Safeguarding Success: The Significance of Risk Management

Review organisational processes, procedures and requirements for undertaking risk management

Risk has a likelihood of occurrence in every organisation. The business has therefore established the process for understanding risk management by the present risk management standards of the firm. Hazard management is achieved through the application of policies, practices, and procedures to identify, analyse, establish the context, evaluate, monitor, and communicate risks. There is a risk manager among the staffs who are responsible for managing the risk management Frameworks across the business.

Business description

Our business is a Bed and Breakfast with 20 rooms located in the central coast. It has 10 staffs including 1 chef, 1 manager who is also responsible for risk management, 2 cleaners, 2 kitchen staff, 1 reception and 3 room crews.

Success factors, goals and objectives

The company is presently supporting 20 guests which is a good number and shows advancement in amenities. The founders hope to expand the facilities to involve more than 20 guest suites.

External and internal stakeholders and their roles in the business

The staffs and shareholders are the internal stakeholders since they work for or own the industry. External stakeholders comprise of the communities around, consumers, suppliers, associates, and the government. The customers are considered as the immediate external stakeholders. The business, therefore, focuses on attracting, regenerating, and retaining the loyalty of the major customers. The customers facilitate the business by buying the products and services. The essential factor is that the company operates within the communities and their activities can affect the firm and its customers. Concerning the government, the business pay taxes promoting state agencies to make decisions that significantly affect the operations of the business.

Business partners and suppliers are also more essential stakeholders as the corporation develops shared goals, strategies, and visions with them. Suppliers collaborate to deliver the best for the company and its customers. Also, the business partners expect the firm to operate ethically to prevent tarnishing the reputations of the business with those it associates.

Participants of hazard management plan

The people participating in the creation of a risk management plan include the audit and risk management committee, risk manager, and the board of directors. After making the plane for risk management, the president of the business approves after evaluation of the process and procedures to check their effectiveness.

PEST analysis

The positive collaboration with local government agencies has brought the company into the essential area of economic development in the central coast. The government has recognised that tourism is essential for the nation making the state to appreciate local bed and breakfast businesses through the construction of road infrastructure to aid access.

The company is responsible for caring the environment as a social responsibility which promotes customer preferences. Customers like businesses that take care of the environment.  The company focus on eliminating pollution through the use of recyclable packages.

The social components and changing lifestyles of people have caused various cultural changes around the business area. As the cost of living increases, individuals prefer low-cost services that are of excellent standards. Thus, the changes in living standards lead to shifting of consumers towards small businesses such as our company.

Technology is another variable that influences the operation of bed and breakfast business. Even though the company does not require much technological advancement, availability of electrical appliances and IT services provide comfort for both staffs and the customers.

SWOT Analysis

Strengths

The location is great because there are more customers and business opportunities. Although the business might seem small, people always travel, and many do not enjoy staying in big hotels.  Additionally, the business has fantastic facilities and a good number of staffing that can provide high-quality services to customers.

The existing weakness is that the growing technology with internet in the area has caused tenancy rate to increase making the facility to look small. Additionally, the developments have made people to rent their flats and homes.

The opportunities for the business are limited to acquiring extra facilities for more customers. Adding properties will allow the business to earn more revenue. There is more chance to expand the business through opening other branches.

There are competitive threats which are the main issues experienced by the business. There are other similar companies that have operated for many years, and they are continuing to improve regardless of economic and technological changes.

2. Identification of dangers:

Risk review and identification of the external and internal risks

The company identifies risks by foreseeing the hazards that have a likelihood of impacting the organisation. All risks are documented in a hazard register. Some of the possible internal risks include fire outbreaks and minor accidents such as burnings, falling, and cuts. The external risks include natural phenomena such as floods and winds which may destroy the facilities or hinder consumer access.

The process of hazard identification and required documents

The identification of risks occurs at different levels. The first level is strategic risk identification as part of the planning process. The reviews are made through workshops and from the recorded registers. New risks are usually recorded for future review.  The other level is departmental risk identification where the risk manager identifies the possible dangers and documents them in a risk register. The risk officer performs a regular revision of the risk documents to enhance timely identification and management of the emerging threats.

3. Analyse and Evaluate risks

Risk Analysis and Evaluation

Risk evaluation considers the importance of the operations to the business, the amount of control over the risk, potential losses, and benefits and opportunities presented by the occurrence of risks. The dangers are ranked according to the order of priority. In this case, risks such as fire outbreaks are linked to termination of the operations of the business. The amount of control over the risk is restricted by the amount of fire and spread.

