BSBRSK501 Manage risk

ASSESSMENT - 1

Background
As part of their overall strategy in the Australian beverage market, MacVille Pty Ltd have developed a chain
of cafés in the Central Business District (CBD) of Brisbane, Queensland and the CBD of Sydney, NSW. The
Board of Directors has made the decision to expand their operations in Queensland with the purchase and re-
branding of the existing Hurley’s Café in Toowoomba, 130 km west of Brisbane.
Ash is currently the Assistant Manager of MacVille’s flagship café in Queen Street, Brisbane, and has been
given the opportunity to manage the new store in Toowoomba. Ash is also a member of the Finance, Audit
and Risk Management (FARM) Committee described in the MacVille Risk Management Policy.
The CEO for MacVille’s cafés in Queensland, Paula Kinski, has assigned Ash the task of managing the risks
involved with the operational aspects of this takeover. A copy of her email is provided below.

When implemented and maintained in accordance with this International Standard, the management of risk
enables an organization to, for example: Increase the likelihood of achieving objectives;
 Encourage proactive management
 Be aware of the need to identify and treat risk throughout the organization
 Improve the identification of opportunities and threats
 Comply with relevant legal and regulatory requirements and international norms
 Improve mandatory and voluntary reporting
 Improve governance
 Improve stakeholder confidence and trust
 Establish a reliable basis for decision making and planning
 Improve controls
 Effectively allocate and use resources for risk treatment
 Improve operational effectiveness and efficiency

Identify and describe the scope of risk management required in the role
The international standard provides principles and generic guidelines on risk management. This international
standard can use by any public, private or community enterprise, association, group or individual. Therefore,
this international standard is not specific to any industry or sector.
This international standard can be applied to any type of risk, whatever its nature, whether having positive or
negative consequences.
Identify and describe the critical success factor, goals or objectives for areas includes in the scope
Terms and definitions
Establishing the context
The location of the store on the corner of the two main streets of the city makes for easy access for local
customers and high visibility for tourist.
• The weekly takes up the entire day
• Meeting training schedules for managers
• Dangerous journey for drive to deliver food
• Fresh pastry deliveries after the morning demand
• Supplies of the company –branded supplies delivered asap
• No control of orders
• No written manual
• Manager no in store all the time
• Wastage of resources of water and electricity
• Cost of upgrading dishwasher 6000, dual flush system 7500
• Retirees as main patron
• Poor security and finance control
• WHS issues on carpet, training and chairs
• Specialty product developed locally
• New computer security limited
Expansion of physical space for patrons
Lack of internal controls, particularly over cash handling, monitoring and recording
Defining the external and internal parameters to be taken into account when managing risk, and setting the
scope and risk criteria
External context
External environment in which the organizations seeks to achieve its objectives
Note 1 to entry: External context can include:
• The retirees are setting in the area
• More legal regulations to save water
• More competitors are eying the area for business
• The cultural, social, political, legal, regularity, financial, technological, economic, natural and
competitive environment, whether international, national, regional or local.
• Key drivers and trends having impact on the objectives of the organization, and relationships with
and perceptions and values of external stakeholders.
Internal context
Internal environment in which the organization seeks to achieve its objectives
Note 1 to entry: internal context can include:
 Not clear role in the management of the store
 Family members working for the organization and thus different working culture from the
organization
 No policies and guidelines and procedures for running the place properly
 The distance from support base in BNE is too far and dangerous roads to travel
 No computer systems to records sales, training data and salary
  No relationship due new acquisition and store has their own value system

Limited consultation as only 2 meeting were held

Communication and consultation
Continual and iterative processes that an organization conducts to provide, share or obtain information and
to engage in dialogue with stakeholders
Only 2
Note 1 to entry:
The information can relate to the existence, nature, form, likelihood, significance, evaluation, acceptability
and treatment of the management of risk
Note 2 to entry:
Consultation is a two-way process of informed communication between an organization and its stakeholders
on an issue prior to making a decision or determining a direction on that issue.
Consultation is:
 A process which impacts on a decision through influence rather than power and
 Input to decision making not joint decision making

Owners have sent a representative to change their new store person or organization that can effect, be
affected by, or perceive themselves to be affected by a decision or activity
Note 1 to entry: A decision maker can be a stakeholder.

