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Scope

Question 1

Part A 

Scope

The main scope of risk manager is to work with companies for assessing as well as identifying the potential risk that may hinder safety, reputation, security and financial prosperity to the business enterprise (Harrison & John, 2013). In this case, the risk manager will be assessing the potential risk of MacVille cafes that have developed chain of cafes in different places. To this, Hurley Café is an existing café shop where risk manager need to predict the risk associated and then plan for opening a new store at Toowoonda.  It is the responsibility of the risk manager or assessor to make sure that client is fully prepared to deal with any of the potential threats. The client here is MacVille cafes that need assistance from the risk manager on what are the risk associated with existing café (Hurley) and new opened café store (Toowoonda).

  • Factor 1: Commitment and support from top management- It is important to consider the factor that communication as well as support from the top management plays major role in the risk management procedures (Sroufe, 2013).
  • Factor 2: Communication- Communication is a vital factor where risk can be managed through transparent communication between lower level manager and upper level Executives.
  • Factor3: Culture- Culture can be termed as essential factor that directly links with the risk management process.
  • Factor 4: Organizational structure- Organization structure directly affects the working of any business enterprise and any problem will deal with management of risk.
  • Factor 5: Training- Training is important where employees can be continuously evaluated and trained with any innovative techniques introduced.
  • Factor 6: Information Technology- Information Technology is one of the major factors that are used at the time of risk management procedures.
  • Factor7: Trust- Trust is one of the major factors that are used at the time of risk management procedures (Nadiri & Gunay, 2013).

Stakeholder

Internal/external

Role in process

Stake in process

Customers

External

Customer’s plays a role in expansion of business as they help in providing relevant information associated with establishment of café.

Customers have higher stake within organization as they determines business success.

Suppliers

External

They have a role in improving operational effectiveness of organization.

Suppliers have less stake as compared to customers.

Investors

External

Investors are able to provide funding that is required for opening of new stores and providing with necessary funding for rebranding.

Investors has high level of stake in organization.

Employees

Internal

Employees would support organization in achieving organizational goals and objectives. They would help in building awareness about expansion of business and re branding of Hurley’s brand.

Employees are responsible for handling the procedures of meeting all the business as requirements (Van et al., 2015).

PEST Analysis 

Political factors- From the case study on MacVille cafes, several political factors are recognized as these café chains had decided to open a new café store at Toowoonda and expanding Hurley café. The risk will be associated as there are trade restrictions and tariffs charges in Australia. There are excessive environmental regulations, tax law, employment law that prevails at the time of opening a new café store at Toowoonda (Hang, 2013).

Economic factors- From the case study on MacVille cafes, several economic factors are recognized as these café chains had decided to open a new café store at Toowoonda and expanding Hurley café (Hou, 2013). Economical factors such as inflation rate, exchange rates, taxation and interest rates influences external environment at Toowoonda in Australia.

Social factors- From the case study on MacVille cafes, several social factors are recognized as these café chains had decided to open a new café store at Toowoonda and expanding Hurley café. Social factors include health, safety, and rate of population growth as well as division of wealth in society that influences external environment at Toowoonda in Australia.

Technological factors- From the case study on MacVille cafes, several technological factors are recognized as these café chains had decided to open a new café store at Toowoonda and expanding Hurley café.  Technological factor include automation, rate of technological change as well as innovation and current technological development that influences external environment at Toowoonda in Australia (Wu et al., 2013).

Stakeholders

Strengths

Weakness

Loyal clients

Market leader or large market share

Knowledgeable staff members

Strong brand reputation

Talented and experienced top management

Hiring right candidate for right position

Low bench strength

Reliant upon single staff member

Negative publicity because of failures

Low recognition in the current marketplace

Opportunities

Threats

Understanding the need of customers

Under-served markets

Termination of competitors product line

Increased competition

New regulations introduced because of non-compliance

Research 

On researching the business plan on MacVille cafes, it is understood that the café chain aims at serving competitively-priced as well as high quality coffee and gourmet food in a safe and comfortable café-style environment. It is important for the risk manager to identify potential risk that arises from existing café and opening a new café store (Hisrich & Ramadani, 2017)

Describe 

Category- Customer Risk

Source of risk

Ideas for risk reduction

Meeting customer expectations

Using customer mapping techniques for organizing ways to know  about the customer organization

Obtaining samples of previous work that need to be taken into consideration as a benchmark for meeting the level of expectations

Meeting regularly with the acceptor

Holding regular Steering Committee meetings

Managing Senior Management perceptions

Active involvement of Steering Committee

Customer management

Political risk

Accessing organizational readiness where the Senior Management are committed that ensure that it need to get appropriate priority

Changing requirements

Defining the scope in terms of horizontal scope, vertical scope as well as other estimating assumptions and the acceptance criteria

Lack of user commitment

Ensuring user awareness for resolving all issues through use of reports

Obtaining executive commitment that aims at providing adequate user participation

User training and acceptance

Developing a training programs

Installing a training infrastructure

After assessing the above listed steps, it is now required to meet with the mangers and discuss the critical success factors. The findings that should be communicated to the manager will be risk assessment strategies that need to be adopted by MacVille cafes so that they can attain the future goals and objectives of business enterprise (Grugulis & Haynes, 2014).

