Tuesday, December 10, 2019
Risk management for Macville
Question: Discuss about the Risk management for Macville. Answer: Introduction: There are various risks associated with any fully functional business operation, including theft, fraud and what not. The damage to the business operation by the risk can have a huge impact on the business operation and processes depending on the magnitude and occurrence frequency of the risk (McNeil, Frey Embrechts, 2015). This assignment will attempt to assess and evaluate the risk situation that have arose for the simulated business scenario for Macville and implement a risk management action plan that with risk treatment options Risk analysis report: For the simulated business scenario the Macville visit and analysis has indentified four potential risks that can harm the operational safety of the organization. In order to analyse individual risks it is important to assess the likelihood, consequence, risk matrix scoring and most plausible treatment for each risk. Banking theft: Likelihood: The likelihood of the cash theft from the premises can occur easily (Lam, 2014). Within the first few months, before proper security is set up for the store the potential for overnight theft will remain. Consequence: upon the meeting with the management board it was discovered that overnight theft of cash left on premises up to $4000 will not have major consequences for the organization however multiple occurrences may have a detrimental effect on the financial standing. Treatment option: The most plausible treatment for cash theft from the premises will be the theft cash insurance for the store and setting up advanced and efficient security system (Lam, 2014). Managers travel risk: Likelihood: The store manager has a lot of responsibilities upon their shoulders, and sometimes they have to travel a lot as well. Any risk of physical injury to the manager can be a likely situation in the early days of promotional activities for the store. The manager can wish to demand obscene compensation from the management Consequences: The consequences of a risk like that will be minor with the possibility of the store remaining without the supervision of the manager. Treatment: The solution for this situation can be a set health plan for the employees which will cover any accidental or non accidental health complexities. Other than that care should be taken to ensure for the safety and wellbeing of the staff during promotional visits (Kaplan Mikes, 2012) Law compliance risk: Likelihood: Law compliance is one of the most important sectors that can pose huge challenges in the path for the growth of the store (Hopkin, 2017). The likelihood of the store employees not adhering to the bylaws is very likely, within the end of opening week. Consequences: The meeting with the management revealed that the Toowoomba Council patrols will ensure any non-compliance to be easily revealed and then consequences of that can be highly detrimental to the store Treatment: The only way to ensure that the staff adheres to the laws and regulations is arranging for a monitoring system that will overlook and rectify any instances of noncompliance beforehand. Other than that incorporating penalty system for lack of compliance can be feasible to the organization (Hopkin, 2017). Risk of loss of brand recognition: Likelihood: There can be a lot of instances where the company employees might not agree to the brand promotion strategies (Ghadge, Dani Kalawsky, 2012). For example most of the staff are very conscious of their dressing style and may disagree to wear the store t-shirt readily, the likelihood of it can be within the first three months. Consequences: The consequences of some of the staff not agreeing to do brand promotion can be very detrimental to the brand promotion and the lack of complying attitude of the staff can affect the consumer response. However with the most of the employees being receptive to the employment requirements the consequences of initial non compliance will be minor. Treatment: There is need for binding policies in the contract that will be explained to the staff at the time of induction so that they comply with it. In case some of the staff does not understand the severity of the recruitment clause they should be discussed with the management. The measures should be monitored as well (Ghadge, Dani Kalawsky, 2012). Risk matrix analysis: Risk rating Priority Response Scoring Risk to loss of brand recognition low None or long term 4 Risk to overnight theft Low to medium medium term 8 Risk of physical injury to the store manager Medium to high short term 12 Risk or noncompliance to by laws High to very high Immediately 16 Risk matrix analysis (Duijm, 2015) Risk management action plan: Risk Assess Risk (Score) Controls Monitoring Action Priority (1-5) Timelines Responsible Cash theft risk 4 Enhance security Enable alarm systems Incorporate theft insurance (Aven, 2015) Monitoring the security measures taken Reviewing the insurance cover for the store theft 1 Long term The management and risk analysis team Loss of brand recognition risk 8 Include dress code policy as anon negotiable clause in the recruitment contract Explain and motivate the employee to comply (Aven, 2015) Monitoring the employees for the adherence to dress code policy. 2 Medium term The human resource team and the risk analysis team Risk Assess Risk (Score) Controls Monitoring Action Priority (1-5) Timelines Responsible Travel risk to store manager 12 Initiate health cover plans for the employees (Booth, 2015) Monitoring the health insurance plan developed for the employees 3 Short term The human resource team and the risk analysis team Risk to not complying to by laws 16 Including penalty system for the employees Explaining to the staff the consequences of not complying to by laws (Duijm, 2015) Monitoring the staff for compliance Imposing penalties where necessary to set up positive example 4-5 Immediate Management and the risk analysis team Conclusion: Risks are associated with any professional venture, and the occurrence of it is virtually impossible at the most of times. There fire there has to be effective risk management that can address any risky situation arising that can harm the sustainability of the business in the market. On a concluding note it can be said that although Macville has a number of risks as associated with their business operation but majority of them are minor risks. With the successful implementation of risk management strategies and tactics these risks can be avoided. References: Aven, T. (2015).Risk analysis. John Wiley Sons. Booth, S. A. (2015).Crisis management strategy: Competition and change in modern enterprises. Routledge. Duijm, N. J. (2015). Recommendations on the use and design of risk matrices.Safety science,76, 21-31. Ghadge, A., Dani, S., Kalawsky, R. (2012). Supply chain risk management: present and future scope.The International Journal of Logistics Management,23(3), 313-339. Hopkin, P. (2017).Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers. Kaplan, R. S., Mikes, A. (2012). Managing risks: a new framework. Lam, J. (2014).Enterprise risk management: from incentives to controls. John Wiley Sons. McNeil, A. J., Frey, R., Embrechts, P. (2015).Quantitative risk management: Concepts, techniques and tools. Princeton university press.