Evaluation Of Business Risks Associated With Hungary Jacks Restaurant And Risk Management Plan

Definition of Business Risk

Primary agenda of this assignment is to evaluate present and future risks associated with selected business venue. Risk is inevitable to business but creative and forward thinking can help in tackling these risks optimally. This paper aims to highlight all possible business risk encountered by Hungary jacks and prepare a risk management plan to deal with it.

Various definition are given to risk but in simplest form it can be regarded as uncertainty and un-desired outcomes. According to oxford dictionary, risk can defined as a situation that involve any form of danger, it involve any possibility of unpleasant scenario (oxforddictionaries.com, 2018). According to association of project management, it can be defined as a combination of chances of occurrence of any unpleasant event and extent of impact of its consequences of occurrence.  Risk has also been defined as likelihood of any form of variation that can take place in planned event leading to negative consequences (Saouma, 2012). It is an activity that can cause harm, unpleasant or negative scenario, causing hindrance in goal achievement (Kendrick, 2015). Term risk also holds different meanings in different context, such as business, finance, economics, industry etc. different level and type of risks are involved in business (Clifton, 2012). A business also involve different type of risks such as financial risk associated with financial transaction, competitive risk, strategic risk associated with business operation, industry environment and investor relationship, reputational risk, project risk, legislation risk, compliance risk, operational risk associated with business operations and administrative decisions etc. (Ehsan, Alam, Mirza, & Ishaque, 2010). In business terms, risk includes uncertain, unknown events that might impact business profit or loss adversely.

Physical 

While analyzing risk associated with facility, assessing physical risk is very crucial. It includes internal and external environment conditions. It includes facility environment, infrastructure, electricity, lighting, fuel impact employees and customer safety within restaurant. It also includes risk of food contamination, equipment breakdown, employee lawsuit etc. (Roy C & Brotherton, 2008).

Equipment’s safety includes compliance of equipment requirement to appropriate standard. Equipment protection program for electronic and corrosion issues (FEMA, 2005).

Proper security and alarming for emergency must be checked. Proper fire safety system must be implemented including hazard evaluation; evacuation process etc. proper evaluation of power backup must be analyzed (Ransley & Ingram, 2012).

Brand and reputation is key element which is at risk constantly, slightest of issue might lead to poor brand image. Hungry jack’s is a household name in Queensland with rich history and strong customer base.  Another is keeping track with different stakeholders such as investors, society, communities and government. Different type of business contingent interruptions might take place in supply chain due to environmental factor. Political and economic stability also impact business process.

Physical Risks Associated with Facility

This is inevitable risk associated in any business, it include transactions with vendors, customers and loans. There are business loan taken for expansion and growth, change in interest rate impact profitability. Cash flow and amount of credit significant impact investor relationship, in external financing fixed amount of cash flows must be given by company. Business expansion in different market involves investment and liquidity risk. Sometimes, changing customer preference and intense market competition also impact business profitability significantly (Hampton, 2012).

Different type of human risk includes staff and volunteers, clients and customers, third party vendors and contractors.  It is crucial to maintain proper workspace with adequate lighting, comfortable work structure and infrastructure to enhance workers ability to get work done. Customers are heart of any business, proper restaurant environment, facility management, parking, and signage, adequate response by front office staff, quality food and good behavior help in bringing more business (Galai & Mart, 2006). Finally the contractor and vendors help in running the business properly by providing raw materials and other supportive elements.

Risk management is a process of planning, analyzing, forecasting and developing strategies to reduce adverse impact of unforeseen scenarios and unpleasant activities on the company in minimum cost and less time (Hiles, 2004). Risk is inevitable part of business, every activity involve certain level of risk but planning helps in knowing the uncertain and make contingency plan to deal with it. Risk management process involves five key stages such as identification, assessment, evaluation, mitigation and monitoring of risk. Risk management process involves making strategies to deal with different business risk, control and compliance of legislation and other strategic regulations.

