Methods, Policies, And Benefits Of Risk Management In Business Essay.

1. List and briefly describe the application of six methods or tools that you can use to identify risks applicable to a business.

2. Why is it necessary for each business to have organisational policies and procedures relating to risk management and sustainability?

3. List six internal and six external conditions or situations which could create risk for a business organisatio

4.What are the benefits of aligning an organisation’s risk management procedures with the International Standard AS/NZS ISO 31000:2009? List at least 10 benefits.

5. List seven forms of legislation ( from all levels of government) that could affect business operations, ans explain why staff need to understand the key elements of legislation. You can include legislation that is specific to certain industries or list generic legislation applicable to all business opreations.

6. What are the advantages of auditing for risk management? List at least eight.

Methods and Tools for Identifying Risks in a Business

Risks identification is critical for any type of business, hence methods for application used for identifying risks in a business are as follows;

1. ISO/IEC 31010:2009: Applying this standards will easily allow identifying all possible risks that exists within business functionality.  
2. Brainstorming: Employees, labours and other workers will be asked to provide feedback to manager regarding all possible risks that exists.
3. Interviews: Internal and external staffs engaged in the workplace will be contacted regarding possible risks that exists(Yazici, 2009).
4. Checklists: A checklist of all possible organisational activities will be identified and then handed over to staffs to ensure that risks can be overcome.
5. Structured “What-if” Technique (SWIFT): A structure including estimation of all possible situations in which risks might arise can be posed and asked questions regarding.   
6. Scenario Analysis: Deeply analysing situations that lead to risks can help understand situations.  

Businesses necessarily need to have organisational policies and procedures relating to risk management and sustainability for the following reasons;

1. Employer can ascertain job duties for performing tasks and also risks associated with it arising from such duties.
2. Employer can establish set of guidelines for employee to follow for minimising risks with jobs.
3. In order to train employees such that they take fewer number of risks at work.
4. For providing appropriate equipment to do job safety and to keep equipment in safe working order(Haimes, 2015).
5. In order to implement emergency procedure such that workers are not injured, exposure to danger or for putting into a comprising situation.
6. In order to instruct employee for safety measures to allow them to do who to call and where to go in event of emergency. 

In order to create risk for business organisation internal and external conditions needs to be identified. The following are th e six internal conditions;

1. Stability: Depending upon existing situations that might exists in business environment and types of fluctuations risks can be estimated(Ahmed, 2007).   
2. Organisation Structure: Depending upon the structure of the organisation, management of functions and responsibilities, possible risks can be  easily assessed.   
3. Politics and Mismanagement: In case of existing politics, risks might arise and if not dealt in an adequate manner lead to significant consequences.
4. Resources: Allocation of resources and their management might include significant consequences on risks management procedures.   
5. Innovation: Innovation level and its implications might impact creation of risk within organisation.   
6. Incentives: In case of absence of incentives for risk management procedures, there might be tremendous amount of risks possible.  

External business risks are as follows;

1. Economy: The economy can pose significant amount of risks to the business as inflation, currency fluctuations, unemployment and market fluctuations(Bartels, 2007).
2. Political-Legal Factors: Increasing amount of bureaucratic control and indulgence of political influences can increase risks subsequently.    
3. Socio-Cultural Factors: Ageing population, large amount of poverty can lead to increasing socio-cultural challenges.
4. Technology: Presence of outdate technology might pose significant amounts of risks.
5. Shareholders: Absence of shareholder vision in identifying possible risks present in the system might pose risks. 

What are the benefits of aligning an organisation’s risk management procedures with the International Standard AS/NZS ISO 31000:2009? List at least 10 benefits.

There are several benefits of aligning an organisation’s risk management procedures with the International Standards AS/NZS ISO 31000:2009. They are as follows;

1. It provides principles and generic guidelines for managing risks
2. It can be applied in private, public or community enterprise, association, individual or groups. It is not specific to any sector or industry.
3. It can be applied throughout life of any organisation along with wide range of activities, strategies, decisions, operations, functions, processes, services, assets and products(Pritchard, 2014).  
4. It can be applied on any type of risks whatever might be its nature, with positive or negative consequences.
5. It encompasses generic types of guidelines which does not include any uniformity in risk management within organisation.
6. It application involves harmonization of risk management procedure in future and existing standards.
7. It cannot be intended for certification purposes.
8. It takes account of specific organisational standards for a common support in dealing with risks.
9. It does not replaces any type of standards.
10. It is a more common approach towards dealing with specific risks within sector(Purdy, 2010).    

Legislations are applied to every type of business operations. Staff has to understand key elements of legislation that are specific to certain industries or generic legislations for developing rules, procedures, guidelines and strategies. Following are some of the procedures;

1. Regulatory Laws: Laws relating to general regulations present can cause significant impact(Schatteman, 2008).
2. Labour Laws: Laws relating to employability, discriminations, work timings, payment of wages can have significant impact.
3. Tax Laws: Taxes imposed on businesses, other laws as corporate taxes can have risk associated with them.
4. Reporting Laws: Standards and technical reporting might impact standards pertaining to legislations.
5. Australian business and environmental laws: Relating to discard or treatment of wastes, energy requisitions and so on.
6. Australian export and import laws: Restricting or promoting sale of certain goods and services(Kimbrough, 2009).
7. Australian Intellectual Property laws: Relating to intellectual property rights and endeavours.  

