Risk Management Assignment: Identification & Application Of Risk Managing Process For Business

Question

Task: Case Study:
You are to assume the role of a loyal and long-term sales supervisor who manages a fun and energetic sales team of six at a successful family owned stationery and office requirements business. You have a wealth of experience and knowledge in the industry. It is your role to ensure the sales team are actively and successfully seeking new business while maintaining their existing clients and looking for ways on how to improve the services. Most of the customer contact is made over the phone, with one sales representative on the road who visit’s clients.

The sales team reports back to you with this month’s customer feedback. It is obvious there is an enormous growth in mistakes. A number of clients have complained about picking errors or not receiving their deliveries at all. Brian, the Director of the family business, is apprehensive that clients will abandon the company and sales will decline. Both Brian and you know you have to take measures to ameliorate their services.

Risk Management Assignment Task:
You are required to record the processes and steps he/she would take to carry out this task by working through the performance criteria listed for this unit.

You are to supply at least one example of evidence of the ability to:

• relevant legislation, regulations, standards and codes
• relevant workplace documentation and resources
• case studies and, where possible, real situations
• interaction with others

Answer

Introduction
The case study analysed within the risk management assignment shows that a family-run business of stationery and office requirements is well managed by the supervisor managing a sales team of six members. However, the last month's report has shown an alarming trend of poor business performance due to an increased number of customer complaints owing to faulty service provided by the sales team. It will have a negative impact on the future possibilities of getting new business and damage the steady business relationship with the existing clients. The director of the company Brian and the supervisor now have a thorough risk analysis to address this issue to reverse the situation in their favor. The necessary measures of risk management are discussed here in brief.

Risk Identification
The context for Risk Management
The context for risk management depends on the business objective, structure, customer base, business activities, and the operational methods adopted by the business. As a result, the context for risk management of each business enterprise is different and varies from one organization to another (Aulia and Qurtubi, 2019). In the given case study, the risk is of losing business due to poor business performance that might lead to a significant erosion of the existing client base, thereby having a hugely negative impact on the revenue generation model of the family-owned business of stationery and office requirement. As per the case study provided, the context for such a risk assessment aims to address the attitudes of both the group and the individual along with their respective behaviors. Such behaviors might influence how such business risks might occur and how such risks can be addressed as well. Such a context for risk management is based on two different components. One such component is risk appetite, while another is risk attitude (Fragouli, Hutcheon, and Faryna, 2018).

Risk appetite denotes the quantity of risk that any business enterprise is ready to accept for achieving its specific business objectives. It is also very closely linked to the risk-taking ability of the company, which in this case seems to be much nominal in nature. Generally, the business volume of an organization is found to be directly linked to the organization's risk appetite. The bigger the volume of business, the higher is the risk appetite of that business enterprise. On the other hand, risk attitude denotes how an organization responds to risks or uncertainties. It again depends on the perception of the people handling such a business. Such risk attitude is further divided into risk-seeking, risk-neutral, and risk-averse types. Risk seeking denotes the more adventurous kind of business organization that is willing to take out of the turn risks for achieving unprecedented heights in their specific segment of the business. It is a typical feature for most of the big business organizations of the world.
Similarly, risk-neutral business organizations always prefer to play safe, and they are neither in favor of taking risks nor against them. They are happy with their ongoing performance of the business and are not very keen to look for a sudden spike in profitability. Risk-averse business organizations prefer to stay within a safe zone by always having a cautious attitude while planning to respond to any business risk (Kumar, 2021).

Tools for Risk Identification
One of the most appropriate tools for risk identification is the root cause analysis, a very systematic method that can help determine the primary risks rooted in the business. It works with the risk response and the risk preventive aspects of any business. It is based on addressing the cause of the risk, in this case, which has been errors of picking the items or about the failures to deliver the items in time. Once such grassroots level reasons are identified, the action plan can be developed to address these issues (Identifying Tools and Methods for Risk Identification and Assessment in Construction Supply Chain, 2020). The SWOT analysis is another tool for risk identification that can prove very useful in this context. This tool uses a thorough examination of the business's strengths, weaknesses, opportunities, and threats. Proper identification of all these four elements will help in-depth analysis for addressing the issue in the best possible manner (Sheehan, 2019).

