BSBRSK501 Risk Management Assignment Sample

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BSBRSK501 Risk Management Assignment

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Part A:

1. A. Significance of reviewing existing risk management practices (policy, process and procedures)

The result of any company's or group's uncertain behaviour is risk. Risk management is a process of identifying potential threats and identifying and utilising available resources to mitigate such threats (Fan and Stevenson, 2018). The risk management strategy must be re-evaluated on a regular basis to keep track of emerging threats and evaluate the effectiveness of risk management methods. The primary goal of risk assessments is to make sure that to detect occupational health and safety concerns and assess the risks they present. To find out whether current control measures are working and if they should be continued.

In addition, policies, procedures, and processes should be reviewed on a regular basis. Therefore, Out-of-date policies put the business in jeopardy. New rules and regulations may make it impossible for outdated policies to operate. New systems and technologies may not be addressed, resulting in inconsistent practises (Mensah, 2019). Scheduling time in the company calendar is the best method to do a proactive review of rules and procedures. Also, reviewing and monitoring of policies, procedures and processes helps organisations to identify new risks that in turn helps in creating a risk mitigation strategy.

B. Rationale for the review

By conducting risk assessments, one can make sure that the workplace is risk-free and everyone engaged is adequately safeguarded against any dangers. A risk assessment begins by identifying workplace risks and ends with putting control measures in place (Willumsen et al., 2019). To assure that organisations remain current and no new risks are created by the new hazards, it is critical to perform risk reviews of policies, procedures, and processes.

C. Advantage of doing the review

Risk assessments provide the main advantage of detecting and assessing workplace health and safety issues. To see whether the present control measures are effective and whether or not they should be kept up.

2. A. Three examples of scope of Risk management

The fundamental boundaries inside which risks should be managed are established by creating a framework for risk management. As a consequence, the parameters for the remainder of the Risk Management process are also defined. A risk management plan and activities involve defining fundamental assumptions about the organization's external and internal environments, as well as its overall goals.

Defining the context for Risk Management scope entails identifying the:

  • businesses and processes (to be evaluated), as well as projects and activities
  • a project's overall length; an activity's
  • a comprehensive list of all the Risk Management actions to be carried out, including any additional information that may be relevant.
  • Risk Management tasks and duties of different sections of the organisation

B. Brief explanation of the Scope of risk management

Defining fundamental assumptions about a firm's external and internal environment, as well as the overall goals of the Risk Management process and activities, are all step in the risk management process (Szyma?ski, 2017). An important part of risk management is seeing issues before they happen and using chances to their advantage. It is possible to use risk-handling actions at any point in the project's lifecycle.

3. A. 8 Principles of the AS/NZS ISO 31000 Risk Management

This standard, ISO 31000, lays forth concepts and general recommendations to help companies set up a risk management framework, put it into operation and keep on improving it. This Standard offers a general approach to risk management. It may be used for a broad variety of actions, judgments, and operations by any kind of public or private business, community-based organisation, or even a single person(Hutchins, 2018). Although this Standard may be applicable to a wide range of groups and organizations, the word "organisation" has been used throughout the explanation of this Standard to make it easier to understand.

These 8 guidelines should be followed by a company if it wants to have an effective risk management strategy.

  1. Risk management must be integrated into all business operations and activities
  2. The approach must be structured and comprehensive.
  3. Processes and the risk management framework should be customized to suit the organization’s goals and context.
  4. Stakeholders must be involved with the management framework; it must be inclusive.
  5. Risk management must be dynamic and robust; pre-emptive thinking, anticipating, detecting, acknowledging and responding to changes.
  6. Risk management takes into account any limitations of available information.
  7. Human and cultural factors are paramount, and should be considered at all stages and aspects of risk management.
  8. The risk management framework is continuously improved through learning and experience” (Hutchins, 2018).

B. Benefit of the AS/NZS ISO 31000 Risk Management 

The benefits of ISO 31000 is to:

  • Enhance the effectiveness of operations and governance.
  • Boost the trust of key stakeholders in risk management practises.
  • Incorporate obligatory and optional reporting requirements into operational controls to make them more robust
  • Strengthen organisational resilience while also improving company performance and crisis management skills (Sari et al., 2020).