Risk management process for communicating with stakeholders:

Meeting with managers revealed fact that there were several opportunities for opening more cafes. Opening of business in areas such as Wilston and K-mart plaza are backed by support of government by formulation of legislation that are concerned with efficient usage of water (Peppers & Rogers, 2016). Prerequisites of opening café is also discussed with managers that provided information about requirements of opening café shop. It was also mentioned that many international chain of coffee shops are enquiring for opening such store in the area.

After discussion with risk managers, it was ascertained that the existing Hurley’s coffee outlet face some issues and there was apprehension that similar issues would be faced in new brand to be established at Toowoomba. Some of risks that would pose threat to opening of store at Toowoomba that there were lack of written policies that would guide staffs for carrying out their duties, lack of professional culture of business, incapability of meeting compliance standards and failure to monitor external environment. It has been recommended that it is essential for mangers to manage risks by development if appropriate risk plan that would help in mitigating any evolving and related issues. A proactive management is required to control, evaluate and managing risks at all organizational level (Carvalho et al., 2014).

All the relevant stakeholders of MacVille would be communicated through online newsletter, websites, brochures and advertising. Communication plan of stakeholders would outline various aspects of opening coffee stores in Toowoomba and rebranding of Hurley’s stores. This would involve prioritizing and designing key stakeholders. Particular group of stakeholders would involve employers, customers, suppliers and investors. Business would employ a proper mechanism for communicating with their relevant stakeholders. Some stakeholders are required to be communicated using phone calls or fax for discussing the matters and risks related with opening of coffee store. Investors would be communicated by organizing meeting with senior management teams and directors. Customers would be communicated by distributing pamphlets and brochures and they would be informed about rebranding of Hurley store and expansion of store at Toowoomba. Communication draft prepared for investors and suppliers would invite them to provide discussion on identification of risks related with opening of store. Effective communication approached would be adopted by organization that would assist in understating proposed business (Baron & Frattaroli, 2016).

Question 1:Establishing the contexts:

Research

Risk management framework would be developed for rebranding Hurley’s café along with new store to be opened at Toowoomba. Operating environment in Toowoomba is risky and therefore, there has been development of policies that are designed to evaluate, identify, control and monitor risks. It would help in properly assigning roles to staff members, senior management and directors concerning risk management. Management of MacVille would be able to determine what types of risks should be accepted and preparing accordingly (Yuan et al., 2014). In regard to conduct, standards would be set for meeting expectations of customers and staffs.

Risks faced by MacVille business can be identified by adopting collaborative approach involving stakeholders’ cross section. Business expansion would also considered scenario that are worse. Identification of risks would help business to assess the likelihood and consequences arising from such risks and arriving at options for managing such uncertain risks.

Number of elements are encompassed in the structure of risk management of MacVille that would enable them to respond to commercial, financial, operational and strategic risks. Internal control procedures would be underpinned by series of policies that are implemented and communicated to all staff members by senior management team. Policies for managing risks would be developed for different departments (Borrella et al. 2015). Such policies involve financial policies, human resources policies and corporate governance policies.

Evaluation of risks are done by adopting three types of process. Managers would prepare what if questions, perform brainstorming and analyse the worst case scenarios. It has been analysed from the case study that opening store at Toowoomba would face accessibility issues, as mangers would require long time to travel from Brisbane to Toowoomba. In this context, location would act as hurdle in opening coffee shop at Toowoomba. In the worst scenario, it is possible that location would be financially unsustainable. Furthermore, there can be creation of ineffective layout of customer flow. Improper layout of customer flow would arise when business does not take into account different aspects of customers and this would hamper their experience with business. The ability of coffee shop to reach and provide satisfaction to customer would be hampered (Anwar et al., 2014). Risk management profile of MacVille would also addressed some other uncertainties such as overcapitalizing preparation of food, inefficient workstation building and carrying out inappropriate agreement for financial requirements.

Evaluation of risk includes identification, assessment as well as prioritizing important risks of business. This in turn helps in validation as well as prioritization of significant risks to monitor and highlight any kind of opportunity for enhancement to present actions utilized as controls in the business (McNeil et al., 2015). Assessment of risk helps in gaining a deep insight regarding important inherent risk from a perspective of practice and links these to the objective of the corporation Mac Ville. The identified risks can be assessed using the following:-

Describe

-likelihood

-consequence (Glendon et al., 2016)

-rating of risk and

-evaluation of control

Thus, the first step involves assessment of inherent possibility, assessment of inherent consequences and determination of the entire inherent risk ranking (Lam, 2014). Following step also involves identification and analysis of controls and evaluation of residual risks. Therefore, risk manager can undertake the following steps:

Evaluate different inherent risks

Identify and analyze controls

Evaluate the residual risks (Hopkin, 2017). 

