" risk pririty )u"d yu generate&

Assessment a!ti#ity  + Se"e!ting and imp"ementing risk treatments 1. What risk !ntr" ptins might yu se"e!t *r the *"")ing risks. a4 Increased competition  b4 ;ecline in demand for the organisation's services. c4 Expenditure exceeds budget forecast d4 IT system doesn't meet company re!uirements e4 igh staff turnover 

The risk control options I select for above risks factors is as follows:& 

esearch market and fulfill costumer demand.5void the risk4

Increase !uality of product , produce according to market demand. 5)hange the likelihood4. 

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Try to fix within the budget 5change the conse!uences4.

%haring risk with insurance or business partner is important as the loss can be shared mutually 5%hare the risk with third party4 

"inimise the risk that have occurred by mobili#ing the resources and staffs you have 5etain the risk4. 

2. Resear!h )hat type:s4 * risk redu!tin r sharing strategies may $e app"ied r are a#ai"a$"e i* yu are "king t address the risk * "itigatin *rm the a!tins r ina!tins * yu r yur sta**.

The risk sharing strategies that can be applied after visuali#ing 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 minimi#es the loss occurred. 

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Initiating 2oint ventures with technical experts.

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)an mobili#e the available sources in case of risk to minimi#e the effect of loss.

. ;ame *ur $usiness areas *r )hi!h there may $e a "ega" re6uirement t retain r destry d!umentatin. 7i#e e(amp"es .

The business areas where there might be legal re!uirements to retain,destroy documentation are as follows: %ales department:& The reports of the sales in the market can be destroyed to avoid from misuse. 

uman resources department:& ll the personal detail, work details can be destroyed. 

dministrative department:& The document regarding administration can be destroyed asit can be misused for crucial administration works. 

-inance department:& The financial reports can be destroyed once they are prepared and recorded 

. ist the in*rmatin yu )u"d in!"ude in yur risk management a!tin p"an and e(p"ain the purpse * this in*rmatin.

The list of information that I can include in my risk management action plan are as follows:

5. '(p"ain the r"e a manager p"ays in mnitring and e#a"uating their risk  management a!tin p"an and string the in*rmatin.

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

nalyse the reports , identify risk and prepare plan to reduce them.

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)onduct risk management activities time by time.

eview the risk management process and research on outcomes to implement it on future. 