Risk Management For PriceBeat: Identifying And Managing Operational Risks

Stages of Risk Management

This is a chain that involves discounted departmental stores situated across Australia. One of these stores is located at Taralgon. The company has undergone significant growth but from the management, it is experiencing a lot of threats in terms of risks in their operations (Wheelen, and Hunger, 2011, p.365).  These risks have great impact on the human resources management the supply chain, the supply chain, financial operations, OHS (occupational safety and health) and issues related to the overall regulatory and legislator context. When a company such as this one is not mindful of these risks, they end up affecting the full operational process of the company such that the company becomes stagnant in terms of development and growth (Trkman, 2010, p. 129). In this case it is important that the PriceBeat Company comes up with a good risk management strategy that will see all the issues that affect its growth solved. The paper is a report that aims at looking into the risk types affecting the company, suggest possible management risks strategies and the way monitoring will be done so that the company stays strong in the market.

The following are the company objectives and goals regarding issues related to risks and management.

• To identify the types of risks and issue that affects the company operations and threatens its growth.
• To come up with good data management model that will help in managing all the company data for easy retrieval and storage(Carroll, and Buchholtz, 2014, p.279).
• To come up with good risk management strategies to solve company issues and avoid risks.
• To come up with good stakeholder management strategy that will bring all stakeholders together and help solve the problems by making firm decisions.
• To design a proper finance management software that will help to manage cash and avoid any loses

At the moment there is no proper coordination of the various stakeholders in the company and this is a critical issue that is affecting the company in terms of operations (Cotton, and Falvey, 2012, p.481). Stakeholders are key elements in the company and when they are not involved in decision making, there are always that arise in the end involving the decisions made by one of the elements without involving the others. In this case the company needs to always call the following stakeholders and involve them in decision making process. These include

The key internal stakeholders include the company management which has the responsibility of identifying issues, seeking and implementing solutions. The staff should help the management in identifying and reporting issues noted (Nicholas, and Steyn, 2017, p. 227). The security detail helps the company with asset protection from issues such as theft. The casual workers and the various departments in the company help set and achieve both short and long term goals and work to achieve them.

These include such people as the suppliers who supply the company with supplies.  The government helps the company with subsidized services and comes up with laws that determine their operations. The environmental sustainability agencies try to ensure that all the company operations are under the sustainable goals of the nation (Kerzner, and Kerzner, 2017, p.749). The labor unions ensure that the OHS and compensation entitled to workers are observed. The customers determine the growth of the company when they seek services and products from the firm. Law enforcement agencies help to ensure that company operations are under the law.   

• The company lacks internal controls that include over cash handling, recording and monitoring
• The company does not comply with the OHS standards, laws on industrial and privacy relations and regulatory and legislative standards required of them
• There are no written policies that include the procedures to guide the workers in executing their daily duties.  
• The company lacks business culture that is professional
• The company does not monitor the business environment especially the external one to get opportunities and other threats that may affect their operations(Trkman, 2010, p. 129).

Strengths The store location was at the corner where the 2 main roads are. This makes an easy access to customers as well as having very ample spaces for parking one thousand cars and above. There is training sessions for managers that are held each month for policies and system updates. There were vary many chances of opening more and more stores in shopping centers that were in the surrounding. These shopping areas include Moonee Ponds Central, Highpoint, Bourke Street Mall as well as Westfield Airport West Shopping Centre. In Taralgon, NBN is rolled out and would give room for effective and efficient utilization of ERP.James was speaking about the store saying that it did not attract large numbers of customers, despite it being easy to be accessed by buses, trams as well as trains.

Banking was not done on a daily basis and very often, 10,000 dollars was kept in cash register in the premises all throughout the night. It was not safe. Employment of an accountant would cost an additional 70,000 dollars every year. There was no full recording of all takings that were from cash register aimed at other purposes that were necessary. Techniques of sales promotion were lacking and the staff was not interested in this activity. Therefore, sales promotion as well as in-store marketing is stopped. The company lacks business culture that is professional

Opportunities There is training sessions for managers that are held each month for policies and system updates. All the procedures as well as policies are usually communicated through verbal means and nothing is specific. Ach staff members does his or her work in a manner that deems fit for him or herself. The company does not monitor the business environment especially the external one to get opportunities and other threats that may affect their operations.