Advantages of auditing for risk management across businesses are as follows;

1. A critical pillar of defence
2. Providing maximum value
3. Risk assessment and identification
4. Evaluation controls and remediation
5. Regulatory compliance
6. Enhanced process efficiency and effectiveness
7. Assurance towards Board, management and stakeholders
8. Internal management(Butterworth, 2007) 

Write a word paper explaining what a business risk assessment is and why organisations should make risk management an integral part of the management function.

In the paper explain:

• Why each organisation should have policies, procedures and practices that support effective risk identification

Risks management policies, procedures and practices can effectively support risk identification. It creates a hallmark for organisational maturity for strategic vision and including control systems. they shape direction for organisation to recognise risk management to be a critical business discipline. 

Policies and procedural documentation needs to align with legislation and not clash. Clashing with legislation might lead to implementation gaps and failure to recognise appropriate guidelines. The government has already provided certain policies and procedures that needs to be obtained and followed accordingly.  

International Standards can easily assist developing application of risk management strategies and plans. They can form a guidelines that can be followed by the organisation.   

Business risks can be identified by means of recognising activities that might lead to highest possible risks, identifying impossible scheduled commitments, unrealistic scheduling and planning and poorly organised project office. It can be analysed by top level management by evaluating various projects and feedback.   

Risks audits needs to be scheduled at appropriate timeframes to prevent from potential loss happening. Risk audits can be internal and external in nature, conducted for handling risks.    

To demonstrate competence in this unit you must design relating and develop a risk management plan related to: 

• The reduction of accidents, illness or incidents relating to worker or general public safety
• The prevention of operational discontinuity or reduction of associated costs
• The need for new innovative improvement/changes in processes or procedures and the associated risks
• Environmental impact issues-including resource use and management

You might nominate an organisation, describe its core business and its operations process then conduct an appropriate risk assessment and develop a plan for risk treatment.

Risk assessment might apply to projects being undertaken individually or by a team, or operations within a section of an organisation.

You must have:

• Access to workplace documentation relating to risk management
• Access to risk management tools and frameworks (training.gov.au)

The risk management plan should be suited to application in the workplace and should be suitable for submission to senior management.

You can draw on the guidelines in the International Standard AS/NZS ISO 31000:2009.This is accessible via internet.

Explain and document the procedures you follow to conduct the risk assessment ensuring appropriate consultation

Organizational Policies and Procedures for Risk Management and Sustainability

For this project you will need to read a variety of texts and write, edit and proofread documents to ensure clarity of meaning, accuracy, and consistency of information.

You will have to conduct research and use data collection skills when identifying and evaluating risks. Problem-solving skills will be required when identifying risks and developing treatment plans/controls. 

Organisation’s risks exists in construction works, when labours works outdoors. 

Risk are identified by evaluating individual activities conducted by employees. The possible risks are while making buildings, installing pillars and making structural changes. 

Employees are provided adequate equipment such that they can prevent themselves from risks of injuries themselves.   

In desired situation, risks are mitigated by a overseeing managers who conducts all activities. Desired situation might arise when controls are evaluated in appropriate manner, with proper monitoring and control.    

Risks from falling, from harmful gasses, materials harming individuals. 

Risks management plan ensures a procedural conduct for reducing impacts associated with consequences of risks. Risks management plans includes steps that conforms to procedures that has to be resorted to in cases of risks.  

No, risk management plan does not introduces any sort of risks. New risks will not arise in cases of formation of plan. 

Treatment plan fit with recommended International Standards by means of accommodating appropriate legislations and norms, as well as procedures. 

Employees, labours and other workers will be benefitted most from implementation of risk management procedures. The benefits will be planned by managers and  seniors. While stakeholders will be planned by upper managerial levels, it will be benefitted mostly by lower managerial levels. 

Implementing risk management procedures will benefit the organisation in terms of cost reduction. As in accidental cases organisation needs to pay high amounts, qualitatively they will include moral benefits on employees.     

In order to determine performance expectations, feedback needs to be obtained. A feedback process incorporating steps expectations will reflect on processes of performance areas.    

Monitoring and review of operation plan can be done by means of setting monitoring standards as KPI (Key Performance Indicator ) scores and evaluating the same. 

Success of risk management procedures will be measured by means of measuring total accidental outcomes in records. Past records with present will be matched to understand existing gaps in risks management.      

Format the risk identification, analysis and treatment plan/proposal in a manner that would be accepted by senior management in an organisation. 

Draw up, also a plan that would enable monitoring and evaluation of the risk treatment procedures you intend to put in place.

Submit the risk treatment/control plan the plan to support monitoring and all supporting documentation to the assessor.  

Table 1: Risk Management Matrix

Reference Lists

Ahmed, A. K. 2007. A review of techniques for risk management in projects. Benchmarking: An International Journal, 22-36.

Bartels, J. P. 2007. Multiple organizational identification levels and the impact of perceived external prestige and communication climate. Journal of Organizational Behavior, 173-190.

Butterworth, D. S. 2007. Why a management procedure approach? Some positives and negatives. ICES Journal of Marine Science, 613-617.

Haimes, Y. Y. 2015. Risk modeling, assessment, and management. John Wiley & Sons.

Kimbrough, R. L. 2009. The relationship between organizational culture and enterprise risk management. Engineering Management Journal, 18-26.

Pritchard, C. L. 2014. Risk management: concepts and guidance. CRC Press.

Purdy, G. 2010. ISO 31000: 2009—setting a new standard for risk management. Risk analysis, 881-886.

Schatteman, D. H. 2008. Methodology for integrated risk management and proactive scheduling of construction projects. Journal of Construction Engineering and Management, 885-893.

Yazici, H. J. 2009. The role of project management maturity and organizational culture in perceived performance. Project Management Journal, 14-33.