Activity 2 Question 1 a
a). Risk can be described as a chance you take, and it has an impact of it.
b). Risk management can be described as a guideline which we need to follow or manage to control the effect.
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c). Risk appetite can be described as a amount of risk we are willing to take.
d). Risk capacity can be described as how much impact to survive.
Risk management policies and procedures should be periodically reviewed because we need to maintain the laws and changes which are launched, and we also need to update latest laws to meet the circumstances. Moreover, we also need to follow the rules and need to reduce the impact from it. We also need to maintain the ISO standard to meet the criteria. When any organisation review their risk management policies and procedure then they have some opportunities to decide whether they can align to the current risk or else the new risk would appear and the existing risk would be exposed.
An organisation stakeholder are: –
These people are especially how are been hired in the organisation for the non-executive level for the wages and salary and they would have some effect of the risk.
These are the people who have been invested their share and capital in the organisation for their interest.
3). Middle and senior management
These are the people who mostly have an interest in doing management in the organisation and also, they are interested in their job safety, prospects and pay.
These are the people who generally try to run their business on behalf of shareholders.
Particularly the people who collect the taxes for the business and also try to routine them.
6). Banks or financiers
Here other business try to offer money in other financial organisation
These are the people who get their service goods at a regular interval as well as they are benefited from that.
Here the organisation try to operates their business work within civilization
The organisation where the surrounding is good and has a good situation to run the business and whereby the location has a good environment.
The reason why their issues should be identified are because we can know what is carried out in the organisation. Moreover, each and every stakeholders has different types of issues and some would even have different viewpoint of the risk. When an organisation try to help the stakeholder issues then it would also help the organisation to solve their issue when they arise. Even stakeholder need to look at the risk management plan even thought they would be very close to the risk to fix the issue so that they may not face in the upcoming risk management plan.
It is necessary to review existing risk management arrangements and standards because due to the changes in the laws and regulation we also need to set the current standard and arrangement so that we would be current and legal according to laws and rules which are published. Moreover, risk would also change and would also have less changes to survive. We also need to conduct regular meeting or survey so that we are up to date with the current standards and arrangement. However, we have to make sure that these laws and standards are lined with the ISO risk management advice and standard.
The danger of attempting to manage risks without properly researching them the organisation would not be able to manage any kind of the risk which would occur and moreover, it would also suffer possible consequences from the unidentified risk.
The 12 aspects of risk that might contribute to new research processes are: –
Unexpected success or failure
Increase or decrease in profit
High loss of staff
The benefit of plotting business on a risk matrix would allow us to prioritise risk and would also be able to identify the risk which would be more likely to be affected and most likely to be occurred very fast. This would also help the risk management strategies to develop more in the business and also implement some protection that would be helpful in some vital areas where the risk is high. Moreover, while we conduct such type of risk it would also avoid some major emergency and we will be able to handled all type of situation in a easy way without any disturbance.
The four questions that might be asked when assessing and prioritising risks are: –
Where we can take more precisions?
Where we can take less precisions?
How much the impact would be likely to have?
What could be the percentage for the impact to occur?
Categorizing risk help:
Identify long and short-term risk control
Budget must be approved by the stakeholders
Action also need to be prioritised
You also need to make some risk vs cost decisions.
The six factors that might contribute to financial risk are: –
Risk Treatment can be described as the process of selecting and implementing of measures to modify the risk. Risk treatment measures would also include avoiding, optimizing, transferring or retaining risk.
The categories of risk treatment options that could be applied are: –
Avoid the risk – you must be very careful while selecting the activity so that we may not create any kind of the risk in it.
Prevention – while we are working in any organisation we must not allow to occur any risk while we carry out anything.
Contract the insurance – we also need to inform the insurer about the risk so that they are aware of it.
Reduction – here we must take some action while we are working so that the risk can be manageable at the certain stages.
Risk can be accepted any time due to the following reasons. They are: –
We need to launch a new product in the market
We also need to hire some new COE
In some cases, we can see that the risk is such a type that there cannot be any kind of action available.
We also can see that in some organisation the level of the risk could be very low but there cannot be any result to fix it out.
We can see that if the insurance is not a real risk control then it is inactive. Moreover, the business would also handover the risk from the organisation so that they may not face any financial loss. We can also look that the risk cannot provide any kind of the protection for the organisation but also cannot be able to control or handover.
An action plan would contain the information about a chartered statement and moreover it would also contain at what time it is required to be completed and what type of source it need to be written. An action plan also need to have some time frame as well as the target so that they can be able to achieve the target within the given time period. In the action plan they also inform every person position what work they need to do.
The plan should be communicated to all the employers or accountant who are working for the organisation and the people who are responsible for that. The communication procedure would be effective by call the meeting and we also need to train them so that they are able to work with confident. Moreover, we also need to give them the hard copy as well as the soft copy so that they are aware what are we going to discuss in the meeting. We also need to tell them to sign the document with the protocol and send them the document out to the members who have sign the contract and hence then we need to prepare the notice.
Risk management data and plans be documented and appropriately stored because we need to check whether the risk management process has been conducted properly or not. Moreover, we also need to continuously observe and reviewed the risk management so that they are in link. It would also help to support the risk prioritising. When we stored every plan and data carefully then we can see in the future if we want and we also can develop a good audit and plan. We also need to support the organisation strategies plan. Hence, we can support the communication as well as distribution of the risk management strategies with the stakeholders.
