Legislation for Risk Management
Discuss about the Risk Analysis And Risk Register Of Greenville Enterprise.
The given report evaluates the risk analysis and risk register of the organization Greenville Enterprises. The organization is facing various types of risks and therefore, it is of utmost importance for the firm to analyze and prioritize the risks and take appropriate action accordingly. Based on the risks, a risk register will be prepared for the organization so that they can take appropriate action for the given different types of risk.
There are various examples of legislation, regulations, standards and codes of risks that the organization Greenville Enterprises can implement in order to management their risks in an effective manner. These are as follows:-
- Hazardous Waste Act, 2017
- ISO 31000:2009
- AS/NZS 4360
- Performance and Accountability Act (PGPAA) 2013
- Privacy Act 1988
- Public Service Act 1999 (Wynne 2016)
There are different types of risk that the organization can face while undergoing its business operations (Khan and Hashemi 2017). One of them is legal risk for toxic or banned chemicals in their products. Accordingly to Hazardous Waste Act, 2017, a permit needs to be taken in order to incorporate banned chemicals in the respective products. Without application of the permit, such banned chemicals cannot be used. Therefore, it is the primary duty of the organization Greenville Enterprises to identify and eliminate such foreseeable hazards in the respective chemicals. The organization also needs to maintain and implement the risk measure in an effective manner. Another type of risk which the organization Greenville Enterprises can face is political risk. The suppliers of the organization are from different countries and it may happen there is political unrest in the given countries. Therefore, it is of great essence for the organization to evaluate and measure the political risk before selecting a prospective supplier from a different country (McNeils, Frey and Embrechts 2015)
The organization Greenville Enterprises can also have social risk while undergoing its business operations. It has been observed that the customers are spending less on products due to the wide impact of Global Financial Crisis. Due to this reason, the sales and profits of the organization has suffered by a large extent (Glendon, Clarke and McKenna 2016). Due to this reason, it is of great essence for the firm to understand the mindset of the firm and take appropriate steps accordingly. Apart from this, the organization needs to set up its prices based on the needs and requirements of the customers. On the other hand, the organization needs to abide by the risk assessment standard of ISO 31000:2009 in order to minimize their respective risks. Another risk that the firm can face is related to internal business environment risk. It has been seen that there has been an increase in complaints from customers about online purchasing system problems/disconnections. Therefore, it is of great importance for the firm Greenville Enterprises to take appropriate measures in order to minimize their respective internal risks. The organization can also implement the risk management standard AS/NZS 4360 in order to manage their respective risks (Sadgrove 2016). Apart from this, the organization needs to train their employees regarding Public Service Act 1999 so that they are all aware about the respective rules and legislation of risk management and can perform their organization activities in an efficient manner.
Types of Risks Faced by Greenville Enterprises
There are various economical risks that the firm can face as well. Australia is going through a stage of global financial crisis. The GDP of the country is not moving forward. These kind of economic risk can affect any organization in a negative manner. Therefore, Greenville Enterprises needs to take some positive steps in order to ensure that these kind of market economy risks do not hamper their operations (Drennan, McConnell and Stark 2014)
Apart from the above risks, there are various forms of technological risks as well which the firm Greenville Enterprises can face in their respective short run and long run of business operations. It has been seen that the firm’s information systems and logistics systems are more than 10 years old. This is not considered as a good sign for them as they are unable to get a competitive advantage over its respective stakeholders (Galliers and Leidner 2014). The sustainability of the modern business organizations depends how well they can adopt to the modern technology due to the competitive business environment. Therefore, it is of great essence for the company to adopt modern forms of technology in order to compete in this competitive business environment. Lastly, there is another form of risk which is policy risk. It is of great essence for the firm to introduce and implement new set of policies so that they can achieve their respective long term and short term goals. However, it has been seen that the customers of the firm are unhappy with the services and policy of the organization regarding their online website and manufacturing process. Therefore, the organization needs to improve their respective policies in order to avoid any kinds of risks within or outside the organization.
