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Manage risk

BSBRSK501

Student name :

Student No. :
Task 1: Report on Risk
Assessment description

For the MacVille Pty Ltd simulated business scenario provided, you are required to assume
the role of Brisbane store Assistant Manager, Ash, who has just been promoted to be
Manager of a new store. Ash has been tasked with conducting a risk management analysis of
this new venture.

There are three stages to this project: (1) review, (2) analyse and plan, and (3) monitor. This
project is divided into three assessment tasks as follows:

Assessment Task 1 Assessment Task 2 Assessment Task 3

Risk review report, Risk analysis report,


email to action plan and risk Monitoring report
stakeholders and treatment
meeting with CEO

For this assessment task, you will need to review the simulated business’s risk management
processes and determine the scope and objectives, taking into account stakeholders and both
internal and external environmental factors affecting the organisation. Once you have
gathered this information, you are to identify risks and write a draft report to the CEO. You will
meet with the CEO to discuss your report, seek support for your findings, and approval to
communicate risk management processes to relevant stakeholders for their feedback and
participation.
Procedure

You will assume the role of Ash, Assistant Manager of the Brisbane MacVille café, who has
just been promoted to Manager of the new Toowoomba store.

In preparation for the new venture, Ash has been tasked with conducting a risk management
analysis of this project:

Excerpt of email from CEO Paula Kinski

From: CEO – P. Kinski

To: Assistant Manager – Queen Street store

Re: New Toowoomba store

Congratulations on your new appointment. Prior to taking up your position as Manager


of our new Toowoomba store, located in Ruthven Street, the Board of Directors has
asked that the risks in this project be appropriately managed.

I want you to undertake this task as it will give you significant insight into the store’s
operations, it will ensure a smooth transition for Hurley’s Café staff into the MacVille
family and will encourage you to give ongoing support for our risk management
initiatives.

I would like you to approach this task in three stages and meet with me at the end of
each phase to review your work and discuss your plans for the subsequent phases.
The three stages in this risk management task will include:

1. Review.
2. Analyse and plan
3. Monitor

Your primary risk management focus is directed to the ongoing operations of the
Toowoomba café. The strategic and investment risks of this project are being
managed by the Board. To this end, you are to consider any risks that could impact
on human resources management, financial operations, WHS, our supply chain and
the local governance and overall compliance issues.

MacVille has agreed to employ all existing staff at Hurley’s Café on three months’
probation. The current supervisor of Hurley’s, James Mansfield, has been offered the
position of 2nd In Charge and he has accepted.
While settlement on the purchase of the business is not for another few weeks, the
seller has agreed to grant us full access to the store’s operational processes and
store information. You should liaise weekly with the Finance, Audit and Risk
Management (FARM) Committee here at head office concerning the marketing,
finance and store management functions that you are investigating. I will set up a
regular meeting for you.

Head office has a report on a similar expansion conducted by the NSW team that
may help you in your research. You may need to review other statistical information
and engage specialists to help you with your investigation. The legal firm Goldsmith
Partners are advising MacVille on the Hurley’sCafé acquisition and would be
available to help you with legal or any compliance issues.

The landlord of the shop in Toowoomba, Ron Langford, is also a local councillor and
has offered his assistance in getting established in Toowoomba. He has offered his
availability for email address for correspondence.

When you have finished your report, please name it according to our document
naming conventions and send it through. Once I have received and discussed your
risk review report, we can move onto the next stage of the risk management process.

Regards

P.Kinski

CEO MacVille Cafés (Qld)

1. Review the provided MacVille simulated business scenario information and


documentation provided in the Appendices of this task.
I have reviewed the simulated business scenario about MacVille. Here are some important
information.

Site visit –New Toowoomba store (the existing Hurley’s Café)


You received permission from Paula to travel to the Toowoomba store to start your research.
Paula had cleared it with James Mansfield, the current senior supervisor, who will spend most
of the day with you helping answer your queries. She also arranged for you to spend time with
Ron Langford, the store’s landlord.

Meeting with James Mansfield


You arrived at the café and noted the two hours of drive time that it took to get there from the
CBD of Brisbane. You met with James, who took you through a complete overview of the
store and the surrounding area. He was OK with the idea that you needed to take notes in
preparation for a report.

Meeting with Ron Langford


You met with Ron Langford in his office to discuss the café, council by-laws and aspects
concerning the surrounding district.

2. Write a report for the CEO (your assessor) that addresses the following:
a. The effectiveness of the MacVille Risk Management Framework in supporting the
principles and processes of risk management, set out in the risk management
standard AS/NZS ISO 31000:2009. Outline the purpose and key elements of the
standard in your discussion.
MacVille has agreed to employ all existing staff at Hurley’s Café on three months’ probation.
The current supervisor of Hurley’s, James Mansfield, has been offered the position of 2nd In
Charge and he has accepted.

While settlement on the purchase of the business is not for another few weeks, the seller has
agreed to grant us full access to the store’s operational processes and store information. You
should liaise weekly with the Finance, Audit and Risk

ISO 31000 is a family of standards relating to risk management codified by the International
Organization for Standardization.

The purpose of ISO 31000:2009 is to provide principles and generic guidelines on risk
management.