Evaluation of business risk of Mac Ville essentially involves critical assessment of the business. This necessarily comprises of understanding critical business actions undertaken by the corporation, counting important services, key resources along with staff as well as things that can have an effect on business activities, such as failure of power, natural disaster as well as illness (Bromiley et al., 2015). Assessment of risks that is likely to happen in the business, identification of both internal as well as external risks and identification of individuals who might possibly get affected in case of recognition of the risks. Process implemented for conduction of analysis of risk include undertaking a process of asking “what if” questions, undertaking brainstorming, analysis of other events, assessment of other processes and taking into account the worst case scenario (Cagliano et al., 2015).

Analysis of operations of the firm Mac Ville is carried out from the standpoint of a member of the finance, audit and risk management (FARM) and assistant manager of flagship store of Mac Ville in Queensland. in this case, the task of risk management also involves evaluation of the business function of expansion of function in Toowoomba. Detailed analysis using asking “what if” questions can help in understanding that location of the café in Toowoomba can pose the risk of accessibility. Particularly, attending meeting on a weekly basis by managers and travelling from Toowoomba Brisbane can be considered to be a very difficult task (Pritchard & PMP, 2014). Again, acquiring company branded supplies is also a difficult aspect in Toowoomba as compared to Brisbane.  In addition to this, risks are also involved in the process of authorization of wages along with endorsement of deliveries. Thorough brain storming can also help in understanding and setting policies, detecting risks and averting the risks for written directives over and above procedure and manuals (Hopkin, 2017). Again, computerized processes of maintaining details of employee and improper security of financial records maintained in computers might also pose risk. In addition to this, unavailability of safe in the store might pose risk to the business as it might not be possible to do banking on every day basis. Furthermore, fit out parts looked well and at the same time unappealing and can hamper the business of the firm (Sadgrove, 2016).

Analysis of the risk of operations can also help in detecting the business risks that might be involved in the business operations. Detailed analysis reveals the fact that important problems that can be recognized in the business operations include inadequacy of internal controls, specifically over handling of cash, monitoring as well as recording (Eckles, et al., 2014). In addition to this, failure to adhere to compliance standards such as WHS, Privacy along with laws of industrial relations can help pose risk to business operations. Again, inadequacy in written policy as well as procedures to guide members of the staff in carrying out the duties also hampers business and bears risk. Furthermore, inadequacy of professional culture in the family runs business along with malfunction of the entire business to scrutinize the external environment and come across opportunities along with threats to the business (Glendon et al., 2016). Risk manager can reduce risk by treating the risk properly. Risk manager can lessen risk by dropping the possibility of negative incidents or increasing the possibility of opportunities for the business. An IT solution corporation can be hired for maintaining privacy of financial data of the company. In addition to this, plans can be developed for emergency situations. Risk manager might consider development of an exclusive product design, protection of intellectual property in order to enhance expected gains. Moreover, it is also important to recurrently verify risks, update plans and regularly check different risks (Pritchard & PMP, 2014).

Thus, the risk treatment plan involves

specification of treatment options selected

Documentation of treatment plan

Assignment of owner

arrangement of target resolution date

Risk manager might consider assessment of risks detected in the risk register of the firm. The risk management team can document different activities or else events that can change the overall status of risk. Therefore, risk manager can change to a specific risk assessment owing to the enhancements in controls. In addition to this, violation in the control as well as near miss also needs to be logged during the time of the incident. Again, a new risk can also be acknowledged. Therefore, partners need to assess risk register on a regular basis that includes meeting of partners on a monthly basis and determine any kind of remedial activities that can be undertaken on an immediate basis (Hopkin, 2017). Subsequently, efficiency of framework of management of risk can help in implementation of the same in the company Mac Ville. This needs to be periodically assessed to make certain continuous enhancement of risk management in the corporation. Again, this can be analyzed based on the violations as well as near misses, efficiency of communication, assessment of different lessons that can be learnt and remedial activities can be undertaken. In addition to this, structure is also said to be efficient in case if the context remains pertinent to the business of the firm Mac Ville, since this sets the range for management of risk. Furthermore, the framework is also effectual and this makes certain establishment of practice objectives, internal as well as external context for management of risk in the business of existing operations with expansion business (Eckles et al., 2014).

Risk Analysis 

Likelihood 

The likelihood of the risk can be judged depending upon the degree of risk pertaining to that risk and how far it can be controlled at the same time (Sadgrove, 2016). In case of banking risk, the risk assessed is high for the Hurley café as the company was facing problem on matters relating to inadequate internal controls as well as difficulty in handling cash and recording the cash as and when required. In order to carry out any new business, there are many risks that the business needs to suffer. Here comes the role of risk managers who identify the risk, assess it and suggest control measures so that risk can be minimized as far as possible. The next risk identified from the case study is traveling risk of managers (Brindley, 2017). It becomes difficult for the managers to travel from Brisbane to Toowoonda for business purpose. It is a very serious problem that will pose a threat of opening a new store at Toowoonda. Location was a major concern for the business as Toowoonda is risky place. The third risk evaluated from the case study is compliance risk where the business failed to adhere by compliance standards like WHS, privacy along with laws of industrial relations and procedures that are used for guiding staff members at the time of carrying out duties that hampers business and poses risk (Moffett, Stonehill & Eiteman, 2017).