The action plan for monitoring the risks are as follows:-
- Risks can be monitored with the evaluation of operating activities of the firm and feedback of their respective suppliers throughout the world
- Sales and profit figures for the next 2 years
- Feedback from the customers
- Monitoring the performance of the firm globally
|
Risk identification |
Risk assessment |
Risk treatment |
Risk monitoring and review |
|
Political risk |
It is of great essence for the organization to evaluate and measure the political risk before selecting a prospective supplier from a different country. Therefore, political risk is on the higher side for any global business organization. The organization needs to tackle these kind of risks in a smart way, so that their operations is not hampered and they can meet their goals and objectives in an effective manner. |
Political risks is unsecured and the organizations cannot do anything to prevent it completely. However, Greenville Enterprises should avoid those countries or areas where there is political unrest taking place. In this manner, they can successfully carry out their business and can attain their mission and vision accordingly. |
Such risks can be monitored with the evaluation of operating activities of the firm and feedback of their respective suppliers throughout the world (Niven and Bardsley 2013) |
|
It has been observed that the customers are spending less on products due to the wide impact of Global Financial Crisis. The revenue of the firm is going downwards due to lack of interest of the customers. |
The organization Greenville Enterprises needs to gain a competitive advantage among its competitors by improving their operations and market their products and services in a rigorous manner. In this manner, they can present their retail products as a regular necessity among the minds of the customers. |
These kind of risks can be measured from the feedback of the customers and total amount of revenue figures of the organization. If the revenue of the firm increases in the coming years then it can be inferred that the firm has successfully eliminate these kinds of risks. |
|
|
Internal business environment risk |
It has been seen that there has been an increase in complaints from customers about online purchasing system problems/disconnections and employees are dissatisfied with their respective jobs. |
The management of Greenville Enterprises needs to take appropriate feedback of all the employees and sought out all their grievances so that they are again motivated towards their work again. |
This can be measured with the help of the productivity of the employees and proper feedback from them. |
|
Legal Risk |
Legal risk for toxic or banned chemicals can be huge cause of concern for the organization. These risks needs to be avoided. |
The organization needs to follow certain ethical standards and avoid usage of banned chemicals in their products. |
These risks can be monitored with effective feedback from their customers. |
|
Economical Risk |
Economic risk can affect any organization in a negative manner. Greenville Enterprises must take some positive steps in order to ensure that these kind of market economy risks do not hamper their operations. |
The organization needs to set the prices of products in accordance to the current condition of the market economy. Apart from this, they need to minimize their cost of production (Magnan 2015) |
These kind of risks can be measured by evaluating the net profits of the firm. The profit margin of the firm needs to be evaluated on monthly or quarterly basis. |
|
The risk of technology is on the higher side, as the success of any modern business organization depends upon how well and fast they can implement modern forms of technology. Greenville Enterprises needs to adopt various forms of technology in order to compete in this competitive business environment. |
Organization needs to do proper research and development regarding modern forms of technology (Kurnia et al. 2015) After proper R&D, the organization needs to implement various forms of modern technology in terms of new information and warehouse systems. Apart from this, the organization Greenville Enterprises needs to provide adequate training and development to all its employees so that they get accustomed to the modern forms of technology. |
This risk can be monitored with the help of 360 feedback approach from all the respective stakeholders. Apart from this, the organization can also take feedback from its employees and its customers regarding the effectiveness of new and modern form of technology. |
Table 1: Risk register of Greenville Enterprises
|
Risk Id. |
Risk Description |
|
1 |
Political risk |
|
2 |
Social risk |
|
3 |
Internal business environment risk |
|
4 |
Legal Risk |
|
5 |
Economical Risk |
|
6 |
Technological Risk |
|
7 |
Operational |
|
8 |
Supplier |
|
Friends |
Accepted |
Justification |
|
|
Political risk |
Medium |
Yes |
It can be considered as medium |
|
Social risk |
Medium |
No |
Sales depends on customers |
|
Internal business environment risk |
Low |
Yes |
It can be solved easily |
|
Legal Risk |
High |
Yes |
Its high |
|
Economical Risk |
Medium |
Yes |
It is not controllable |
|
Technological Risk |
High |
Yes |
It gives competitive advantage |
|
Operational |
Medium |
Yes |
It is controllable |
|
Supplier |
Low |
Yes |
It is controllable |
Table 2: Summary report of suggestions with justification
From the above analysis, it can be concluded that the firm Greenville Enterprises is facing various forms of risks. The organization needs to take some positive measures in order to avoid these kind of risks. The given risk register will help the firm to evaluate and measure the risks in an effective manner.
|
Risk Id. |
Risk Description |
Likelihood of occurrence (e.g., %, or high / medium / low) |
|
1 |
Political risk |
Medium |
|
2 |
Social risk |
High |
|
3 |
Internal business environment risk |
Low |
|
4 |
Legal Risk |
High |
|
5 |
Economical Risk |
Medium |
|
6 |
Technological Risk |
High |
|
7 |
Operational |
Medium |
|
8 |
Supplier |
Low |
Table 3: Updating the Risk Register
References
Drennan, L.T., McConnell, A. and Stark, A., 2014. Risk and crisis management in the public sector. Routledge.
Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.
Glendon, A.I., Clarke, S. and McKenna, E., 2016. Human safety and risk management. Crc Press.
Khan, F. and Hashemi, S.J., 2017. Introduction. In Methods in Chemical Process Safety (Vol. 1, pp. 1-36). Elsevier.
Kurnia, S., Choudrie, J., Mahbubur, R.M. and Alzougool, B., 2015. E-commerce technology adoption: A Malaysian grocery SME retail sector study. Journal of Business Research, 68(9), pp.1906-1918.
Magnan, A., 2015. The financialization of agri-food in Canada and Australia: Corporate farmland and farm ownership in the grains and oilseed sector. Journal of Rural Studies, 41, pp.1-12.
McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts, techniques and tools. Princeton university press.
Niven, R.J. and Bardsley, D.K., 2013. Planned retreat as a management response to coastal risk: a case study from the Fleurieu Peninsula, South Australia. Regional Environmental Change, 13(1), pp.193-209.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Wynne, B., 2016. Misunderstood misunderstanding: Social identities and public uptake of science. Public understanding of science.
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