Managing Risks For A New Business Venture РMacVille Caf̩

Understanding the New Environment of Venturing

You are to require determinie the risk Context associated with establishing a new business outlet within the existing business structure..

Every firm seeks to manage risks associated with its business operations. Risk management ensures that an organization can progress in its business activities by having prior preparation on uncertainties that may affect its performance. The management of the MacVille Café must understand the new environment of venturing before embarking on the journey. The new location, Toowoomba store might have different requirements when compared to the home company thus making it necessary to understand the operating and business environment. To ensure that the new venture becomes successful, the management of MacVille will have to make a research and perform an analysis that will make it easy to identify the main challenges thus designing methods to mitigate them (Chee, 2014, p. 35). The risk management process will only become successful where the parent company will work with the new venture to ensure that business operations focus on the achievement of similar goals and objectives.

The MacVille Company focuses on expanding its business operations by broadening its customer base. The risk management department in the company should ensure that it has an analysis of the challenges facing the new venture and implement measures and strategies that will have a long-term impact. Based on the principles and guidelines provided by the risk management standard AS/NZS ISO 31000:2009, the MacVille Company will have an opportunity to develop its risk management framework which will make the new venture successful. The company has a risk management policy which aims at achieving success which will also facilitate improvement in performance in its industry of operations (Bosch, 2001, p. 168). The application of the risk management standard will have a positive impact on the business risk management framework which the organization will develop. The standard will also ensure that there is the application of its principles in the development of the risk management framework. Some of the elements that will facilitate the introduction of a successful risk management framework will include the principles outlined, attributes and objectives of a risk management plan. The principles will aid in developing the right risk management plan which will make the new venture success. Some of the principles will include creating and protecting value, integration of the risk management plan with the organizational goals and objectives, considering the cultural factors and embracing transparency and inclusion. The consideration of the strategic objectives will also play a vital role in the development of the risk management platform.

Developing a Risk Management Framework

In the role of risk management in the new venture, the scope of the activity will revolve around the business operations. The internal and external factors surrounding the business operations will also become vital in determining the nature of the risk management. The risk management framework will cover areas including the working environment, internal business operations, customer service, form of business and the legal requirements of the government. The risk management plan will, however, have to align with the overall goals and objectives of the corporation. The strengths, weaknesses, threats, and opportunities of the business will also fall under part of the determining factors for the business risk management plan.

The factors that will contribute to the success of the business risk management plan will include the availability of resources, support by the management and the cooperation of the staff members of the company. The application of these critical factors will ensure that there is a success in the delivery of the required risk management plan that will see to it that the firm becomes successful in the long term (Pidgeon, 1991, p.136). Focusing on objectives that aim at improving the success of the business operations and achievement of long-term goals will also ensure that the risk management activity will become successful in the future of business operations. Where the risk management plan receives the required support from the management and other stakeholders, it will become essential in eliminating cases of failure. Alignment of the risk management plan goals and objectives with those of the company will also ensure that there is the long-term success of the risk management plan as well as the business activities.

For the success of the risk management plan, the involvement of both internal and external stakeholders will have an opportunity to contribute. The internal stakeholders will include the employees of the company, shareholders, and the management. The external stakeholders will include the customers, suppliers and the community within which the business operates. The table below indicates the stakeholders and their role in the process of risk management;

Stakeholder	Internal/ External	Role in process	Stake in process
Employees	Internal	Assisting in performing various activities that would make the process successful Using their skills in developing the right and effective strategies for success of the risk management plan	Skills and expertise
Customers	External	Express their dissatisfaction and ways through which they expect the business to meet their needs Identify business processes that have a positive impact on their lives	Complaints, comments, and reviews
Shareholders	Internal	Express their satisfaction or dissatisfaction on the returns they receive Participate in the decision-making process of the company Express their expectations from the new business venture	Rating the returns and statement of expectations in future Opinions in the decision-making process
Suppliers	External	Stating their challenges in delivering to the corporation Expressing their expectations when performing business operations with the company	Complaints Expectations in future
Management (Directors and managers)	Internal	Providing resources required for the risk management activity Providing support to the risk management  team Giving guidelines to risk management plan	Managerial skills Resources
Community	External	Complaining about business operations which affect their lives Commending the company for the activities with a positive impact Expressing their expectations from the business in future	Complains Compliments

MacVille Company will have to consider the external and internal environment that will have an impact on its new venture. Below is the PEST analysis which the company will have to consider when developing the risk management plan;

Political- The location of the new venture will not present challenges in its business operations (Stoneburner, Goguen and Feringa, 2002). There is political stability in the region which implies that there will be the achievement of long-term success in the new venture.

Factors Contributing to Success of Business Risk Management Plan

Economic- The business environment presents challenges associated with competition and changes in tastes and preferences of the customers. Also, the tough times in the economy will have an impact on the decisions made in the management of business operations (Rasmussen, 1997, p.197). The risk management plan will have to consider the economic instabilities and apply the right measures to secure the company and its business operations.