4. Example of each legislation for taking risk actions

a. Duty of care

“Safe, high-quality care and services”.

b. Company law

Constructing a strong internal framework for handling privacy issues, such as privacy notifications that are easy to understand.

c. Contract law

“Protect Contract Data Using Encryption”

d. Environmental law

Meet community expectations and prevent the use of plastics, pesticides that causes environmental harm

e. Freedom of information

Implement technological solutions to identify and eliminate risks before they compromise data before it's already too late.

f. Industrial relations law

Ascertain that risk control measures were up to date, correctly implemented, and appropriately maintained.

g. Privacy and confidentiality

Technical controls such as design changes or encryption.

h. Competition and Consumer Law

provide information about product attributes like as quality, potency, quantity, purity, standard, and pricing to help safeguard consumers from unethical business activities.

i. Disability law

People in Australia are protected against disability discrimination by the Federal Disability Discrimination Act, which goes into force in 1992(Caillaud, Haas, and Castro, 2021). In many areas such as education, legal, social, cultural, economic, and political, promote and defend disabled people's rights and dignity.

5. a. An example of a risk management activity

The goal of risk assessment is to divide hazards according to how likely they are to be lost, which may result in harm.

  1. Risk Identification: To minimise the impact of risk, the project manager must identify it in advance and implement a strategy for mitigating it as effectively as feasible. Many risks may benefit from a project (Dvas and Dubolazova, 2018). To determine the greatest risk to the project's success. It's essential to divide up the danger into various groups.
  2. Risk Analysis: It's vital to consider about the likelihood and severity of each identified risk throughout the risk analysis process.
  3. Risk Control: Managing risks to achieve desired results is known as risk control. It is important to be the most damaging and probable hazards in a plan's identification of risks.

B. Importance of supporting stakeholders

Stakeholder risk management may improve a project's chances of gaining public support. There are many advantages to involving stakeholders (Acebes et al., 2021). These include a better knowledge of risk, the building of trust and confidence as stakeholders feel engaged in decision-making through actions that impact their future.

C. Discussion of one method to gain stakeholder trust

Relationships with stakeholders are important because they have a stake in the project. The project may go uphill or downward depending on the performance of the project's key stakeholders. A variety of variables combine to determine successful relationships with key stakeholders. For projects with bottlenecks, making it much easier for stakeholders to give input is key. It's critical to let stakeholders express their ideas without fear of being judged (Gao and Zhang, 2017). Many project management tools now include sophisticated documentation systems to keep users informed about the status of the project. Which means that online surveys and interaction with stakeholders will assist to lower the threshold to participation. It is possible to force non-technical people to complete simple multiple-choice surveys.

6. Three ways of communication with relevant stakeholders

Stakeholders are essential as they provide feedback and support to the project and company. Stakeholder engagement means the exchange of information about a project or group between the project's leaders and the many stakeholders (Dawla and Kamal, 2021). Stakeholders are involved in the stakeholder engagement process if they make the choices that have an impact on the project. Stakeholder communication may take one of three forms:

Set up a meeting:

To reach a large number of individuals quickly, companies often use stakeholder meetings, which may save them time otherwise spent on individual communications. PowerPoint, Prezi, or any one of the online mind mapping software options are the best methods for communicating the message (Acebes et al., 2021). Stakeholders being present in the same room should reduce the likelihood of misunderstandings.

Send a newsletter to all of the contacts

If the business has an intranet or collaboration platform, it is able to determine a newsletter that is delivered to stakeholders on a regular schedule using that platform. It's a wonderful way to include those who aren't necessarily engaged in the project.

Online encounters that are "screen to screen" distinct from one another

Individual face-to-face encounters are the greatest method to get the word through to stakeholders, despite how time demanding they may be. People react differently to different presenting styles, so engaging with different stakeholders helps in addressing their issues in more depth and control (Bashar, 2020). Because many meetings are conducted through online communication and collaboration tools, "screen to screen" has become the new face to face because of visually distributed teams and the rising practice of incorporating independent freelancers in projects.