Threats Due to the travels of long distances, the deliveries that are scheduled on the same day in the central warehouse of the company are made impractical. This makes problems in the maintenance of stock as well as inventory. There is a great possibility of break-ins with an explanation that the chances of it happening ware 50 percent and moderate risk. There was no process that was established to deal with injuries which happened during work. The computer containing stores, details of employees as well as financial records had a password that was not protected hence anyone was able to make an access of the information.

 

Stakeholders Involved in Risk Management

Political There were vary many chances of opening more and more stores in shopping centers that were in the surrounding. These shopping areas include Moonee Ponds Central, Highpoint, Bourke Street Mall as well as Westfield Airport West Shopping Centre. A notification that state government is at the moment introducing legislation to back up local by-laws that concerns efficient and effective water usage.	Economic Banking was not done on a daily basis and very often, 10,000 dollars was kept in cash register in the premises all throughout the night. It was not safe. Employment of an accountant would cost an additional 70,000 dollars every year (Tamer, 2009, p.129). Superannuation records as well as wages seemed incomplete having a lot of calculations that were worked out using the total number of hours that were worked then multiplied by a certain set of amount in the hand. The company lacks internal controls that include over cash handling, recording and monitoring	Social There is a great possibility of break-ins with an explanation that the chances of it happening ware 50 percent and moderate risk. The adjoining buildings were very old and not attractive to the eye. Some of the side walls were unstable and even broken. The owners had a plan of knocking them down anytime. The company lacks business culture that is professional Obviously, Taralgon was a place for those who retired and at the same time, population was becoming large.
Technology The computer containing stores, details of employees as well as financial records had a password that was not protected hence anyone was able to make an access of the information. There are long standing demands in self-scan check-outs to allow resource savings and make customers to do quick check-out and pay without problems. In Taralgon, NBN is rolled out and would give room for effective and efficient utilization of ERP.	Legal There were vary many chances of opening more and more stores in shopping centers that were in the surrounding. These shopping areas include Moonee Ponds Central, Highpoint, Bourke Street Mall as well as Westfield Airport West Shopping Centre. Lack of policies to regulate business operations A set of regulatory as well as legislative requirements that is complete. The company does not comply with the OHS standards, laws on industrial and privacy relations and regulatory and legislative standards required of them	Environment There is unnecessary running in lighting systems as well as cooling plants when it is not needed. All toilets used only one flushing system. About 7,500 dollars were needed to upgrade the flashing system to a dual flush. The cooling plant lacks water efficiency and also needs additional 6,000 dollars so as to do revamping. Currently, the store makes use of 41500 liters in a week (Kumar, and Van Hillegersberg, 2009, p.67). The company does not monitor the business environment especially the external one to get opportunities and other threats that may affect their operations.

 