Sociocultural- The Company will have to embrace the new culture and social norms of the people in the region of the new venture. The products and services delivered will also have to align with the sociocultural needs of the society (Zsidisin, Panelli and Upton, 2000, p. 190). The sociocultural environment determines the acceptability of a company by the people in a new region of venturing. The company will thus have to consider the sociocultural needs of the new location.

Technology- The use of technology has become highly dynamic in the business environment. Keeping updated with the new technology requires an organization to move with the trend and to ensure that all its systems apply the most efficient technology (Miller, 1992, p.320). The changes in technology will require the company to implement strategies and measures that will have an alignment with the overall goals and objectives. The use of technology also contributes to the success of business operations.

Strengths

• The company has a well-known brand
• The location in different parts will contribute to its success in the long-term
• Availability of resources to support the new business venture
• Adaptability to new environments and changes in the business environment

Weaknesses

• Poor management in the new venture
• New requirements for creating efficiency in the new business venture
• Increased expenses to fully establish the new venture
• Poor management of the business venture

Opportunities

• Renovating the venture in the region to succeed in attracting more customers
• Marketing its products to broaden its customer base
• Application of cultural competence to meet the demands of the customers

Threats

• Adhering to the new legal regulations by the council of the city
• Competition from the rivals in the industry
• Support of family businesses by the Toowoomba community

The methods of research applied in acquiring the information presented in the SWOT and PEST analysis include both qualitative and quantitative. For instance, through interviewing the employees in the business premises at Toowoomba and the community, it became possible to identify the strengths and the weaknesses as well as the threats and opportunities of the corporation. Also, through interviewing the customers and the suppliers, it became possible to have an overview of the business environment within which the firm operates (Power, 2007). The use of other secondary sources of information including the social media and some financial records from the bank, it was possible to analyze the external environment which affects business operations. Other research on the risks that would affect the business operations came from studying the trends in the market and the way in which competitors have managed to conquer the market despite the challenges.

Based on the scenario, MacVille will have a task of ensuring that its business operations in the new venture will yield success in the long term. Identification of some of the risks including the new business environment and the unpredictable customer base, the management will have to design the right measures and strategies to implement to enhance business success (Hallikas, 2004, p. 50). Some of the risks that the project will have to look into include;

Role of Internal and External Stakeholders in Risk Management

Cash handling risks- In the current business operations, cash handling shows a loophole that may have caused poor performance in the business. Loss and theft may take place in the business and there is the need to devise a new method of handling cash to ensure that instances of loss or theft do not take place (Glendon, Clarke and McKenna, 2016, p.45).

Written policy risks- The use of unwritten policies in the Hurley Café makes it hard to identify the limits and ways through which the employees should act in their operations. The lack of the written policies makes it hard to identify the extent to which business operations should take place (Sadgrove, 2016, p.78). The employees may also act in different ways which may not be acceptable but since there exists no written policy, it might become hard to identify the wrong and the right acts.

Risks associated with handling business with more professionalism- The way in which the business operates makes it hard to maintain professionalism and this affects the performance of business operations (Kerzner and Kerzner, 2017, p. 108). The employees may not qualify for the roles which they play since they may not have acquired the education levels required. The lack of professionalism may also act as a contributing factor to the poor performance of the corporation.

Risks related to the promotional strategy to apply in the corporation- The promotional strategy applied by the corporation may not meet the requirements of the company (Lam, 2014, p. 41). The strategy also does not focus on the contribution of the employees to the success of the company.

To: The CEO MacVille Pty Ltd

Cc: Shareholders, employees, customers, suppliers, community.

From: Branch Head Toowoomba venture

RE: RISK ASSOCIATED WITH THE NEW VENTURE

First of all, I would like to express my gratitude for the assistance accorded to my team in the risk analysis process of the new venture. As a company working towards meeting the demands of the customers and achievement of goals and objectives, MacVille Corporation requires every stakeholder to put their efforts towards solving the challenges experienced through its operations. The journey towards succeeding in making the new venture operational would require each of your individual assistance (Haimes, 2015, p. 63). The project to open the new venture grants every individual an opportunity to contribute by stating your fears, expectations, and opinions on how to go about the process. Every comment, complaint or compliment will be appreciated by my department in designing the appropriate risk management framework.

PEST Analysis of the New Business Environment

Secondly, I would like to bring on board some of the risks that I have identified together with my team. These risks require a mitigation plan that would make it possible to achieve success using the best risk management framework (Brindley, 2017, p.52). The risks that already identified include;

Poor handling of cash- The café does not have a proper way of handling cash which may lead to challenges in the way in which it performs business operations.

Lack of an operations policy- The café does not have a policy which employees follow in the course of performing their daily operations. Every person acts in a way which they feel right and acceptable to the community.

Failure to implement professionalism in operations- The café has employees who do not hold the qualifications related to their roles. This may have a negative impact on the performance of the firm if not rectified.