There are two types of risk management, traditional and enterprise. Traditional approach is a reactive risk management model that involves identification of accident possibility. Key steps include planning, organizing, leading and controlling. It aims towards evaluation of feasible alternative risk management technique to reduce risk through calculation of potential loss and financing it by allocating budget and proper administration actions (Zhao, Hwang, & Low, 2015).

Another is enterprise risk management that involves strategic process of managing business risk by ailing it with company vision and strategic goals. This method states that while planning a facility or business, one should conduct risk analysis at initial stage to reduce different losses, better lead time and opportunity exploitation. This method involve developing a risk management program by a dedicated team, so that risk management framework can be integrated with business processes, it include stages such as risk decision, treatment, risk reporting and monitoring. However, this method involves high cost, time and resources from the company.

Financial and Non-Financial Risks

Risk management helps company in avoiding unpleasant scenarios, difficulties and cost. Conducting proper risk analysis facilitate in identifying risks that should be persuade or shunned.  Risk management help in understanding need of every business in detail; it helps in providing knowledge about corporate risks. However, it is difficulty to quantify benefit of risk management, as the records of losses or prevented accidents are kept by different departments. Risk management is implemented with different objectives, for instance forwards thinking organizations implement risk management for to produce better results whereas laggards organizations do to prevent scandals. Different legislative requirements, market risk, scandals make it necessary to plan risk.

Risk management process helps in making business operations effective, as management can discover different business risk and inefficiency associated in business. It also helps in enhancing customer satisfaction and improving bottom line (Sadgrove, 2016). Risk identification leads to optimum utilization of resources, protecting brand image, and develop a pool of data and reusable information that can be used in number of scenarios (Landry, 2014).

This section aims to evaluate Hungry Jack’s dining restaurant location, it include risk ranking and risk analysis of selected location. It states different findings in consideration to risk associated with selected location and recommendations to overcome the same.

The Risk Rating System

Risk ranking system is risk facilitation method, it is also known as risk matrix, filtering or indexing (Royal Society of Chemistry (Great Britain), 1998). It aims to provide focus on critical risk associated with selected business location. This method focuses on breaking one big risk into small components and its impact. It helps in prioritizing and filtering each risk.it helps in dealing with high degree of complexity, offer flexibility. It requires clear identification of risk question, then subheadings related to risk must be identified. Here, key question is different types of business risk associated with Hungary Jack’s restaurant at selected location. Keu subject of analysis include physical, non-physical, financial and people elements of risk.

Notes to above ranking table:

Steps 1 – Giving rank to event likelihood from 1 to 4

4 = Very likely – Almost certain to occur (10 year time period)

3 = likely – Probably will occur (10 year time period)

2 = Unlikely High chances that event will not occur (10 year time period)

1 = Very Unlikely – definitely it will not occur (10 year time period)

Step 2 – Giving rank on scale of 1 to 4 to the severity of risk

Human Resource Risks

4 = Very High – It will certainly cause hindrance in company goal achievement

3 = High – have significant complications in achieving business objectives

2 = Medium – minor problems in achieving business objectives

1 = Low – No effect on business objective at all

Step 3 – Adding average of likelihood and severity ranking

Step 4 –   Give risk ranking as high, medium, or low according to the following criteria:

6-8 High Risk highlighted with red – to deal with this risk, detailed mitigation action is required

4-5 Medium Risk highlighted with yellow – mitigation action

1-3 Low Risk highlighted with green) – No mitigation action required

Venue VRA

Major findings from venue risk analysis on Hungry Jack’s Queensland outlet are as follow;

• First element in restaurant business is facility protection due to immense risk involved in terms of décor, heavy fire load, cooking system and heavy equipment’s.
• Next key element is employee health and safety due to risk factors due to operational processes such as food preparation, standing, fall management, workplace violence etc.
• Restaurant is also liable towards its stakeholders and public at large, it include customer safety, proper behavior and service, contractors and vendors payment on time, information management, protecting food contamination.