The business risk had occurred as the business could not mange with the available cash and internal related activities. The other risk was traveling risk of mangers that had taken place as it is of utmost importance for any manager to travel at other offices as well to look after the working. The place Toowoonda was also a major drawback as it is risky and lack development expansion. The business was not adhering by the rules, norms and regulation that give risk to compliance risk (McNeil, Frey & Embrechts, 2015).

Each risk identified from the case study need to be prioritized as to which risk to be mitigated first and then the next one to be precise. The vital risk that need urgent attention if banking risk, then the travelling risk of managers and lastly compliance risk factor

Proper risk management will be likely effective option that should be adopted by the business to mitigate inventory and working capital problems (Bromiley et al., 2015). It is of great important for any business to have adequate working capital requirements to meet day-to-day expenses of business for smooth functioning of business enterprise. In order to the mitigate the second risk, it is important to hire experienced and talented manager for the new store Toowoonda as that manager will look after the operations and will be staying there only and hence this option will be likely effective for given span of time. The last risk identified is the compliance that can be mitigate by the risk managers by adhering by the laws, rules, norms and regulations (Lam, 2014).

Risk

Assess risk

Controls

Monitoring

Timelines

Responsible

Banking risk

High

Inadequacy of internal controls

Over handling of cash monitoring as well as recording

Proper risk management as well as internal control of Hurley café will help in understanding the risk that are exposed and lead to meeting further objectives.

2 to 3 years  

Risk manager or assessor

Travelling risk of managers

Medium

Time consuming affair

Expensive

Location being one of the drawback for this café, it need rethinking of any other location or recruiting managers who can manage the new café at Toowoomba

2 to 3 years  

Risk manager

Compliance risk of the company

High

Financial stability

Documentation

Concentration

Legal or regulatory

Continuous monitoring is needed by the risk mangers to look at the stability of existing café at Toowoomba

2 to 3 years  

Risk manager

The main purpose of risk management plan is to highlight the risks that are present at Hurley’s café and developing strategies to mitigate or avoid such issues that are outlined in the table (Hopkin, 2017).

Probability impact matrix

Project objective

Very low

Low

Moderate

High

Very high

Cost

Increase in cost insignificantly

Less than 10% cost increase

10 to 20% increase in cost

20 to 40% of cost increase

More than 40% cost increase

Time

Increase in time insignificantly

Less than 5% increase in time

5 to 10% of time increase

10 to 20% of time increase

Less than 20% time increase

Scope

Negligible decrease in the scope  

Minor areas of scope that affects

Minor areas of scope that affects

Reduction in scope that is unacceptable by the sponsor

Project end item that is effectively useless

Quality

Barely noticeable quality issues

Vary depending upon requirements

Quality reduction that need approval from the sponsor

Quality reduction unacceptable by the sponsor

Project end item that is effectively useless

Risk register 

It is the responsibility of project manager and project team to come up with numerous options for each of the identified risk that was associated to Hurley’s café (Green, 2013).

It is difficult to open café as the businesses need to offer fresh ingredients, dishes, mocktails and coffee to their clients. At Hurley’s café, it is essential that the staff members are given required training on how to behave with customers, enhancing the quality of food and other essential factor. Equipment at Hurley’s café should be properly maintained as well as training sessions for the staff members plays major role that help in mitigating the risk as far as possible (Gollenia, 2016). The most vital part for Hurley’s café is to meet customer expectations. The present case study emphasis on two main factors, rebranding Hurley’s café and opening stores at Toowoonda

Some of the risk management strategies are suggested to mitigate the issues that are faced by Hurley’s café. The risk is already mentioned above in the table that includes business risk, travelling risk of managers and compliance risk. These are some of the risk that need proper evaluation by the risk manager and come with strategies that can help the café attain more profits, success, and growth in the upcoming financial years.

The first risk management strategy is to train the staff members as they are the real assets for any business enterprise (Carroll & Buchholtz, 2014). Training staff members can help in mitigating potentially disastrous situations where the staff members can handle it all by themselves. Training includes equipment handling, safety procedures, safety procedures as well as customer service. Here, equipment handling means staff members working at café should know how to handle the equipment in the required way. Rather than saying not to use equipment in certain way, it is suggested to explain the staff members about the reason for the rule or rationale behind a rule that boosts compliance. The next training that is needed for the staff members at café is explaining the safety procedures like how to handle equipment, preparation of food items as well as what to do when there is any case of robbery or fire. The next training session should be regarding customer service. Staff members who are coming in direct contact with the customers at café should be well-behaved and has smile on their face while serving them (Fadun, 2013).