ISO 31000 seeks to provide a universally recognised paradigm for practitioners and
companies employing risk management processes to replace the myriad of existing
standards, methodologies and paradigms that differed between industries, subject matters
and regions.

b. Identify and describe the scope of risk management required in your role.
Scope of risk management:
 Project – MacVille to expand their operations in Queensland and purchase and rebrand
an existing cafe in Toowoomba.
 Business unit – MacVille cafes Queensland.
 Risk in relation to functions – human resources management, financial operations, WHS,
supply chain, local governance and compliance issues.
c. Identify and describe the critical success factors, goals or objectives for
areas included in the scope.
Goals – should include some of the following:
i. To appropriately manage the risks involved with the operation of the
Toowoomba store.
ii. To give the new manager significant insights into the store’s operations.
iii. To ensure there is a smooth transition to the MacVille systems.
iv. To encourage the new manager to give ongoing support for risk
management.

d. Identify relevant internal and external stakeholders, their role in the risk
management process, and any issues or concerns they have raised.
Complete the Table of Stakeholders Template (provided in Appendix 3 of this
task) and attach to your report.

Stakeholder Internal/exter Role in process Stake in process


nal
The board Internal Responsible for Potential asset loss
overall risk both tangible and
management. intangible.
Paula Kinski Internal Chief Executive Potential loss of
Officer. reputation and
promotion
prospects.
Senior Internal Responsible for the Potential loss of
management team overall risk reputation and
management and promotion
individually prospects.
responsible for risk
management in
individual cafes.
Finance, Audit and Internal The Finance, Audit Potential loss of
Risk Management and Risk reputation and
(FARM) Committee Management promotion
(FARM) Committee prospects.
are required to report
at board meetings on
internal controls. The
FARM committee
oversees internal
audit, external audit
and management as
required in its review
of internal control.
Ron Langford External Councillor and Potential loss of a
landlord. tenant.
James Mansfield Internal Hurley’s store Potential loss of
supervisor. promotion.
Hurley’s staff Internal Employees. Potential loss of
employment.
Personal safety
Goldsmith Partners External Legal and Potential loss of a
compliance advice. client and potential
for being sued for
advice given.

e. Complete a PEST analysis and a SWOT analysis to identify risks associated


with the scenario. Outline the relevant legislation, regulations and standards
(including those at a local level, i.e. Toowoomba Council).

A SWOT analysis measures a business unit, a proposition or idea; a PEST analysis measures a market.

A SWOT analysis is a subjective assessment of data which is organized by the SWOT format into a logical
order that helps understanding, presentation, discussion and decision-making. The four dimensions are a
useful extension of a basic two heading list of pro's and con's
SWOT analysis can be used for all sorts of decision-making, and the SWOT template enables proactive
thinking, rather than relying on habitual or instinctive reactions.
The SWOT analysis template is normally presented as a grid, comprising four sections, one for each of the
SWOT headings: Strengths, Weaknesses, Opportunities, and Threats. The free SWOT template below
includes sample questions, whose answers are inserted into the relevant section of the SWOT grid. The
questions are examples, or discussion points, and obviously can be altered depending on the subject of the
SWOT analysis. Note that many of the SWOT questions are also talking points for other headings - use
them as you find most helpful, and make up your own to suit the issue being analyzed. It is important to
clearly identify the subject of a SWOT analysis, because a SWOT analysis is a perspective of one thing, be
it a company, a product, a proposition, and idea, a method, or option, etc.
SWOT analysis is commonly presented and developed into a 2x2 matrix, which is shown and explained
within the SWOT analysis matrix section.

a. PEST analysis should include at least the following.


i. Define Political factors
(1)
(2) Political factors that affect MacVille – federal legislation
concerning efficient water usage, by-law allowing cafes to expand
their footpath dinning.
ii. Define Economic factors
(1)
(2) Economic factors that affect MacVille – gross regional
product growth of 8.9%, number of visitors down 18%.

iii. Define Social factors


(1)
(2) Social factors that affect MacVille – place for retirees,
population growing.
iv. Define Technology factors
(1)
(2) Technology factors that affect MacVille – WIFI in cafe, an
innovative frozen par-bake cooking system, Federal
Government’s National Broadband Network.

b. Using the following website

The SWOT analysis is an extremely useful tool for understanding and decision-making for all
sorts of situations in business and organizations. SWOT is an acronym for Strengths,
Weaknesses, Opportunities, Threats. Information about the origins and inventors of SWOT
analysis is below. The SWOT analysis headings provide a good framework for reviewing
strategy, position and direction of a company or business proposition

Completing a SWOT analysis is very simple, and is a good subject for workshop sessions.
SWOT analysis also works well in brainstorming meetings.
Use SWOT analysis for business planning, strategic planning, competitor evaluation,
marketing, business and product development and research reports. You can also use SWOT
analysis exercises for team building games.
Note that SWOT analysis is often interpreted and used as a SWOT Analysis 2x2 Matrix,
especially in business and marketing planning.
In addition to this 2x2 matrix method, SWOT analysis is also a widely recognized method for
gathering, structuring, presenting and reviewing extensive planning data within a larger
business or project planning process.
See also PEST analysis, which measures a business's market and potential according to
external factors; Political, Economic, Social and Technological. It is often helpful to complete a
PEST analysis prior to a SWOT analysis. In other situations it may be more useful to
complete a PEST analysis as part of, or after, a SWOT analysis. See also Porter's Five
Forces model, which is used to analyse competitive position.