Type of risk	Level (medium -M, low-L, high-H, extreme-E	Consequence and area affected	Treatment	Risk prioritization	Stakeholders and monitoring process	Communication strategy
Deaths and accidents may occur from construction site, fall of adjoining buildings	M	Effect on HRM and thus affect production of the company. Operations may come to stand still	Include work safety measures and equipment to workers. Liaise with neighbors to repair buildings	High priority should be given	Construction site management needs to implement safety measures.  Neighboring building owners	Site meetings, lectures and circulars
Huge spending from extended meetings, uncontrolled cooling and lighting systems	E	Affects the company profits due to losses over expenditures	Hold brief meetings and Avoid extra spending. Install dual flush systems to control water use. Switch off lighting systems when not in use. Renovate the cooling plant	High priority	The management, accounting department need to regulate expenditure Plumbers need fix the water equipment	Use memos, emails, circulars and telephone calls to communicate issues
Data loss	H	Company will not be able to know or account for growth or developments	Install data storage software in their computer systems	High priority	The IT personnel need to help install and monitor software in the systems	Emails, memos, meetings or circulars, telephone calls
Delayed services to customers	M	Affects customers.  Time wastage and leads to low or no customer loyalty. Reduced profits	Install new ERP system that is large and speedy enough to manage payments and customer data	High priority needed	The accounting personnel to install and monitor payment system. IT personnel help integrate ERP	Emails, Memos, business letters
Low staff productivity	M	Affects how workers operate. Misbehavior could cause losses, low turn-up and output	Come up with company policy and laws to regulate operations among staff	High priority	The HRM needs to see how workers should be monitored and work productivity	Meetings, lectures, circulars, policy documents, sign-boards
Reduced customers	L	Reduced sales and profits	Doing store face lifting to make it attractive. Include sales promotion techniques	Medium priority	The sales department, accounts department	Emails, memos, letters
Physical theft and break-ins	H	Money and asset losses	Banking cash every day. Install security personnel and surveillance systems	High priority	Security and IT personnel.  The HRM department and accounts office	Emails, memos, telephone calls, letters
Unrecorded takings	L	Money loss	Do record all takings	Low	Accounts personnel	Emails, memos, letters
Delayed treatment	E	Death or physical body damages	Have internal emergency department	Low	Emergency department, accounts department and staff	Emails, memos, letters
Cyber security risk	E	Loss of company and customer data	Install passwords to computer systems	High	IT personnel, staff, customers	Memos, letters and emails
Disregard legislator and regulatory policies	M	Loss of business license and permanent closure	Observe all the various regulatory policies and laws	High	The management, the government, law enforcement agencies	The constitution, business control law and licensing  documents

To solve the various risks the company can decide to identify and follow the above procedure that helps set goals and objectives, identify risks, then undergo a treatment process and finally monitor and audit (Hammer, M., 2015, p.9).

The company needs to carry out and apply the A-CAT risk management strategy as below; 

Question 1: Select the best option which defines the term RISK.

1. a) The possibility that an actual outcome is in line with the expected outcome(Wu, and Olson, 2009, p.367).

Question 2: Select the best option which defines the following:

 Risk Management

1. a) The systematic application of management policies, practices and procedures to the task of identifying, analyzing, assessing, treating and monitoring risk(Power, 2009, p. 851).

Code of Practice

1. d) Enforceable by Law – Effects individuals. May include specifics such as OHS, EEO,  anti-discrimination laws, etc.

Legislation

1. b) Breaches may result in illness, injury, death and prosecution

Advisory Standards

1. c) Can’t be charged on them but can be used as evidence.

Question 3: Select which of the following are NOT the principles of risk management:

1. a) Premises; Product (or service); Purchasing; People(Sadgrove, 2016, p.31). 

Question 4: Which of the following is not the ways you can alert people to potential hazards and risks in the workplace

1. d) None of the above

Question 5:  When determining the level of risk within an organization, where would you NOT gather your information from?

1. b) Operational Plan and Inventory Management

Question 6: Which of the following is NOT the option for maintaining the currency of information to interest people in OH&S legislation?

1. a) To check background of staff

Question 7: A strategy that could be used to ensure participatory arrangements are established and maintained with employees and their representatives within a small business; Be sure to include how you would document this process and make the information available to all employees to ensure you meet legislative requirements. Choose the inappropriate answer.

1. a) Ensure all risk management discussions are documented including at induction and position descriptions(Uhl, and Gollenia, 2016, p. 153).

Question 8: You are to detail how you would identify an intervention point for expert hazard and risk advice. Be sure to provide examples of when you would seek expert advice, and who you would contact to receive such advice. Choose the inappropriate answer.

1. d) Elimination; Substitution and Isolation.

Question 9: Below is the Outline the Hierarchy of Control; Match the following which correctly explains how it affects the suggested control measures

Elimination

1. c) If you eliminate a hazard you completely eliminate the associated risk.