The second risk management strategy that should be used by Hurley’s café is use of technology. Running a business in the digital age in real comes up with own set of risks. In order to prevent the security, the café should consider using anti-virus software that will keep malware and viruses with necessary firewalls and software. In addition, they should consider using password protection for their Wi-Fi network that offer the café as an internet hotspot that is good way to attract customers and keep their network safe as well. They should use secured networks as well as give passwords at the register. Use of security cameras will solve a lot of problems such as any potential criminal activity or theft at café (Choi, Chan & Yue, 2017).

Question 1

Critical Review of Implementation of risk management plan

Part A 

Summary of the initial risk and the plan implemented to manage it

Based on the report on identified risks, the board of the firm has detected several risks in addition to different options for lessening the levels of risk. Mac Ville primarily faces the banking risk stemming from risk of theft of cash from the store premises, travelling risk of manager cropping from possibility of physical injury. Moreover, there is probability of by-law conformity risk that might damage the reputation and brand equity and lead to payment of fine. The management of the firm intends to maintain a timeline for taking into consideration the level of risk priority (Chan & Wong, 2015). The board of the corporation as part of risk management plan can identify, evaluate and plan to mitigate risks throughout the life cycle of the projects of Mac Ville. The board of the firm has undertaken a plan of delegating different duties to different members of the company for breakdown of work structure. For example, financial controller for overseeing financial, insurance as well as banking issues, Mac Ville Board to control the expenditure, store manager for management of operation on site, Goldsmith Partners for handling legal concerns, CEO for external audit and alterations to operations of Queensland.

In addition this, the company also intends to aptly introduced certain measures for addressing the risks faced by the concern. The management intends to change the banks and select the ones located nearer to the café to avert long walks and avoid banking risks. The identified problem related to usage of water in the Toowoomba location is also expected to be solved by the plan of installing various native plants to reduce water use, implementing a water tank, introducing new procedures on usage of water and conservation of water, establishing new policies as well as procedures for usage of water in Toowoomba, installing water graph, replacing dishwasher. Moreover, the risk management plan sketched out also includes installation of teleconferencing system, completion of management meet by 3 o’clock in the afternoon and shift the assistant management times to the morning that can help in lessening the travel risk of managers of the company. Again, the action plan for management of risk of the firm also include bringing in Goldsmith partners for good and monitoring the legal and compliance issues of the firm that can help in elimination of the legal issues.

Part B

Actions that are undertaken till date to manage the identified risks include adoption of specific work processes for identification, analysis as well as analysis of risks throughout project and development of budget for monitoring the costing of the project. The company has also maintained risk register for critically reviewing the risk attached to operations frequently. In addition to this, the management also delegates roles as well as accountabilities to different members so that at the time when different projects faces an issue with specific risks attached to it, this plan can allow the members of the project know people in-charge of specific responsibilities. In addition to this, the company also categorized risks and slated correct organization of requisite information. Specifically, the company has taken insurance cover worth $5000 for mitigating the banking risk and risk of theft of cash from store premises. A bank located only two shops in the down street and was selected for banking and for averting long walk to banks. Teleconferencing system was also installed and weekly management meetings are also getting by the management of the firm. In addition to this, weekly management meetings are also finishing by 3 o’clock as part of ease of the business process. Furthermore, the board as well as CEO of the firm also included new policy as regards compliance with the by-law of the Towoomba on conservation of water as designed. Again, the plants have also been altered to natives that require minimal water as intended. Furthermore, installation of dual-flash toilets is also ordered and is in stock owing to the backlog of work by different district plumbers. In addition to this, 5 star rated dish washer is also installed by the supplier within 6 months planned time schedule. The implementation to make good is also carried out by the Goldsmith Partners for Mac Ville and this was accepted by the Toowoomba City Council. Nevertheless, the training on regular banking also appears to have successfully concluded as designed. Again, audit of various deposits of bank of the last 6 months is also carried out properly for management of risk. In addition to this, internal audit is also undertaken by the store as designed for monitoring the operations of the firm. Moreover, training is also conducted on different water saving procedures as is directed by the policy (Calomiris & Carlson, 2016). Again, water tank is also built in particularly the courtyard; however, the plumbing has not yet been joined.

Part C 

Comparison with of the outcomes of the risk management plan can help in identifying with the reduced risks.