7. A. Importance of encouraging stakeholders to assist in risk identification

As a result, it's critical to include risk stakeholders because they are informed of possible consequences and may voice their thoughts on a risk, action, or outcome if required. Interacting with a diverse group of risk stakeholders may also help ensure that diverse views and expertise are heard on an issue; various individuals can bring a range of perspectives and skills to the table (Gao and Zhang, 2017). Stakeholders in the risk management process are often consulted early on. This procedure may be beneficial in establishing the situation and identifying potential dangers. Stakeholders may be contacted a second time over the course of the monitoring and evaluation processes. Risk Analysis of the efficacy of risk management methods may also be beneficial for stakeholders. Some risk management procedures call for the signature of key stakeholders on a risk action plan to demonstrate their agreement with the tactics implemented.

Task B:

1. Organisational Background

NatureCare Products has its home in Brisbane, Australia. It was founded in 1996 and has been in operation ever since. Environmentally safe and natural components are being used in NatureCare Products's skincare products. Eco-friendly packing is also taken into account. A tiny facility makes all of the items, which are subsequently delivered to health food stores throughout Australia. Health food stores receive the goods that are delivered to them and then deliver them to their customers (Nicolson, Ahmed, and Nicolson, 2020). The firm also conducts business online, accepting client orders and delivering the goods straight to them through the company's website. 70 percent of this company's clients are women in business suits. The CEO and two company shareholders recently assembled on a board meeting, and it was agreed that the firm would attempt to grow its business by 10% by opening retail locations in Sydney, Brisbane, and Melbourne. The business adheres to the "AN/NZS ISO31000:2009" Risk management concepts and standards in terms of policy and practise. A total of eight employees works for the business, including the following: an office manager, an administration assistant, an operations manager, the company CEO, a marketing manager, a marketing assistant and an accounts manager.

2. Identification of five internal stakeholder and risk concerning each stakeholder

Board of directors – A firm's board of directors oversees the company's overall functioning and makes critical business decisions. The main risk associated with them is that of ineffective leadership and management (Erasmus and Coetzee, 2018). The main risk associated with them is that of ineffective leadership and management.

Operations department - The operations department includes workers engaged in the production of the goods and their suppliers, as well as those in management positions who oversee the operations. In this department, failures in IT systems, fraud, and the loss of critical personnel are all possibilities.

Sales department– The sales department is made up of people whose only responsibility it is to make sales of the company's products. A lack of product knowledge and a lack of product knowledge.

Marketing Department - The market research department is in charge of promoting the company's goods, and hazards include improperly pricing a product or Advertising to the incorrect audience by using the wrong medium (Erasmus and Coetzee, 2018).

Department of Human Resources (HR) - The HR division is in charge of personnel administration. The dangers include things like poor management practises, poor employee conduct, and so on.

3. Identification of five external stakeholder and risk concerning each stakeholder

Promotional bodies– Media, marketers, and others who collaborate with the company to promote the product are examples of promotional bodies. Choosing the wrong promotional bodies or marketers are the likely risks related with promotional bodies. 

Customers– Customers are indeed the organization's most significant and critical stakeholders, since they generate the company's income (Nguyen et al., 2019). Customer dissatisfaction, poor feedbacks are the key risks associated with customers.

Funding bodies for the organisation- Investors and special organisations that give the organisation with the money it needs to operate are referred to as funding bodies. Refusal to grant funding and inadequate investors are the key risks associated with funding bodies of the organisation.

Suppliers - Suppliers are all in charge of supplying the company with raw materials. Supplier concerns include stricter environmental regulations and a smaller pool of available suppliers.

Government - The government is in charge of upholding the organization's rules and regulations. As a result, the main risks associated with government risks are modifications in law or executive branch actions that may have an effect on current legislation.

4. Risk identification in the following categories

Factors

Identified risks

Risk treatment

Political

Before and after elections, the government's policies toward the sector change.

Modifications to the company's standards and circumstances due to regulatory requirements.