As a more general guide, here is a free SWOT analysis template worksheet (doc file), and the
same free SWOT analysis tool (pdf format).
If you have difficulty opening the above doc file here are two other formats:

 SWOT Analysis Template doc file using table format instead of text-boxes (portrait
layout)
 SWOT Analysis Template doc for Apple Mac

A SWOT analysis measures a business unit, a proposition or idea; a PEST analysis


measures a market.
A SWOT analysis is a subjective assessment of data which is organized by the SWOT format
into a logical order that helps understanding, presentation, discussion and decision-making.
The four dimensions are a useful extension of a basic two heading list of pro's and con's (free
pro's and con's template here).
SWOT analysis can be used for all sorts of decision-making, and the SWOT template enables
proactive thinking, rather than relying on habitual or instinctive reactions.
The SWOT analysis template is normally presented as a grid, comprising four sections, one
for each of the SWOT headings: Strengths, Weaknesses, Opportunities, and Threats. The
free SWOT template below includes sample questions, whose answers are inserted into the
relevant section of the SWOT grid. The questions are examples, or discussion points, and
obviously can be altered depending on the subject of the SWOT analysis. Note that many of
the SWOT questions are also talking points for other headings - use them as you find most
helpful, and make up your own to suit the issue being analysed. It is important to clearly
identify the subject of a SWOT analysis, because a SWOT analysis is a perspective of one
thing, be it a company, a product, a proposition, and idea, a method, or option, etc.
SWOT analysis is commonly presented and developed into a 2x2 matrix, which is shown and
explained within the SWOT analysis matrix section.
define a SWOT analysis and insert additional examples for each of the S.W.O.T,
insert at least 4 additional examples below.
SWOT analysis should include at least the following.
i. Strengths – store on the corner of the two main streets of the city,
innovative and popular range of rice wraps.
(1)
ii. Weaknesses – the lack of sales promotion techniques, fit-out in parts
looked old and unattractive.
(1)
iii. Opportunities – opportunities for opening more cafes in the surrounding
shopping centres, by-law allowing cafes to expand their footpath dinning.
(1)
iv. Threats – international chain of coffee shops opening a store in the
Toowoomba CBD, legislation concerning efficient water usage.
(1)

f. Describe the methods of research that you used to complete your PEST and
SWOT analysis. For example, how you approached the simulated business
information; legislation, regulations, etc.; and any other information or
research on risk that applies to the scope of your report.
3. Other research information I have used are:
a. Site visit with James Mansfield – primary data: store operations (fit-out, cash handling,
promotions, employment, water usage).
b. Interview with Ron Langford – primary data: external environment (by-laws, government
legislation, economic, expansion options, competition, technology plans).
c. Extract from Toowoomba regional council – secondary data: economic indicators (tourist
numbers, unemployment, population growth, regional growth).
d. Extract from MacVille NSW – secondary data: key problems (problems with acquiring and
re-branding existing stores).
 Web analytics refers to gathering and analyzing usage data to gain insights into consumer
actions and attitudes. Tools such as Web Analytics and Omniture have made it possible for
companies to adopt a real data driven approach to
 Understanding usage patterns to optimize the experience for the user. In the case of
gamification, it is very useful to know the impact on player behavior to adjust and optimize the
strategy as needed
 Brainstorming is a tool for creative problem solving, wherein a group of people come together to
contribute ideas spontaneously. It is particularly useful when you want to break out of stale,
established patterns of thinking, so that you can develop new ways of looking at things. When a
interdisciplinary product team brainstorms to come to a common vision of the solution, it helps
get buy-in for the chosen solution

 A focus group is a qualitative research technique where a group of individuals are asked their
opinions, perceptions, beliefs, attitudes or practices regarding a product, service or concept. It is
important to pay attention to group dynamics when conducting a focus group since the loudest
voice may dominate the conversation and drown out other opinions

WEEK 2
e. Complete the analysis of risk for the scenario by summarising the scenario
and identifying a list of risks to the project.

Human resources management risk:


i. No written policy and procedures manual and limited staff training – could lead
to errors and inappropriate actions.
ii. Authorisation system not clearly defined – could lead to fraud.
iii. Lack of sales promotion techniques – impacts of the stores financial viability.

Financial operations risk:

i. No separation of duties – could lead to fraud.


ii. The banking was not done every day and was kept on the premises overnight
without a safe – assets not protected could lead to thief.
iii. Not all takings from the cash register by family staff members were recorded –
unacceptable behaviour in a company store and could lead to misappropriation
of funds.
WHS risk:

i. Manager two hour drive to and from weekly manager’s meeting – could lead to
physical injury.
ii. Unstable and broken chairs – customers injured; compliance breach and
customer suing, reputation loss.
iii. Carpet that was worn through was simply taped over with gaffer tape –
compliance breach and customer suing, reputation loss.
iv. No established process for dealing with injuries happening at work – staff need
a quick and organised response to injuries; staff work loss, unions suing,
reputation loss.