Insurance cover that involves a premium payment of $2500 is used by the company for addressing the risk of banking and theft of cash withheld by the firm. This refers to the fact that the banking risk gets lessened due to this specific action by the management. In addition to this, the bank account of the firm is also maintained at a bank located nearby the outlet of Mac Ville. However, the company faces problem in receiving the same level of service that the outlets receive in Brisbane and encounters banking risks even after implementation of the measure for risk management. In addition to this, non–execution of the teleconferencing system also encounters also leads to risks of management of operations of business in the Toowoomba. Furthermore, plants that have been transformed to national ones call for the need of minimal water as intended by the firm (Rampini & Viswanathan, 2016). The company also faces difficulty in the process of installation of dual flush toilets owing backlog of work by different district plumbers. Thus, this leads to the problem of water usage. Again, verbal illustration of the guidelines on training on water saving procedures also adversely affects the effectiveness of the training program and hampers the entire process. Water tank developed in the courtyard is not linked and the and there remains a gap in the business functionalities that hampers the business functions and increase the risk of functional failure.

Part D 

Critical evaluation of the effectiveness of the risk management plan can be carried out by appropriately comparing the process of implementation with the outcomes of the risk management plan of Mac Ville. Analysis of the outcomes of the risk management plan reveals the fact that the reveals the fact that action plan of using insurance cover involves insurance premium payment of $2500 every year. Again, the bank account opened in a nearer location two shops down the street is faced with difficulty as the company could not receive the same level of service as it could get from the Brisbane outlet. Again, the management of the company has also failed to install the teleconferencing system even after six months of planning. Furthermore, weekly management meetings although get completed by 3 pm, sometimes the manager also need to stretch at the demand of the team in the head office. Moreover, the manager has also not yet received any kind of excusal letter by particularly the CEO and feels that they do not have the ability to just leave at 3 pm. Again, the board as well as the CEO also incorporated new policy as regards compliance with the Toowoomba as per plan but the particular procedure has still not been written. In addition to this, the plants have also been altered to natives that call for minimal water as per plan. Installation of dual flush toilets was designed after settlement and although the dual flash toilets are ordered they are not yet installed owing to backlog of work by different district planners. Internal audit conducted by the firm is also faced with difficulty (Soin & Collier, 2013). Essentially the store manager states that that travel managers need to travel a particular distance and there is overload of work of the managers in the Brisbane stores. This can also be cited as a reason for the infrequency of internal audit of operations of the corporation. In addition to this, written policies on training on water saving procedures is not yet carried out although it is verbally explained as a part of the action plan of risk management. Analysis of the risk management plan reflects that a water tank had been developed; however, plumbing has not yet been linked. Although the weekly monitoring of the water usage is carried out, information is not updated for the last few weeks.

Evaluation of Risk Management Plan

This current segment presents an Analytical evaluation of risk management plan of the corporation Mac Ville. The analysis of the plan can help in understanding the extent of effectiveness of the actions undertaken by the corporation for addressing the identified risks (Lam, 2014). Detailed comparison of the outcomes of the plan talks about the success of the implemented actions. Proper monitoring as well as review procedures that encompass diverse aspects of risk management procedure helps in ensuring that the controls undertaken by Mac Ville are effective as well as efficient in terms of both design as well as operation. Acquirement of further information on plan of action aids in assessment of the improvement of risk monitoring process. Evaluating and learning lessons from different risky incidents. Detection of alterations in both the external as well as internal context counting the alterations to risk criteria as well as to the risks which might call for the need of revision of the risk treatments as well as priorities (Rampini et al., 2014). Furthermore, identification of different emerging risks is also a significant part of the process of monitoring and reviewing the risk management plan.

Part A

Assessment 4 Answer to Question 1

Three ways in which research can be undertaken for risk related issues

Qualitative Analysis: This technique can be undertaken as a process of initial screening to recognize if further analysis of risk is necessary, when the assessment is fitting for decisions and in case when numerical data or else resources are not enough (Haimes, 2015).

Semi-Quantitative Analysis: This technique establishes value to diverse risks in a bid to create a more expanded ranking range than the one which is normally attainable from qualitative evaluation.

Quantitative Analysis: This technique of risk utilizes numerical values to evaluate both the consequences as well as likelihood of risk (Sadgrove, 2016).  

Answer to Question 2

Fishbone checklists and brainstorming for risk management

Fishbone Diagram:  Fishbone diagram is also known as a cause and effect diagram that is used as a visualization tool for classification of probable causes of an identified problem in abid to recognize the root causes (Bromiley et al., 2015).

Checklist: The checklist of risk serves as a thinking device or discussion prompt that can help in making it certain that the team has looked at the project and the environment from different angles at the time when they sign off on the list of risk.

Brainstorming: It can be solely utilized for generation of ideas; however, it does not include analysis. Brainstorming can also be utilized to develop a wide variety of ideas during a short period of time. Brainstorming techniques that can be utilized include the following:

  • Structured brainstorming
  • Silent  brainstorming (Howes et al., 2015).
  • Brainstorming in free form
Answer to Question 3

Five stages of risk likelihood

  • Almost Certain: Highly likely to occur
  • Likely: Will occur probably but cannot be considered as a persistent matter of concern
  • Possible: May occur occasionally
  • Unlikely: Not anticipated to take place but is definitely a possibility
  • Rare: Very much unlikely and this will ever occur (Haimes, 2015). 
Answer to Question 4

Five levels of consequence for risk

-Extreme Consequences (this essentially has an adverse influence on the important areas let’s say, huge loss or else decrease in enrollment of number of students in a specific educational institution)

-Major Consequences (loss of government financing owing to loss of enrollment that again can be controlled by improved process of management) (Lam, 2014).