Uncertainties such as falling and minor cuts among workers are minimal and considered as minor. Their likelihood of occurrence is low and sometimes no damages made. Additionally, the occurrence of natural phenomena is a rare and such risk is considered to be of less impact. However, the risk with fewer implications provides opportunities for establishment of preventive structures after warnings, and this enhances developments.

Definitions

i. The degree of control you have over the risk

The degree of control is the level of potential that the risk manager has to enhance risk prevention and the level in which the risk is manageable. Some risks are hard to control, and others are easy to handle.

ii. The potential losses which may arise from the risk

These are possible losses that are caused by the risks and include loss of staffs and destruction of the facilities. Significant losses should be identified and avoided.

The impacts of possible risks are linked to loss of properties and loss of workers in cases of major threats.

iii. The benefits and opportunities presented by the risk

These are developments that may arise after the occurrence of risks through activities such as mitigation and recovery programs. Examples include the building of new and modern facilities after the old-fashioned one has been consumed by fire outbreak.

The plot of the risks assessment matrix

Consequence

Insignificant

Minor

Moderate

Major

Catastrophic

Almost Certain

Staff falling

Staff injuries

Kitchen staff fire burns

Fire outbreaks

Floods occurrence

Likely

Low  

Moderate

Moderate

Low

Low

Possible

Low

Moderate

Moderate

Low

Low

Unlikely

High

Low

Moderate

High

High

Rare

High

Low

Moderate

High

High

The risks that are likely to occur require immediate actions for treatment and mitigation.

4. Manage the Risks

Implementation of a Risk Management Plan

The following table is used to guide the plan of risks treatment in the business.

Source:https://www.usc.edu.au/explore/policies-and-procedures/risk-management-procedures

The context is established to enable the company to articulate its goals and define all factors to be considered in the treatment of risks. Then, identification is performed through foreseeability of the possible dangers. The identified risk is analysed to develop an understanding of the risks and to offer an input to risk evaluation process. After analysis, the risk is evaluated to help in decision-making processes. After that, the risk is treated through a selection of one or more identified options. Communication and consultations are done throughout the treatment process. After treatment, the dangers are monitored to ensure that the treatment process works.

Documents for risk management plan

The essential documents required to be kept for risk management plan include risk registers. The company has employed a risk officer who ensures that all documents are stored and updated appropriately.

The Monitoring Process to Monitor the Risk Management Plan

Monitoring is done through regular identification and evaluation to see if the implemented actions are working.

a. Explain how you will evaluate the risk management processes of your business.

The risk management process will be evaluated through regular internal and external auditing to ensure that they are effective.

5. Plan Communication

All the stakeholders will be informed about the risks and any changes in the treatment process in case of new updates. The risk manager and the IT officer will be responsible for ensuring that the information reaches all the stakeholders immediately if any change occurs.

Appendix 2- Risk management action plan

Risk

Assess risks

Options /Control

Timeline

Responsible

Fire outbreak

Low

Installation of fire extinguisher, alarms, and maintenance of electrical appliances

Immediate action

Risk manager

Falling of staffs and customers

Low

Maintenance of broken floors and printing of caution notices like “slippery floor.”

Immediate action

Risk manager and other stakeholders

Floods

Low

Proper installation of engineering structures for preventing floods damages

Immediate action

Government

Minor fire burns of staffs

Moderate

Provision of safety gears

Immediate action

Risk manager and the administration

Appendix 3 Meeting minutes

Meeting minutes

Location:

[Address or room number]

Date:

[18/08/2018]

Time:

[10 AM]

Attendees:

[ All members of the Risk Management Committee]

Agenda items

1. Discuss current risk management process of your chosen organisation  

All the members agreed that the ongoing risk management process is excellent and effective

2. Identify and list the risks for your selected organisation.

The identified risks include fire outbreaks, accidental falling of staff and customers, and coastal floods.

Action items

Person responsible

Date

Discussion and points

1)The risk management process of the chosen organisation include identification, analysis, evaluation, and treatment

Risk manager

18/8/2018

The risk management process is good and effective. The risk manager should ensure its implementation.

2) risk identification is done through regular auditing and revision of the registers

Risk manager

18/8/2018

The process is good and can be adjusted in cases where more information is required about the risk.

Approval of Manager (Your Assessor)

Signature