Key strategies that can be implemented to mitigate or reduce mentioned risks are as follow;

• Inspecting, proper cleaning and maintenance is the key to control in-house risk, properly trained staff needs to test the equipment’s, electricity, heating and ventilation process. They also need to ensure all equipment’s are installed as per manufacturer guidelines. Restaurant must implement an automatic as well as manual fire suppression alarm and control system; all employees must be trained on using the same. Sudden emergency check must be conducted every three months to check safety system.
• Health and safety of all employees needs proper training, written safety protocol, employees must be involved in safety related decisions and planning, regular record keeping on injuries and monthly safety check must be conducted. Wearing proper gloves, quick reporting of poor health system and use of automatic machines for task like washing dish help in controlling illness. Proper mentoring and observation by supervisor.
• To protect food contamination proper food log must be maintained, fresh food must be kept, uncooked food must be stored properly, and proper sanitization must be done, doing business with reputable vendors or under strict supply chain guidelines.
• Finally, restaurant must maintain a contingency plan to deal with emergency scenario.

Conclusion

Above analysis present various risk elements associated with venue and business that management of Hungary jacks needs to consider, ensuring smooth functioning. Ability to offer quality service to customer, quality environment and work culture to employees is mandatory for financial well-being of the company.  Running a restaurant business require optimum consideration toward safety measures to avoid any unpleasant scenarios.

Clifton, D. (2012). Hospitality Security: Managing Security in Today’s Hotel, Lodging, Entertainment, and Tourism Environment. New York: CRC Press,.

Ehsan, D. N., Alam, M., Mirza, E., & Ishaque, A. (2010). Risk Management in construction industry. Retrieved December 2, 2016, from www.meeting.edu.cn: https://www.meeting.edu.cn/meeting/UploadPapers/1282726331593.pdf

FEMA. (2005). Risk Management Series; Incremental Seismic Rehabilitation of Hotel and Motel Buildings. Washington: FEMA.

Galai, D., & Mart, R. (2006). The Essencials of Risk Management. USA: The Machgraw Hills companies.

Hampton, J. (2012). The AMA Handbook of Financial Risk Management. New York: AMACOM.

Hiles, A. (2004). Enterprise Risk Assessment and Business Impact Analysis: Best Practices. Brookfeild: Rothstein Associates Inc,.

Kendrick, T. (2015). Identifying and Managing Project Risk: Essential Tools for Failure-Proofing Your Project. Washington: AMACOM Div American Mgmt Assn.

Landry, J. (2014, October 24). What is Risk Management and Why is it Important? Retrieved February 4, 2019, from blog.westmonroepartners: https://blog.westmonroepartners.com/what-is-risk-management-and-why-is-it-important/

oxforddictionaries.com. (2018). Oxford Dictionaries. Retrieved Feb 4, 2019, from Oxford Dictionaries: https://www.oxforddictionaries.com/definition/english/risk

Ransley, J., & Ingram, H. (2012). Developing Hospitality Properties and Facilities. London: Routledge, .

Roy C, W., & Brotherton, B. (2008). The SAGE Handbook of Hospitality Management. London: Sage.

Royal Society of Chemistry (Great Britain). (1998). Risk Assessment and Risk Management. Cambridge: Royal Society of Chemistry (Great Britain).

Sadgrove, K. (2016). The Complete Guide to Business Risk Management. London: Routledge.

Saouma, R. (2012). Risk Management in the Swedish Hotel Industry. Sweden : Lap Lambert Academic Publishing GmbH KG.

Schieg, M. (2006). Risk management in construction project management. Journal of Business Economics and Management, 77-86.

Tarlow, P. E. (2002). Event Risk Management and Safety. London: Wiley.

Zhao, X., Hwang, B.-G., & Low, S. P. (2015). Enterprise Risk Management in International Construction Operations. London: Springer.

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order