-Moderate Consequences (damages for short period of time that can also be repaired)

-Minor Consequences (moderate reduction in the enrolment and registration of students)

-Insignificant Consequence (minor decrease in the overall enrolment of students) (Haimes, 2015). 

Answer to Question 5

Three treatments of risk

  • Modification of the possibility of the risk to enhance probable beneficial outcomes (Chan & Wong, 2015). 
  • Attempting to influence probable consequences to enhance the anticipated gains
  • Distributing the risk with other parties that might contribute by delivering additional resources that might increase the overall likelihood of specific opportunity or else the anticipated gains.
  • Maintaining the residual risk
Answer to Question 6

Risk Action Plan (Key inclusions)

Important things that can be included in the risk action plan are as follows:-

-Identification of Risk: Ranking of the risk under consideration (Calomiris & Carlson, 2016).

- Rating of risk: proper rating of the identified risk in different classes such as low level, moderate level, medium level, high level and the extreme level)

-Treatment action or control- Specification of the treatment action or else the controls that can be undertaken for treatment of the recognized risk (Rampini & Viswanathan, 2016). 

Answer to Question 7

Way principles as well as guidelines assist corporations to lessen risk

International Risk management Standard that is essentially (AS/NZS ISO 31000-2009) delivers principles as well as guidelines for management of risk. Again, the organization also adopts important principles of management of risk as laid down in the standard and actively operates towards compliance with the principles in order to make certain that management of risk is effectual (Howes et al., 2015).

Answer to Question 8

Legislation listed and the way it can affect the process of management of risk

  1. Privacy law

Privacy law can be regarded as an Australian law that regulates the overall process of handling of different personal information about individuals. In essence, this comprises of collection, usage, storage, admittance to information and rectification of information along with disclosure of specific personal information (Howes et al., 2015).

  1. WHS regulations

WHS legislation comprises of a model such as WHS Model, specific Codes of Practice as well as national compliance along with enforcement policy. In essence, Work Health and Safety is the foundation of the WHS Act that is enacted across the nation Australia to harmonize the health of operation as well as safety regulations (Bromiley et al., 2015).

  1. Contract Law

Contract law encompasses all kinds of regulations that are directed towards enforcement of certain promises ( Soin & Collier, 2013). Particularly, in Australia, the contract law is mainly regulated and controlled by the “common law”, but more and more statutes are supplementing the common regulation of agreement-specifically in relation to protection of consumer. This contract law is widely categorized into five different classes:-

-Contractual Formation

-Scope as well as content of agreement/contract

-Evasion of contractual obligations

-Performance and termination of agreements/contracts and

-Remedies for violation of agreement/contract (Soin & Collier, 2013).

Answer to Question 9

Three adjustments that can be made in the workplace to help a person with a disability

The three different adjustments that can be carried out in the place of work to assist a person with disability include providing facilities of mobility impairment (counting dexterity impairments that include ramps, automated doors, vehicle modifications, hand rails, stair lifts and many others). Management can also provide facilities for an individual who is primarily deaf or faces difficulty in hearing such as hearing loops, video phones, and visual alarms among many others (Lam, 2014). In addition to this, management can also deliver facilities to individuals who are blind or has impaired vision that include screen magnification, Braille machines, CCTV magnifiers and many others.

Answer to Question 10

Categories of insurance

Two categories of insurance a particular corporation can be taken into consideration before process of purchasing and for each category of the insurance and the benefit that is enjoyed by the entire organization. Property insurance can be considered irrespective of the fact whether a business owns or else leases a certain space (Sadgrove, 2016). Professional liability insurance can also be taken into consideration in order to cover a specific business against claims of negligence and these results from faults or failures to perform.

Barcode system is often viewed as an approach for cutting cost as well as saving a lot of time. It is advisable to John in implementing barcode system for his convenience stores as the system is both cost-effective and reliable at the same time. Some of the advantages of implementing barcode systems are listed below with proper justification:

  • John should implement barcode systems in his convenience stores as it eliminates the possibility of human error. Manual entered data lead to error and this can be avoided by using barcode systems. This system is fast, reliable and takes less time than entering each product by hand.
  • John should implement barcode system in his convenience store as it reduces employment training time. This system takes only minutes to master the hand-held scanner for reading the barcodes.
  • Barcode systems are not so expensive to design or print
  • Barcode system are extremely versatile by nature
  • Improvement in the inventory control by using barcode system
  • Planning and research- As a standalone forms of business, it is needed for an entrepreneur to first write a detailed business that include location, type of products and financials needed for opening and running the business. On the other hand, as a franchisee, it is needed to research for different franchise opportunities to see if there is any opportunity that fit with the business goals and philosophy. It needs proper consideration of all the aspects of franchise business such as financials, track records of existing franchise as well as growth of the parent company over a passage of time.  
  • Preparing to open- As standalone forms of business, the entrepreneur need to start from the scratch and gain lot of experiences that sometimes may be good or bad. The entrepreneur need to hire and train staff members and need to find suppliers for the business established. On the other hand, in case of franchisee system, the business functions similar like any other franchisee units that exist in some or other place.