Legislation, Policies, and Procedures of Risk Identification
The basic legislation for risk identification always denotes eliminating any risk to the health and safety of the business and the people involved in it. The Australian Consumer Law or ACL related to Unsolicited Consumer Agreement is applicable in this case due to such faults of delivery. Legislations of Unsolicited Consumer Agreement related to cooling off and termination requirements should be referred to sections 76 and 82 of ACL. Even the permitted hours for contacting the customers over the phone are governed by the Telecommunications Act of 1997.
The policies and procedures for proper risk identification denote a set of strictly formal instructions as per the state's legislation, having appropriately documented and should also be sanctioned by the decision-makers, which is Brian, the director, in this case. (Gehandler and Millgård, 2020).

Analysis and Evaluation of Risks
Risk Analysis with Stakeholders
Analyzing and evaluating the risks and the risk factors with the relevant stakeholders of the business is the most authentic way to assess and assess those factors that might negatively impact the business. The two most important internal stakeholders identified in the case study are the promoters, including the director Brian and the supervisor. The sales team of six members is another vital stakeholder of the business. Similarly, the most important external stakeholder, in this case, is the customers. So, while analyzing and evaluating such business risks, it is essential to consider all these different types of stakeholders (Rozell, 2018). Proper analysis and evaluation of the risk would help the organization examine the risks faced by the business. It also helps to make the right decision for countering such problems.

Risk Categorisation
It is a significant activity of risk management. Risks are categorically organized and arranged depending on the origin of such risks, the business areas affected, and other business categories exposed the most to such uncertainties or risks. Risks may be of various kinds like operational risk, credit risk, liquidity risk, or market risk. In this case, the company is mainly facing a market risk. So, risk categorization should also be done, considering that fact. Such risks can also be categorized into internal and external strategic risks (Lee, 2021).

Addressing the performance issues of the sales team is an internal risk in this case whereas, facing customer complaints and losing business is an external risk. The strategies to be adopted for addressing such risks will determine the volume of strategic risk that is going to be involved in this case. Even the level of risk can be evaluated by gauging the propensity of such risk and the probable impact of such risk on the business (Lee, 2018). When risks are categorized based on their likelihood of occurrence, they are considered the highest priority risks. So, determining the level of risk will also be very useful in proper risk management.

Documenting Risk analysis Processes and Outcomes
The documentation of such a risk analysis process in the context of this case study should be done as per the legislations of the ACL. In the case of Unsolicited Consumer Agreements, it is required to provide such documents to the client. Such an agreement document will serve as evidence of such an agreement. It must include all the terms of the agreement in full, mentioning the various considerations as per section 79 (b)(ii), 79(b)(iii), and 79(c)(ii). In the case study context, the company must also provide the clients with documents that would serve as evidence of warranty for any defects as per section 102(1).

Treatment of Risks
Control Measures
Control measures of risk are denoted by those actions that are undertaken to respond to risk factors that have the possibility of causing substantial damage to the organization's business prospects. Such measures of control can be aimed at risk reduction or risk elimination. In most instances, eliminating risk is the preferable act adopted by most organizations. The plus point of risk elimination is that it is a permanent solution as it removes the risk factor permanently and entirely. However, it is not always possible to apply risk elimination measures. In that case, risk reduction becomes the next best risk treatment option. In this case, improving the existing level of service provided to the clients will reduce the risk of losing clients and business to a great extent but would never eliminate the risk. Identification of Risk Control Measures Such risk control measures are to be identified depending on the nature of the risk. The relevance of applying such measures should also be considered while identifying them. Different types of risks would have different risk control measures. So, each such recognized measure should vary from one another depending on the nature of the risk (Matyska, 2021). As discussed earlier, it may not always be possible to identify risk control measures that give a permanent solution. In that case, the next best possible measure of risk control should be identified, aiming to reduce the risk involved.