Supply chain risk:

i. Impractical to deliver fresh pastry from the company’s central bakery plant in
timely manner – brand loss, quality service loss.
ii. Supply of company branded supplies – brand loss.

Local governance and compliance risk:

i. Water use – company could be fined – reputation/brand loss.


ii. Incomplete employment records – unions could sue – government penalties –
reputation/brand loss, $50,000 fine.
iii. Confidentially of records not guaranteed – privacy law breach.

4. Submit your report as per the specifications below. Be sure to keep a copy for your
records.
 A risk review report, including a completed table of stakeholders
 Email communication to stakeholders
 Summary notes from your meeting with the CEO.

5. After you have developed your report, write an email that is intended for relevant
stakeholders (identified in Step 2). Your email should clearly ask stakeholders for
input, include a list of risks you have identified and invite them to assist in
identifying any additional risks.

Dear all stakeholders,

I am asking my stakeholders for their feedback regarding the current status of risk management
and what else the team needs to consider when addressing the risks associated with Mac Ville
Café opening a store in QLD.

Script to all stakeholders:


1. Greet all
2. State the purpose of the communication
3. Explain current risk practices
4. Ask for input and feedback to modify or alter current policies and procedures
5. Thank them

Human resources management risk:


iv. No written policy and procedures manual and limited staff training – could lead
to errors and inappropriate actions.
v. Authorisation system not clearly defined – could lead to fraud.
vi. Lack of sales promotion techniques – impacts of the stores financial viability.

Financial operations risk:

iv. No separation of duties – could lead to fraud.


v. The banking was not done every day and was kept on the premises overnight
without a safe – assets not protected could lead to thief.
vi. Not all takings from the cash register by family staff members were recorded –
unacceptable behaviour in a company store and could lead to misappropriation
of funds.
WHS risk:

v. Manager two hour drive to and from weekly manager’s meeting – could lead to
physical injury.
vi. Unstable and broken chairs – customers injured; compliance breach and
customer suing, reputation loss.
vii. Carpet that was worn through was simply taped over with gaffer tape –
compliance breach and customer suing, reputation loss.
viii. No established process for dealing with injuries happening at work – staff need
a quick and organised response to injuries; staff work loss, unions suing,
reputation loss.

Supply chain risk:

iii. Impractical to deliver fresh pastry from the company’s central bakery plant in
timely manner – brand loss, quality service loss.
iv. Supply of company branded supplies – brand loss.

Local governance and compliance risk:

iv. Water use – company could be fined – reputation/brand loss.


v. Incomplete employment records – unions could sue – government penalties –
reputation/brand loss, $50,000 fine.
vi. Confidentially of records not guaranteed – privacy law breach.

6. Submit your report as per the specifications below. Be sure to keep a copy for your
records.
 A risk review report, including a completed table of stakeholders
 Email communication to stakeholders
 Summary notes from your meeting with the CEO.
Audience Communication Person
When
Stakeholders method responsible

The board 25/11/16 Hosted in the


08:00AM boardroom
 Email invite Risk manager
 Give them a report
 Do a presentation

CEO 2/12/16 Hosted in the


boardroom
0400 PM
Risk manager
 Email invite
 Give them a report
 Do a presentation

Senior management 18/12/16 Team meeting in the


team boardroom
0220PM
Risk manager
 Email invite
 Give them a report
 Do a presentation

Finance, Audit and 05/01/17 Make a phone call


Risk Management Risk manager
0300PM
(FARM) Committee
Council and Landlord 13/01/17  Telephone call
 Information letter Risk manager
0700AM
 email

Supervisor 02/02/17 Send email Risk manager


1100AM

Thank you all for your time and input into our company.

Regards

Joyce kemei
7. Send the email to the CEO (your assessor) for review and request a meeting to
discuss identified risks and further risk management processes.

E-Mail

MARCH 21, 2019

To: CEO

Subject: identified risks and further risk management processes.

Good afternoon Ronita

I am writing to inform you about the risk I found during my research

o Supply chain risk


o WHS risk
o Financial operations risk
o Human resources management risk
o Financial operations risk
o Local governance and compliance risk

Looking forward for a discussion with you about the risk.

Regards,

Joyce kemei
8. Meet with the CEO to:
a. discuss your findings, particularly your understanding of the critical success factors
and goals

b. explain the MacVille risk management process


c. discuss how you can communicate with stakeholders about the risk management
processes in this scenario and invite them to participate in discussions to further
identify risks associated with the scenario

d. obtain the CEO’s support for ongoing risk management activities

e. Ask the CEO for input on additional risks


I have met with the CEO and I have discussed all the above information with my CEO.

9. In dot-point form, summarise your discussion with the CEO. This should include any
recommendations they made to you.
 Discuss the finding
 Explained the risk management process
 Discussed how to communicate with stakeholders
 Ask for additional risk input
 Provide written policy approved by CEO
 Approved by CEO purchase of a new safe
 Buy of new furniture money allocated by CEO
 Storage tanks bought to collect rain water

Week 3 – Task 2: Analyse and Treat Risk


Performance objective

For this task you are to analyses the risks you identified in the simulated business scenario to
assess the likelihood and consequence of risks, evaluate and prioritize risks, and determine
options for treatment. You are also required to develop a risk management action plan for the
treatment of risks and communicate it to relevant stakeholders.