Developing tactics that are as independent as feasible of government policies.

Investigate and implement necessary modifications to the company's existing procedures, standards, and circumstances.

Economical

GDP changes that are expected in the future.

The country's employment rate

To build a solid base of reliable investors and consumers.

Analyze and maximise the number of employees.

Social

Customers' and competitor's customers' changing needs

Real-world research to learn about consumers' present and future needs is being carried out throughout the nation.

Technical

Scientists across the globe have predicted significant developments in technology.

Keeping abreast on all of the latest technology developments across the globe.

Environmental

Competitors' waste reduction practises.

An unobtrusive examination of the environmental practises used by the competition

Legal

Governing bodies' rules on consumers and product authenticity.

Examination of the product's legal authenticity criteria.

(Source: Nurmi and Niemelä, 2018; Gul et al., 2021)

5. a. SWOT analysis of the organisation’s risk management process

Strengths

Weaknesses

Organic and eco-friendly raw materials have been utilized in the production of the product.

Brand recognition is very important.

There are retail and online shops that provide products tailored to meet the requirements of different types of customers.

Products with a high price tag available just to women

There aren't many since the products are tailored to different skin types.

High levels of competition as a result of low-cost goods.

Opportunities

Threats

a move into the male market

International trade and commerce

innovation in goods like sunscreen, facial cleansers and packs for the face

Other well-known companies' aggressive marketing

Product innovation that reduces the cost while maintaining acceptable quality

(Source: Galabova, 2019)

6. a. Success factors

  • The board of directors of the business makes decisions about the adoption of risk management analysis throughout the organisation.
  • Existing workers are aware of the need of doing a risk management study.
  • The training department's ability to provide.

b. Goals and objectives

Goal – To integrate risk management techniques across the whole company.

Objectives:

  • Include risk management in the company's routine activities.
  • To ensure that risk management is used consistently throughout the organisation.

7. Risk assessment matrix

Risks

Severity ratings

Consequences

Likelihood

Priority rating

Treatment methods

“Incompetency of the training department”

5

Inadequate information of the employees

2

High

Effective training

“Less number of funding bodies”

5

Reduced production

 

Medium

Acknowledging new funding bodies

“Incompetency of the existing employees”

5

Ineffective knowledge of workers

2

High

Recruitment of effective trainers

(Source: As created by author)

9. Action plan for the identified risks

Risks

Action Taken

Monitoring Processes

Communication Method

Responsible Person

Time Bound

Incompetency of the Existing Employees

Setting encouraging goals for employees and providing rewards and bonuses as per their competitiveness.

Implementation of process monitoring system.

Face-to-face Communication.

Human resource manager

1st November, 2021 to 28th February, 2022.

Incompetency of the Training Department

Implementing different resilient and effective approaches in order to develop the employee training system.

Implementation of beneficiary monitoring system.

Progress report of employee training.

Human resource manager.

1st March, 2022 to 30th June, 2022.

Less Number of Funding Bodies

Approaching to local financial organisations and banks to gather sufficient funds for the organisation.

Financial monitoring system.

Emails, meetings or conferences, etc.

Chief financial officer.

1st July, 2022 to 31st October, 2022.

(Source: Mozhayeva et al., 2019)

10. Methodology

It will be necessary to apply a programme risk methodology to determine the action plan's overall success rate, which would provide an organisation a comprehensive perspective of the risk management process (Nwangwu, 2021). The focus is not on identifying risks in a realistic manner, but rather on how risks should be discovered, the techniques to be utilised, the people to be engaged, as well as the papers and templates which should be used.

11. Insurance needed

Cosmetic companies need product liability coverage to protect themselves against claims that their goods have caused harm, loss, or injury to their customers. As a result, product liability insurance shields companies against a wide range of risks (Linkov and Palma-Oliveira, 2017). It protects businesses that become responsible for legal costs if a buyer discovers that a product is faulty or damaged and needs to sue for their losses, damages, or property damage. In this way, the company will use this insurance.