Relevance of the Risk
In this case, the risk is relevant to the entire organization as it has impacted its people beyond their job responsibilities. Although the sales team has been working as per the established policies and procedures of the organization, the influence of their poor performance can be felt across the entire organization.

Selection and Implementation of Risk Control Measures
The risk control measures, in this case, would be to have better supervision on the regular activities of the sales team so that they can provide a much better service to the customers. Both the director Brian and the supervisor should vigilantly monitor the sales team's performance (Fan and Ruszczy ski, 2018).

Preparation and Implementation of Treatment Plans
Keeping in mind the identified risks, the risk treatment plans should be prepared and implemented accordingly. Only a successful implementation of such methods would ensure that the prepared risk treatment plan will positively impact the business.

Monitor and review effectiveness of risk treatment
Properly monitoring and reviewing the efficacy of such risk treatment plans should be an integrally planned part of the entire risk management process. It involves monitoring and reviewing the risk treatment process very frequently. The effects of such monitoring and reviewing are many. Some of them are as follows.

It helps to frame the necessary changes needed to be adopted in evaluating risks, which would subsequently improve the risk control process. In addition to that, any breaches in the risk treatment process can be identified quickly, and corrective measures can also be taken accordingly. In this case, the sales volume in the subsequent months will show the impact of monitoring and reviewing the effectiveness of the risk treatment adopted here (Herasymenko, 2019). Monitoring and reviewing the area of operation that needs the most attention will always help the business reduce future risks' propensity.

Conclusion
Based on the above discussion, it can be concluded that the importance of the risk management process has been enumerated in the context of the given case study. The different aspects of risk like risk identification, analysis, evaluation, treatment of such risks, and proper and regular monitoring and reviewing of such risk treatment ensure the effectiveness of the risk management measures adopted based on the risk faced by the business.

References
Aulia, R. and Qurtubi, 2019. Hazard Identification, Risk Assessment, and Risk Controlling Using Hazard Identification and Risk Assessment Method. IOP Conference Series: Materials Science and Engineering, 598(1), p.012123. Fan, J. and Ruszczy ski, A., 2018. Process-based risk measures and risk-averse control of discrete-time systems. Mathematical Programming,.
Fragouli, E., Hutcheon, D. and Faryna, J., 2018. Risk Management Strategies and the Role of Social Context: A Comparative Study. Enterprise Risk Management, 4(1), p.1.
Gehandler, J. and Millgård, U., 2020. Principles and Policies for Recycling Decisions and Risk Management. Recycling, 5(3), p.21. Herasymenko, O., 2019. IDENTIFICATION OF KEY RISKS IN MALT ENTERPRISE ACTIVITY: RISK SOURCES, RISK EVENTS, CONTROL MEASURES. Risk management assignment CHERKASY UNIVERSITY BULLETIN: ECONOMICS SCIENCES, (3), pp.134-139. International Journal of Engineering, 2020. Identifying Tools and Methods for Risk Identification and Assessment in Construction Supply Chain. 33(7).

Kumar, S., 2021. Risk Management and Enterprise Risk Management. Academia Letters,. Lee, I., 2021. Cybersecurity: Risk management framework and investment cost analysis. Business Horizons, 64(5), pp.659-671. Lee, W., 2018. Risk Analysis of CDS Structuring and Risk Management Plan. The Korean Academic Association of Business Administration, 31(10), pp.1923-1943.
Matyska, B., 2021. Salience, systemic risk and spectral risk measures as capital requirements. Journal of Economic Dynamics and Control, 125, p.104085.
Rozell, D., 2018. The Ethical Foundations of Risk Analysis. Risk Analysis, 38(8), pp.1529-1533. Sheehan, O., 2019. Frailty Tools are Not Yet Ready for Prime Time in High-Risk Identification. Journal of Hospital Medicine, 14(7), p.450.