Assessment description

For the MacVille Pty Ltd simulated business scenario provided, you are required to assume
the role of Brisbane store Assistant Manager, Ash, who has just been promoted to be
Manager of a new store. Ash has been tasked with conducting a risk management analysis of
this new venture.

Procedure

Part A
1. Review the MacVille simulated business scenario information and documentation
provided in the Appendices of this task and in Assessment Task 1.
I have reviewed the MacVille business scenario provided to me.

2. Develop a report for the CEO (your assessor) that includes the following:
a. For each risk (i.e. the four identified in the scenario for this task), assess the
likelihood of the risk occurring.
Below are the risk taken from this scenario on appendix 1, you will need to state the likelihood
of the event by using the risk matrix below. The different likelihood are:
 Rare
 Unlikely
 Possible
 Likely
 Almost certain
Likelihood:
● Banking risk – theft of cash left on premises –
● Manager’s travel risk –physical injury –
● By-law compliance risk –reputation/brand loss and fines –
● Loss of brand recognition risk – brand non-compliance of staff not wearing the
MacVille uniform, or altering MacVille processes and service expectations –

b. For each risk, assess the consequence of the risk occurring.


You will need to state the consequence of the event by using the risk matrix above. The
different consequences are:
 Minimal
 Minor
 Moderate
 Major
 Severe

Consequence:
 Banking risk – theft of cash left on premises –
 Manager’s travel risk –physical injury –
 By-law compliance risk –reputation/brand loss and fines –
 Loss of brand recognition risk – brand non-compliance of staff not wearing the
MacVille uniform, or altering MacVille processes and service expectations –
c. Develop a risk matrix to assist in prioritising the treatment of the identified
risks, including numerical values (e.g. risk matrix in the Student Workbook).
You will need to rate the below 4 risk from 1 to 4 stating which one needs number 1 priority,
then 2 and so on. The rating will depend on the likelihood and consequence of the event
you have rated for question 2A and 2B
Example if you said the likelihood of the event was almost certain and the consequence was
severe then you would rate this as number 1.
 Banking risk – theft of cash left on premises –3
 Manager’s travel risk –physical injury – 4
 By-law compliance risk –reputation/brand loss and fines –2
 Loss of brand recognition risk – brand non-compliance of staff not wearing the
MacVille uniform, or altering MacVille processes and service expectations – 1

Once you have found the likelihood and consequences for all 4 risk, you will need to add
those on the below risk matrix.
For example; a car accident was likely and the consequence was severe. You would write
car accident as per below.
Consequence

Moderate
Minimal

Severe
Likelihood

Minor

Major
Almost certain Loss by
brand
recognition

Likely By law Car accident


compliance

Possible

Unlikely Management
risk

Rare Banking risk

d. Once you have prioritised the risks, for each, outline at least two suitable
options for treatment.
Banking risk – theft of cash left on premises:
a) Change banks to a closer.
b) Changing of password
Manager’s travel risk – physical injury:
a) Take out travel insurance for your manager’s to prevent any injury
b) Provide correct and more secure mode of transport
By-law compliance risk –reputation/brand loss and fines:
a) Install a water tank for store use and change to native plants.
b) Introduce water saving devices – dual flush toilet, 5–6 star rated (WELS) dishwasher.
c) Change work practices – wash fruit and vegetables in still water, only run dishwasher
when full, select economy cycle if only a light wash required.
Loss of brand recognition risk – brand non-compliance of staff not wearing the
MacVille uniform, or altering MacVille processes and service expectations:

a) Create a service expectation document to advise all staff what is expected.


b) Create punishable rules to worker for failing to compiler with the rules

WEEK 4
e. Include an explanation of the process you used to identify risks and assess
likelihood, consequence and priority. Also include an explanation of why the
options you have suggested for treating the risks are:
i. likely to be effective
ii. Feasible for the organisation.
5 steps of risk management”.

Step 1: Identify the Risk. You and your team uncover, recognize and describe risks that
might affect your project or its outcomes. There are a number of techniques you can use to
find project risks. During this step you start to prepare your Project Risk Register.

Step 2: Analyze the risk. Once risks are identified you determine the likelihood and
consequence of each risk. You develop an understanding of the nature of the risk and its
potential to affect project goals and objectives. This information is also input to your Project
Risk Register.

Step 3: Evaluate or Rank the Risk. You evaluate or rank the risk by determining the risk
magnitude, which is the combination of likelihood and consequence. You make decisions
about whether the risk is acceptable or whether it is serious enough to warrant treatment.
These risk rankings are also added to your Project Risk Register.

Step 4: Treat the Risk. This is also referred to as Risk Response Planning. During this step
you assess your highest ranked risks and set out a plan to treat or modify these risks to
achieve acceptable risk levels. How can you minimize the probability of the negative risks as
well as enhancing the opportunities? You create risk mitigation strategies, preventive plans
and contingency plans in this step. And you add the risk treatment measures for the highest
ranking or most serious risks to your Project Risk Register.

Step 5: Monitor and Review the risk. This is the step where you take your Project Risk
Register and use it to monitor, track and review risks.