Promotional strategies- The café does not have a defined way in which it promotes its employees. Some who do not deserve promotion receive it and those who deserve do not get promoted. The challenge may affect the morale of the employees and it may also make it hard to achieve organizational goals and objectives.

The above risks require a mitigation plan and there is the need to have a framework that will aid in reducing or eliminating their impact. The café requires a plan that will have a long-term impact on business operations (World Health Organization, 2017, p. 2). With your help as the stakeholders in the company, it will become possible to have an operational branch and one that will work towards the achievement of the goals and objectives of the MacVille Company.

Your assistance will be highly regarded and will contribute to the breakthrough of the company in opening the new venture.

Regards,

Head of the New Toowoomba venture

Summary from the meeting with the CEO

 After meeting with the CEO, these were the main points addressed;

• Participation and support required from the management to enhance the success of the risk management plan
• Alignment of the café’s risk management plan to the MacVille’s risk management policy
• CEO’s role and participation in the risk management activity
• Participation of the stakeholders in the risk management framework
• Goals and objectives of the risk management plan

Fast Track Courier Services Corporation focuses on the different ways through which it will perform its operations by meeting the demands of the customers by motivating the employees. However, some changes which the company should make include convincing the truck drivers to become a part of the team which actively participated in making decisions in the company. the change will create oneness in the company by including the truck drivers in the decision-making process to make their working environment better (Harrison and Lock, 2017, p. 40). One of the goals of the corporation is to create a strong workforce united through providing equal opportunities to them. Since the truck drivers do not become involved in some of the processes, they need a platform that will treat them with equality thus the need for change.

Identification of Risks Associated with the New Business Venture

The performance of operations in the company fails to meet the objectives with regards to the following groups;

People- The implementation of the automated systems in the trucks went against the will of the truck drivers but they had to cope with it (Hillson and Murray-Webster, 2017, p. 56). Breaking the team in a truck by introducing the heavy weightlifters will make the truck drivers lack people to cooperate and work with which may affect their morale.

Policies and processes- The performance of operations in the company go against some of the confidentiality policies (Bolman and Deal, 2017, p. 121). For instance, the introduction of the GPS trackers made the truck drivers feel that they no longer have the privacy they require.

Technology- The technology implementation objectives fell under making the company more productive. However, the truck drivers feel that it has become a way of infringing on their privacy rights and that the company does not trust them in their daily operations. The decreased morale has affected business operation.

Structure- The method of communication breaks the communication structure. The objectives of providing a way of communication between the employees and the management have become impossible due to other means of communication including emails and newsletters (Certo, 2018, p. 123).

The current trends in the market include the use of technology to make work easier and application of inclusive leadership through effective communication. The trends will require the Fast Track Courier Services Company to introduce better ways of performing business operations through embracing technology (Van der Voet and Vermeeren, 2017, p. 240). The company should ensure that it has its employees determined to work towards the achievement of its goals through overcoming the methods applied by the rivals.

The company requires making some changes which improve its functioning by improving business operations. Bringing together the employees and working together to meet the demands of the consumers will become a change method that the company should embrace. The company should expand its operations to other parts of the nation which will facilitate its achievement of success. Also, competition will require the organization to make changes by introducing better services that will cater to the needs of the customers (Brunsson and Olsen, 2018, p.142). The management decisions that the company will make may also determine the types of changes which should take place.

As a way of identifying the change needs, some of the consultants will include human resources agencies, training officers, and auditors. The human resource agencies will look into the changes that will not have an impact on the employees even after implementation (Ginter, 2018, p.76). The changes will not violate the rights of the employees or deny them the freedom they require. The training officers will enable all employees to understand the need for change and how it will have a positive impact on their jobs. The auditors will determine the economic value of the changes and the resources required to make the process successful.

The requirements of the change management process will include the participation of the stakeholders, provision of resources and support of the management. The opportunities which will facilitate the change process will include the creation of a healthy working environment, expansion of business operations and broadening the customer base (Cameron and Green, 2015, p. 121). With the change management and current opportunities in the market, it will become possible to achieve the organizational goals and objectives. The change process will also become successful through the cooperation of the different stakeholders.

The managers who require being informed about the change process will include those in the human resource, accounting department, logistics department and those in the customer care. These managers will have a role to play in ensuring that the different departments are involved in creating the environment where change will be easily implemented (Hornstein, 2015, p. 295). The managers will also represent the opinions of their employees by stating their claims and opinions on the change implementation process.

The changes required in the organization based on priority include;

• Involving all employees in making policies and decisions for the corporation
• Empowering the truck drivers by treating them with fairness
• Applying processes that are acceptable to all employees
• Developing an organizational culture that treats every employee fairly

The involvement of all employees will provide them with an opportunity to decide and make policies which will have a long-term impact on business operations (Van der Voort, 2014, p. 380). The use of the order stated above will ensure that the company achieves success in implementing and making the change success

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