Risk assessment
Lack of internal controls, particularly over cash handling monitoring and recording.
1. Failure to meet compliance standards in WHS, privacy and industrial relations law.
2. Lack of written policy and procedures to guide staff in carrying out their duties.
3. Lack a professional business culture in the family run business.
4. Failure of the business to monitor the external environment and find opportunities and threats to the
business

Overall process of risk identification, risk analysis and risk evaluation, relevant legislation, regulations
and standards

Risk analysis
Strength
Strong financial backing with good infrastructure of the parent company, winning product developed
locally
Weakness lack of internal controls, particular over cash handling, monitoring and recording
 Failure to meet compliance standards in WHS privacy and industrial relations law.
 Lack of written policy and procedures to guide staff in carrying out their duties
 Poorly trained manager who will be away
 Opportunity
 General area needs more cafes to be established
 Threats
 Other competitors coming into the area to set up business, whis issues, drivers accidents

Risk evaluation
Risk identification
Lack of internal controls, particular over cash handling, monitoring and recording.
 Failure to meet compliance standards in WHS, privacy and industrial relations law
  Lack of written policy and procedures to guide staff in carrying out their duties

Process of finding, recognizing and describing risks

Note 1 to entry: Risk identification involves the identification of risk sources, events, their causes
and their potential consequences

Note 2 to entry: Risk identification can involve historical data, theoretical analysis, informed and
expert opinions, and stakeholder’s needs.

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

Risk source
Poor management of the branch-internal more competition to the area-town council, new regulations
of usage of water-town council.

Event
1. Chances of pilferage by family members
2. More competition to the area
3. Road accident due to the distance to travel and road conditions
4. Freshness of equipment

5. Poor utilization of equipment

Consequence
1. Lots of income
2. Lower profit margin and customer sale
3. Compensation of driver and no supply of fresh produce or stock
4. Poor quality of food given ti customers
5. Additional wastage or increase cost
6. Pest Analysis
7. Political the town council encourages development and more business to be inaugurated in
the location more regulations to be incorporated in the business scenario
8. Economic-more money expected to be grown the area
9. Social more retires expected to retire in the area and technological retires great possible of
improving through upgrade of water usage through dishwasher, toilet, cleaning

Stakeholder analysis:
 Stakeholders are those interested groups who are highly affected by the actions and result of the
corporation, this relation are not a restricted to onside rather only, rather this relation are two ways relations,
shareholder are also in position to influence the performance of company. After reviewing the case of given
company, can state that a said company had effectively manage the relations between the difference
stakeholder’s groups and had satisfactory developed a channel for effective communication and construction
of prospective relations. The said corporation had developed a system for effective communication,
continues training and stakeholders risk management tools

Appendix 3: Table of stakeholder’s template

Stakeholder Internal/external Role in process Stake in process

P. Kinsi Internal Director-Director Final
responsibilities

James Mansfield Internal Supervisor- Daily operations

feedback

Ron Langford Internal/External Landlord/town Rental of property

council

Ash, Assist Internal Operational Daily operations

Manager manager

The legal firm External Partners Daily operations

Goldsmith

SWOT and Pest Analysis

Swot

Strengths Weaknesses

 The financial background of Macville  The management of the Macville Pty Ltd
Pty Ltd is strong operations is poor
 It produces great revenue and gains.  they are unable to maintain the margins
 Therefore, it will help to develop the of the company
infrastructure of the company  It will also be difficult for the concern to
 It makes good financial report and manage the confront and challenges from
documents the foreign companies in the future
 The quality of the audit document is also generations
fair and upright. It maintains and controls
 the movement of cash flow in the  They cannot produce proper product of
company chocolates in the concern. Hence, the
 manages the environment and work number of customers is decreasing day
culture of the organisations in an accurate by day
manner  Another important fact is that if the
 The distribution network of the company company wants to increase the product
is also good and upright line, then, the production of chocolate
 The services of the company are very fair product has to be developed
in the rural and urban sides of the
concern
 The management of the supply chain are
strong. It provides good quality of food
to the consumers.