Risk is about uncertainty. If you put a framework around that uncertainty, then you effectively
de-risk your project. And that means you can move much more confidently to achieve your
project goals. By identifying and managing a comprehensive list of project risks, unpleasant
surprises and barriers can be reduced and golden opportunities discovered. The risk
management process also helps to resolve problems when they occur, because those
problems have been envisaged, and plans to treat them have already been developed and
agreed. You avoid impulsive reactions and going into “fire-fighting” mode to rectify problems
that could have been anticipated. This makes for happier, less stressed project teams and
stakeholders. The end result is that you minimize the impacts of project threats and capture
the opportunities that occur.

3. Develop an action plan (you may use the Risk Management Action Plan template
provided in Appendix 3 of this task) for implementing risk treatment and attach it
to your report.
You will need to fill in the below action plan with details about the risk level and who is
responsible. Look at the risk matrix below and see where your 4 risk are rated from
question 2C and give them a rating of Low, Medium, High or Extreme.
Risk management plan

Assess
Risk risk Controls Monitoring Timelines Responsible
(L,M,H,E)

Banking risk – Medium 1. Insurance on Store management 1. Insurance on ‘cash on premises’ Accounting
theft of cash left ‘cash on supervision. – pre-settlement. manager
on premises premises’. Regular staff training on 2. Open an account with closest
2. Open an account policy and procedures. bank – pre-settlement.
with closest bank. Head office check of 3. MacVille Policy and procedure
3. Policy and banking records. on bank daily implemented –
procedure Opening week.
requirement to 4. Staff training on policy and
bank daily. procedures – Opening week.

Manager’s travel Extreme?? 1. Management ● CEO supervision 1. Management meetings to finish Coe supervisor
risk – physical meetings to finish ● Toowoomba 3:00 pm – pre-settlement.
injury 3:00pm manager CEO 2. Install teleconferencing – within
2. Install authorized letter to the next 6 months.
teleconferencing leave at 3:00 pm. 3. Management training shift to
3. Management ● Self-monitoring by morning half day sessions – Pre-
training shift to the manager settlement.
morning half day 4. Authorized letter – pre-
sessions. settlement.

By-law High 1. Apply for time to ● Store management 1. Apply for time to ‘Make good’ – Store management
compliance risk – ‘Make good.’ supervision. pre-settlement. supervisor
reputation/brand 2. Policy and ● External audit by 2. New written policy and
loss and fines procedures to specialist. procedures to change work
change work ● Internal company practices – pre-settlement.
practices. audit. 3. Install water saving devices
3. Install water (native plants, tank, dual flush
saving devices toilet systems, 5–6 star (WELS)
Assess
Risk risk Controls Monitoring Timelines Responsible
(L,M,H,E)

(native plants, ● Install a water dishwasher – within the next 6


tank, dual flush usage monitor and months.
toilet systems, 5– staff room 4. External audit by specialist –
6 star (WELS) achievement graph. within the next 6 months
dishwasher.
5. Internal company audit – start in
2 months and then every 3
months.
6. Install a water usage
achievement graph in the staff
room– opening week.

Loss of brand low 1. Create a service ● CEO to monitor 1. New policy on uniforms – within CEO
recognition risk – expectation document ● Audit for risk and the next 2 weeks
brand non- to advise all staff what compliance 2. New policy on procedures
compliance of is expected regarding service expectations – 2
● Provide uniform to
staff not wearing 2. Staff must wear weeks
all staff
the MacVille uniform at all times
● Monitor staff on 3. Provide uniform to all staff as soon
uniform, or
3. create a policy and service expectation as possible – within 3 weeks
altering MacVille
procedures about
processes and
uniform for all staff at
service
MacVille
expectations
4. Communicate your analysis to the Board of Directors by submitting your risk analysis report, along with your
risk management plan, to the CEO (your assessor) for internal distribution.
I have communicated to the Board of Directors (my assessor) my risk analysis report and the risk management plan.

Part B
1. Implement your risk management treatment of your identified risk, such as decreased brand recognition, in
accordance with the requirements provided to you by the CEO (your assessor). You will need to discuss and
agree with your assessor how to provide evidence of your implementation.
I have discussed with my assessor how we will implement the risk management treatment of one of the key risk. We have
both agreed that this will be implemented in our company as soon as possible.
Consequence

management
treatment
Moderate
Likelihood

Minimal

Severe
Minor

Major

risk
Almost certain

Likely Loss of brand


recognitions

Possible By law
compliance

Unlikely By manager
travel risk

Rare Banking risk

Ronita

Manager

21/11/2016
Appendix 1 – Scenario – MacVille Pty Ltd simulated business

Background
The MacVille Board has reviewed the previous report you developed, and has requested
further information for four of the identified risks, including options for reducing the risk
levels. These risks are as follows:

● Banking risk – theft of cash left on premises.

● Manager’s travel risk –physical injury.

● By-law compliance risk –reputation/brand loss and fines

● Loss of brand recognition risk – brand non-compliance of staff not wearing the
MacVille uniform, or altering MacVille processes and service expectations.

Timelines to consider are based on risk priority levels and include the following:
● Pre-settlement – date of legal transfer of the business.

● Opening week – first week of company operations.