Advising John about various short-term and long-term finance available to John’s new business and their merits and demerits

  • Bank loans- Traditional bank convenience store loans are mostly preferable as the best option for any convenience stores. A traditional bank loan also known as bank term loans prove to be great option if the convenience store has good credit as well as well-established and generates consistent business profits. The rate of traditional bank loan is 5 to 10% and for 1 to 25 years.
  • SBA Loans- John can even consider SBA loans as it is one of the great options for the small convenience store business activities. The SBA loans help convenience stores with affordable financing working capital, purchase of property as well as equipment leasing. . The rate of SBA loan is 6 to 8% and for 7 to 25 years
  • Alternative business loans- There are many convenience store owners who have good credit as well as generate decent profits but are not eligible for traditional bank convenience store loan or SBA loan.  It is the time when convenience store owner should opt for alternative business loans where the rate if 9- 20% and term is 1 to 5 years.

Discussing the negotiations John likely to carry out in order to attract an investor as a partner into his new business venture

John needs to negotiate on several vital terms with investors while discussing on the venture capital money. In order to start any business, it is vital to have access to venture capital so that all the expenses are met and carried out in smoother terms. The existing business of convenience stores of John is earning profits but lack proper accounting system where they failed to record accounting transactions by using correct software. After that, John decided to start a new business as well as he was having a vacant place leftover. In that case, John needs to take into consideration different forms of financing options that are already mentioned in the above question with proper justification. Investors need to be explained with a presentation where each of the business need are mentioned with proper detailing staring with product offering, financing structure and management aspects.

Modifying the sample chart of accounts that include appropriate coding for the Fuel Station, car Wash and Motor Accessory business

Budgeted Convenience Store Purchase:

1st Year

2nd Year

Particulars

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

TOTAL

1st Quarter

Projected Conveniance Stores Revenue

$450,000

$472,500

$496,125

$520,931

$1,939,556

$546,978

Average Cost of Sales (in %)

85%

83%

82%

80%

80%

Projected Cost of Sales

$382,500

$393,593

$405,007

$416,752

$1,597,851

$437,589

Add: Closing Stock

$59,039

$60,751

$62,513

$65,638

$65,638

$441,539

$454,344

$467,519

$482,390

$1,663,489

Less: Opening Stock

$57,375

$59,039

$60,751

$62,513

$57,375

Total Convenience Store Purchase

$384,164

$395,305

$406,768

$419,878

$1,606,114

Budgeted Fuel Sales:

 

1st Year

Particulars

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

TOTAL

Projected Unleaded Regular Petrol Sales Volume (in ltr.)

11250

12375

13612.5

14973.75

Average Selling Price per ltr.

$1.14

$1.16

$1.19

$1.21

Total Unleaded Regular Petrol Sales

$12,825

$14,390

$16,145

$18,115

$61,475

Projected Unleaded Premium Petrol Sales Volume (in ltr.)

9000

9900

10890

11979

Average Selling Price per ltr.

$1.19

$1.21

$1.24

$1.26

Total Unleaded Premium Petrol Sales

$10,710

$12,017

$13,483

$15,128

$51,337

Projected Leaded Regular Petrol Sales Volume (in ltr.)

4500

4950

5445

5989.5

Average Selling Price per ltr.

$1.06

$1.08

$1.10

$1.12

Total Leaded Regular Petrol Sales

$4,770

$5,352

$6,005

$6,737

$22,864

Projected Leaded Premium Petrol Sales Volume (in ltr.)

6750

7425

8167.5

8984.25

Average Selling Price per ltr.

$1.16

$1.18

$1.21

$1.23

Total Leaded Premium Petrol Sales

$7,830

$8,785

$9,857

$11,060

$37,532

Projected Deisel Sales Volume (in ltr.)

22500

24750

27225

29947.5

Average Selling Price per ltr.

$1.10

$1.12

$1.14

$1.17

Total Diesel Sales

$24,750

$27,770

$31,157

$34,959

$118,635

Total Fuel Sales

$60,885

$68,313

$76,647

$85,998

$291,843

In case of any contingency situation, what will be the strategies that will be available to John for overcoming the contingencies?

In order to mitigate any contingency situation, John should plan a contingency plan in their business approach. Here, planning is vital in every aspect life but when the case is that of an entrepreneur, they need to plan ahead of time. Planning should be done by John for:

  • Better preparation
  • Better flexibility
  • Mitigate problems
  • No last minute comprehension 

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