Opportunities Threats

 The company can increase its export and  Certain competitions are increasing day
import to gain the financial objectives of by day
the concern  Many new markets are entering in the
 It has a opportunity to increase its industry and it is affecting the revenue of
product line through the product of the concern
chocolate  In the market, many new technologies
 As new technology is entering into the have entered. Therefore, it will affect the
market nature of investment and financial gains
 It has a chance to develop the technology of Macville Pty Ltd
of the company

Pest
Political Economic

 Australia is regarded as the safest place  This factor tends to describe the
for investment economic condition that prevails in
 This is mainly because of stable, open Australia
and progressive political environment
which is helping the investors to invest in  The economy of Australia is regarded as
the growing markets of Australia one of the largest capitalist economy in
 This is certainly helping the investors to the world which is helping the companies
invest with a high degree of confidence to do well in the region of Australia
 The political system has helped to reduce  This economy of Australia is largely
the challenges of economic problems dominated by the service sector that
with a good policy decision. tends to provide good services to the
people
 Economic condition is being determined
by the mining and agricultural sector.
This is helping Australia who is ranked
as 10th in the easing business conditions

Social Technological
  This factor tends to derive the social Australia has good support from the research and
conditions which will help the companies development wing that brings advancement in
to operate in a free environment. the technological factors of Australia.
 Australia has a good collection of
diversified people who speak various Commonwealth Scientific and Industrial
languages. However, English is regarded Research Organization support all the physical
as the most widely used language which and biological technologies for bringing
is spoken by Australian people innovation in this sector. However, few issues
 Australia does not have any official are there which tries to dominate the
language which will be spoken all over technological department of Australia.
the regions of Australia
 Education is aloes being enhanced in
Australia with good colleges coming up.

Identify the list of risks to the project.

 Operational/organisational: Risk Identification List
As per meeting conducted, three main criteria’s are being considered as a major concern over the course
of acquisition of Hurley’s Café in Toowoomba by ranking from its severity to the moderate one, are as
followed;

Financial:

Governance:

Project management: Assessing of risk of MacVille’s Toowoomba branch

Risk Risk Description

Id.

1 Manager’s travel risk

this risk presence according to the geographic setting of Toowoomba branch in which it is
locate in regional area reached by winding road. Risk presence are mainly the danger from
traveling between headquarter in Brisbane and Toowoomba branch for weekly meeting which
are typically finish late in the evening or night.

2 By-law compliance risk

This risk arise due to the recent reformation of local council legislation in term of exceed water
usage. The risk presences moderate threats to the continuity of the business due to the fee
imposed by local council if the water usage had been exceed.

3 Banking risk
This risk arise form the lack of controlling and monitoring procedure of the store financial
records and their method of keeping cash with in the store after hour. The lack of rules and
regulations as well as procedures in term of depositing cash daily, the record keeping of sale
and cash paid out, and detection and prevention control in term of fraudulence

Email from Assistant Manager

Email: example@hotmail.com

From: Assistant Manager

To: Stakeholders
Re: New Toowoomba store
Dear:
Follow the email you can find the MacVille report about risk management this documentation is an
essential component of good management practice and is committed to the proactive management of risk
across the organisation. The strategy is designed to identify, evaluate, control and manage risk ensure
potential threats and opportunities.

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.
I would like to discuss about this in a meeting.

Regards
Assistant Manager