● Within three months – after the opening week.

● Within six months – after the opening week.

Responsibilities for actions include the following.


● Financial, insurance and banking issues – Financial Controller.

● Legal issues – Goldsmith Partners.

● Expenditure >$5,000 – MacVille Board of Directors.

● New policy – CEO with MacVille Board of Directors.

● On-site management, training – Store Manager.

● Changes to MacVille Café Queensland operations – CEO.

● External audits – CEO with MacVille Board of Directors.

Develop a report for the Board of Directors that examines these risks and describes ways
that each can be treated, and forward a copy of your report to the CEO to table at the next
Board meeting.

Appendix 2: Revised notes from previous meetings

Site visit – New Toowoomba store (the existing Hurley’s Café)


Meeting with James Mansfield
You revise your notes from the meeting with James Mansfield and identify the
following points.
● In the context of MacVille’s investment here, $4,000 would be considered to
be of minor consequence if it were burgled from the closed premises
overnight.
● One or two of the staff at Hurley’s pride themselves on being on-trend and
well-dressed; they are going to struggle with being required to wear a MacVille
uniform. It will be difficult to make them comply with the uniform requirement.
The rest of the staff are generally very responsive to employment
requirements. The consequence of initial non-compliance would be minor.

Meeting with Ron Langford


You revise your notes from the meeting with Ron Langford and identify the following points.

● He also said that the Toowoomba Council water patrols meant that it is likely
that stores not complying with the by-law would be discovered.

Senior management team meeting


You go back over your notes compiled with the senior management team and note
the following.

● Further feedback from Paula included that the water compliance risk was one
where significant time and resources would be required and the Board would
view it having moderate consequences for MacVille’s cafés in Queensland.
She also indicated that while the Board views the risk of a serious accident
unlikely, any potential risk that could result in the death of an employee would
have a catastrophic consequence.

Brainstorming ideas

Looking at the hierarchy of control, the senior management team were able to give you
some good brainstorming ideas to pursue. These include the following.

● Installing native plants to cut down water use.

● Making it a company policy to bank every day and eliminate the need to carry
overnight.
● Install a teleconferencing system.

● Install a water tank and reduce dependence on council water.

● Change banks to the nearer one to avoid the long walk.

● Install dual-flush toilets.

● Insure overnight cash holdings.

● Finish management meetings at 3.00pm.


● Introduce new processes on water use and conservation.

● Change assistant manager training times to the morning.

● Write new policy and procedures for water use in Toowoomba.

● Install a water-usage graph in the staff room.

● Give the manager an excusal letter allowing them to leave any meeting at no later than
3.00pm every day.
● Replace the dishwasher with one that has a 5–6 star (WELS) rating.

Task 3: Monitor Risk and Evaluate Processes


Assessment description

For the MacVille Pty Ltd simulated business scenario provided, you are required to assume
the role of Brisbane store Assistant Manager, Ash, who has just been promoted to be
Manager of a new store. Ash has been tasked with conducting a risk management analysis
of this new venture.

For this task, you are to review the implementation of the risk management action plan you
developed in Assessment Task 2 against the simulated business information provided in this
task. Then, you will need to prepare a monitoring report evaluating the outcomes of the
action plan and risk management process.

Procedure

1. Review the MacVille simulated business scenario information provided in the


Appendix of this task.
I have reviewed the MacVille business scenario as provided in the appendix.

2. Develop a report for the CEO (your assessor), which examines the ongoing
implementation of the risk management action plan.

My Plan includes:
Banking risk – theft of cash left on premises:
Could be made more effective by 100% compliance with the daily banking directive and
removal of expensive insurance on overnight cash on premises.
 Manager’s travel risk –physical injury:
 CEO should provide an excusal letter to ensure the manager leaves at the
appropriate time.

By-law compliance risk –reputation/brand loss and fines:


 More internal audits are required.

Loss of brand recognition risk – brand non-compliance of staff not wearing the
MacVille uniform, or altering MacVille processes and service expectations:

Implementation:

Banking risk – theft of cash left on premises:


 The financial controller had taken out $5,000 on insurance cover for cash held on the
premises overnight from the launch week as planned.
 The company bank account that was planned to be opened in the first week was
actually opened about four weeks after the café’s launch at the bank two doors down
the street.

Manager’s travel risk –physical injury:


● The teleconferencing system, planned for six months after launch, has not yet been
installed, due in part to the delay in the rollout of the federal government’s National
Broadband Network.
● The weekly management meetings are finishing close to 3.00pm as planned but
sometimes the manager has to stay on at the request of the head office team.
● The assistant manager training has been shifted to the mornings, allowing the
manager to leave before 1.00 pm as planned.
By-law compliance risk –reputation/brand loss and fines:
● The plants have been changed to natives that require minimal water as planned.

● The installation of dual-flush toilets were planned for completion six months after
settlement, and although the dual-flush toilets have been ordered and are in stock,
they cannot be installed due to the backlog of work by district plumbers.
● The five-star rated (WELS) dishwasher was installed by the supplier within the six-
month timetables planned.
● The application to ‘make good’ by Goldsmith Partners on behalf of MacVille was
accepted by the Toowoomba City Council.
● There has been one internal audit arranged by the store.