Substitution

1. e) You can substitute something else (a substance or a process) that has less potential to cause injury.

Isolation/engineering

1. d) You can make a structural change to the work environment or work process to interrupt the path between the worker and the risk.

Administrative

1. b) You may be able to reduce risk by upgrading training, changing rosters or other administrative actions.

Personal protective equipment

1. a) When you can’t reduce the risk of injury in any other way, use personal protective equipment (gloves, goggles, etc.) as a last resort.

Question 10: Select the best option which describes AS/NZS ISO 31000:2009 Risk Management – Principles and Guidelines

1. a) This standard provides a generic guide to managing risk and specifies the elements of the risk management process.

Question 11: Match the following with their respective explanations:

Duty of Care

1. b) The legal obligation to have thought or regard for those who may be affected by one’s acts or omissions.

Company Law

1. c) Legislation set up to govern how companies must be run, enforceable by the ASIC and the Australian Court System (Corporations Act 2001) (Commonwealth Authorities and Companies Act 1997) (Corporations Regulations 2001)

Contract Law

1. a) Contract law is based on the principle expressed in the Latin phrase pactasuntservanda (pacts must be kept); and is based regulating enforceable agreements (contracts)

Question 12: Match the following with their respective explanations:

Environmental Law

1. b) Legislation set up to protect the environment (i.e. – disposal of chemicals or waste, impact on environment, etc) (Environment Protection and Biodiversity Conservation Act 1999)

Disability Legislation

1. d) The main Commonwealth legislation covering the rights of people with a disability is the Disability Discrimination Act 1992 and the main Commonwealth body that is charged with protecting the rights of disabled people and advocating on their behalf is the Human Rights and Equal Opportunity Commission (HREOC).

Industrial relations law

1. a) The laws governing the relationships between employees, working groups, unions, managers, employers and employer associations, and the intervention into these relationships by government (Industrial Relations Act 1988)

Freedom of Information

1. c) Where members of the public are allowed access to documents held by government agencies at the federal, state and local levels. Also known as FOI (Privacy Act 1988 and the Freedom of Information Act 1982)

Question 13: Which of the following is NOT a relevant risk insurances?

1. d) None of the above

References

Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management, 15(5), pp.273-281. Nelson Education. 

Cotton, D. and Falvey, D., 2012. Market Leader Upper Intermediate: Business English Course Book. Pearson education. An International Journal 16, no. 6: 474-483.

Hammer, M., 2015. What is business process management?. In Handbook on business process management 1 (pp. 3-16). Springer, Berlin, Heidelberg.

Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to planning, scheduling, and controlling.International journal of project management, 25(8), pp.745-752. John Wiley & Sons.

Kumar, K. and Van Hillegersberg, J., 2009. Why an ERP for IT. Business Process Reengineering with Object Technology. Vol. 103: pp. 37-89. ACM Press. Addison-Wesley, New York.

Nicholas, J.M. and Steyn, H., 2017. Project management for engineering, business and technology. International Journal of Project Management 17, no. 4 (1999): 223-235. Routledge.

Power, M., 2009. The risk management of nothing. Accounting, organizations and society, 34(6-7), pp.849-855.

Sadgrove, K., 2016. The complete guide to business risk management. Journal of management 24, no. 1: 21-42. Routledge.

Tamer, C., 2009. International business: Strategy, management, and the new realities. International Journal of Production Economics, 90(1), pp.47-58. Pearson Education India.

Trkman, P., 2010. The critical success factors of business process management. International journal of information management, 30(2), pp.125-134.

Uhl, A. and Gollenia, L.A. eds., 2016. Business transformation management methodology.  Business Strategy and the Environment, 17(3), pp.149-159.Routledge.

Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business policy. International journal of physical distribution & logistics management, 34(5), pp.434-456. Pearson Education India.

Wu, D.D. and Olson, D.L., 2009. Enterprise risk management: small business scorecard analysis. Production Planning and Control, 20(4), pp.362-369.