References

Acebes, F., Pajares, J., González-Varona, J.M. and López-Paredes, A., 2021. Project risk management from the bottom-up: Activity Risk Index. Central European Journal of Operations Research29(4), pp.1375-1396.

Bashar, M.A., 2020. Exploring New Ways of Communicating CSR to the Relevant Stakeholders: An Empirical Study. Business and Management Research9(2), pp.25-48.

Caillaud, S., Haas, V. and Castro, P., 2021. From one new law to (many) new practices? Multidisciplinary teams re?constructing the meaning of a new disability law. British Journal of Social Psychology60(3), pp.966-987.

Dawla, B. and Kamal, A.R.M.M., 2021. Effective Social Behavior Change Communication with Stakeholders.

Dvas, G.V. and Dubolazova, Y.A., 2018. Risk assessment and risk management of innovative activity of the enterprise. In Innovation Management and Education Excellence through Vision 2020 (pp. 5650-5653).

Erasmus, L. and Coetzee, P., 2018. Drivers of stakeholders’ view of internal audit effectiveness: Management versus audit committee. Managerial Auditing Journal.

Fan, Y. and Stevenson, M., 2018. A review of supply chain risk management: definition, theory, and research agenda. International Journal of Physical Distribution & Logistics Management.

Galabova, B., 2019. Application of the SWOT-analysis in project management in business organizations. Science & Research.

Gao, S.S. and Zhang, J.J., 2017. A comparative study of stakeholder engagement approaches in social auditing. In Perspectives on corporate citizenship (pp. 239-255). Routledge.

Gul, S., Gani, K.M., Govender, I. and Bux, F., 2021. Reclaimed wastewater as an ally to global freshwater sources: a PESTEL evaluation of the barriers. AQUA—Water Infrastructure, Ecosystems and Society70(2), pp.123-137.

Hutchins, G., 2018. ISO 31000: 2018 Enterprise Risk Management. Greg Hutchins.

Islam, M.A., 2017. SWOT Mix and PESTEL Analysis: Effective Tools of Risk Management of Leasing Companies. The Millennium University Journal2(1), pp.1-18.

Linkov, I. and Palma-Oliveira, J.M. eds., 2017. Resilience and risk: Methods and application in environment, cyber and social domains. Springer.

Mensah, J., 2019. Sustainable development: Meaning, history, principles, pillars, and implications for human action: Literature review. Cogent Social Sciences5(1), p.1653531.

Mozhayeva, T.P., Simkin, A.Z., Sorokina, E.I. and Proskurin, A.S., 2019, May. Management of personnel risks in the organisation quality management system. In IOP Conference Series: Materials Science and Engineering (Vol. 537, No. 4, p. 042061). IOP Publishing.

Nguyen, T.H.D., Chileshe, N., Rameezdeen, R. and Wood, A., 2019. External stakeholder strategic actions in projects: A multi-case study. International Journal of Project Management37(1), pp.176-191.

Nicolson, W., Ahmed, F. and Nicolson, I.W., 2020. Manage Project Risk.

Nurmi, J. and Niemelä, M.S., 2018, November. PESTEL analysis of hacktivism campaign motivations. In Nordic Conference on Secure IT Systems (pp. 323-335). Springer, Cham.

Nwangwu, G., 2021. Risk Allocation and Mitigation in Nigeria’s Privatisation Programme—A Case Study of Electric Power Sector Privatisation. Journal of Power and Energy Engineering9(8), pp.1-17.

Sari, E.M., Simanjuntak, M.A., Wibowo, M.A. and Sinaga, O., 2020. COMPARISON OF RISK MANAGEMENT ANALYSISBETWEEN PMBOK (2017), ISO (31000: 2018) AND AS/NZS (4360: 2009). PalArch's Journal of Archaeology of Egypt/Egyptology17(10), pp.1439-1451.

Szyma?ski, P., 2017. Risk management in construction projects. Procedia Engineering208, pp.174-182.

Willumsen, P., Oehmen, J., Stingl, V. and Geraldi, J., 2019. Value creation through project risk management. International Journal of Project Management37(5), pp.731-749.

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