● There is a weekly water-usage monitor in the staff room.

Loss of brand recognition risk – brand non-compliance of staff not wearing the
MacVille uniform, or altering MacVille processes and service expectations:
● All the original staff members are wearing the MacVille uniform. However, these
original employees are now responsible for directly supervising new employees. The
original staff members are not explaining the uniform requirements to new employees
and are not delivering any warnings for uniform non-compliance.
● As a result, there has been an increase in uniform non-compliance.

Outcomes:
Banking risk – theft of cash left on premises – initially rated as Could be made more
effective by 100% compliance with the daily banking directive and removal of expensive
insurance on overnight cash on premises.

Now minor due to insignificant consequence (insurance cover) and ‘unlikely’ likelihood
because cash rarely kept on the premises.
 Manager’s travel risk – physical injury – initially rated as CEO should provide an
excusal letter to ensure the manager leaves at the appropriate time.
And now this will become low. The consequence is minimal now and the likelihood is
reduced to rare with the change in travel time.
By-law Compliance risk – reputation/brand loss and fines – initially rated as the plants
have been changed to natives that require minimal water as planned now minor due to
unlikely likelihood with the installed water saving devices and processes.
Loss of brand recognition risk – now high risk due to increased likelihood of new staff not
wearing the uniform and original staff not communicating the importance of upholding the
MacVille brand. The likelihood is ‘likely’ and the consequence is moderate due to new staff
who are not aware of the uniform policy.

Evaluation:

Banking risk – theft of cash left on premises:


 Could be made more effective by 100% compliance with the daily banking directive
and removal of expensive insurance on overnight cash on premises.

Manager’s travel risk – physical injury:


 Introduction of teleconferencing would reduce this risk to nil.
 CEO should provide an excusal letter to ensure the manager leaves at the
appropriate time.

By-law Compliance risk – reputation/brand loss and fines:


 By having Brisbane plumbers install the tank and the dual – flush toilets in the next
14 days this will make the risk low.
 More internal audits are required.

Risk of decreased brand recognition:

 Could be reduced by another presentation on brand importance to new staff and


training of original staff in upholding MacVille systems and procedures.

Risk Matrix
Consequence

Moderate
Minimal

Severe
Likelihood

Minor

Major
Almost certain

Likely Loss of brand


recognitions
risk

Possible

Unlikely Banking risk

Rare Managers
travel risk

Appendix: Scenario – MacVille Pty Ltd simulated


business

Implementation information
It has now been six months since you delivered your risk management action plan.

In accordance with the action plan, an external audit was completed and has been presented to the
MacVille Board. The audit investigated the status of the planned actions on the risks identified.

A summary of the findings


● The financial controller had taken out $5,000 on insurance cover for cash held on the premises
overnight from the launch week as planned.
● The company bank account that was planned to be opened in the first week was actually
opened about four weeks after the café’s launch at the bank two doors down the street. As it is
not MacVille’s regular bank, there are difficulties with getting the same level of service that
MacVille stores receive in Brisbane.
● The teleconferencing system, planned for six months after launch, has not yet been installed,
due in part to the delay in the rollout of the federal government’s National Broadband Network.
● The weekly management meetings are finishing close to 3.00pm as planned but sometimes the
manager has to stay on at the request of the head office team. The manager has not yet been
issued with an excusal letter by the CEO as agreed, and feels that they do not have the
authority to just walk out at 3.00pm.
● The assistant manager training has been shifted to the mornings, allowing the manager to
leave before 1.00 pm as planned.
● The Board of Directors and CEO included a new policy regarding compliance with the
Toowoomba by-law on water conservation as planned, but the specific procedure has not yet
been written. However, it appears that compliance is being achieved.
● The plants have been changed to natives that require minimal water as planned. The
installation of dual-flush toilets were planned for completion six months after settlement, and
although the dual-flush toilets have been ordered and are in stock, they cannot be installed due
to the backlog of work by district plumbers. The five-star rated (WELS) dishwasher was
installed by the supplier within the six-month timetableas planned.
● The application to ‘make good’ by Goldsmith Partners on behalf of MacVille was accepted by
the Toowoomba City Council; however, the grace period to comply with by-law ends in 14 days
and the store is still above the acceptable benchmark for water use.
● The training on daily banking appears to have been successfully completed as planned. An
audit of the bank deposit book shows that there is no banking entry for the day’s sales on only
two occasions in the past six months.
● There has been one internal audit arranged by the store and, as planned, there should have
been a call every two months. The store manager cites the distance that auditors have to travel
and their overloaded work with the Brisbane stores as the reason for this infrequency.
● Although the training on the water-saving processes, as directed by the policy, has been
verbally explained and followed, the written procedure has not been completed as the assistant
manager (James Mansfield) claims to be too busy.
● A water tank had been built in to the courtyard but the plumbing has not yet been connected.
There is a weekly water-usage monitor in the staff room as planned but the information has not
been updated for the past three weeks.
● All the original staff members are wearing the MacVille uniform. However, these original
employees are now responsible for directly supervising new employees. The original staff
members are not explaining the uniform requirements to new employees and are not delivering
any warnings for uniform non-compliance. As a result, there has been an increase in uniform
non-compliance.

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