Action plan must be monitored and evaluated so that we can know whether the evidence is working or not or else is there any kind of difficulty in it. Moreover, they also need to be monitored so that we are aware that they should go for the short term or long-term operation. We must also ensure that they are acting to moderate the and check whether they stop the business trouble. It also helps to identify the contingency plan. The things that come under scrutiny would be what type of data are you collecting and need to be formatted. Moreover, you also need to check which people would be responsible to collect the data. The data which is collected need to be ensure that they are real and effective. They also need to check which people need to see the result which has been decided from the collected data. They also need to plan the data how to organise, analysed and evaluated. Hence, monitoring and evaluating the data would also be helpful to the manager to review the success of the action plan, strategies and management system. It will also help to identify the problem which are there in the data and also help to fix the change in the action plan.
The people who are involved in the evaluation of the risk management strategies are the auditors, owners, directors, COEs etc. Moreover, these people could be internal auditor or external auditors. It is also functional to use external or independent auditors to return the investment.
The three advantages of using external auditors are: –
They would have good skill, knowledge and experience in that field.
External auditors are trustworthy employee compared to internal auditors.
They can accurately assess the effectiveness of the processes as they are not too close to them
Support for risk management policies and procedures would be encouraged if there are conducting a meeting with those people who are part of it or else the people who are most likely to be caused effect by the risk or risk management system. However, these all people also need to know all the procedure which they need to follow in the risk management system and also they need to identify all types of risk and the consequences which would be able to receive from the risk assessment.
Support could also be obtained through looking at the organisation recent strategy which would allow to assess with the goals and achievement. Moreover, the organisation also need to conduct the meeting with the employees and show them the communication plan and try to keep control on them and meanwhile try to connect with some experience stakeholders. The organisation also need to include some feedback wherever it is necessary. They also need to check some document so that they are aware and kept ready and they have the record for the risk management plan and also they need to organise a contingency plan if an emergency occurs. The organisation also need to get some approval for the risk management as well as contingency plan because they need to check whether they are properly conducted.
Risk management plans are necessary because we would be aware of the goals and what types of roles we need to conduct and what tasks need to be taken and we also need to check whether the identification is clear for the expectation and standards. Risk management plan would also gives us a identified risk which would be able to choose a strategies. Moreover, it also contain all the information which are related to the identify risk, chosen strategies, level of the risk, time frame also need to be implemented so that we can easily achieve the strategies which are planned out, what type of resources are required etc. However, planning also need to be described so that we can be able to process with the identified risk and an organisation would also be able to take certain steps when and how to take so that they can be able to achieved the target which is set. The following are the importance of the risk management plans are you also need to ensure that the plans are enable so that you can be able to design the work and can also be able to develop some controls where it is necessary. Where there are no controls activity carried out we will not be able to achieve the targeted goals which are set. However, planning would also decrease the uncertainty by helping the staff for the anticipate and would also help them to manage the internal and external risk factors.
Nautilus Boats Hire operates a small business and gives boats on hire. They need to ensure that they includes some requirement which are necessary for the risk management. They are goals, objectives and strategies.
The goals that need to be included in the risk management system are they need to check whether all the resources are safely kept in the houseboats and meanwhile they need to check they do not damage any other vehicles as well as any landscape issues. They also need to check that all the swimmer in the houseboats have the safety guards and especially check the children’s who may drown by having the swimming attendants. They also need to check whether they have 0% insurance with them. They also need to check scuba divers whether they work properly. Moreover, all the boats need to have canvas such as umbrella so that they do not burn their skin from direct sunlight or dehydrated especially form the sunny days.
All the houseboats which has been hired from the Nautilus need to have safety jacks and also they need to hire a person who is expert in this types of activity so that they can guide the tour and even they can control the houseboats to avoid damage to them. All the people who are travelling in the tour need to be train so that they are safe. Another objective would also be that they retain their current customer or visitor while they are looking forward for more customer to come an hire the houseboats.
Nautilus boat hire will try to give them all the information which is necessary to take any kind of the action from their visitors while the hire the houseboats because they could be aware of the policies and procedure. They also need to arrange each and every things and try to organise for the trainer. Do 100% check safety and try to print posters and checklist.
To identify the risk management scope firstly we need to look at the cases which are worst scenario to find out the term of possibility and probability. Moreover, we also need to determine the scope within the context of the organisation objectives. There are few steps which need to be taken care while we are identifying the risk management scope that would be we need to establish the context of the organisation which would include the defining goals as well as the objectives of the organisation for the well risk integrity assessment. However we also need to consider the division and large number of the policies and procedure that would have an impact on the staff. Although the staff is more they need to regulate the risk management plans should be necessary so that they can try to avoid some issue which would threaten the business. As we can see that the company is a geographically spread around different states and territory they need to take into account about the risk management scope. While the organisation is determining the scope they need to look from where the risk would most likely to be affected and from where the risk would involve and they also need to identify what are the context of the risk and how much the risk would impact on it. The organisation has to make some calculations regarding the risk how will it occur and what will be the consequences from it. For example, the risk which are possible to occur are natural disaster, economic downturn etc. Hence, when we are identifying the risk management scope it would be necessary to look at the what are the type of risk and what are the context of it. They are specific project, area, financial management, health and safety, relationships, human behaviour, legislation, natural events and technology. Lastly, while you are determining the scope you need to check whether the risk management plan is working against the area where we have been targeting and the resources which are used give the most effective to achieve the desire goals which are set and we get better outcomes.
Political dangers are constantly identified with administrative and administrative changes, political turmoil, and change of government, defilement and legally binding issues in either home nations or nation where association markets or from which imports. It may likewise identify with environmental change activity, business issues, government obligation, exchange understandings, interest in war and so on. Associations have no immediate controls over these political dangers when they happen, however the association ought to be completely educated of what’s going on the planet particularly for outside political dangers so as to know on the most proficient method to go about. For interior political dangers in the association, this can be illuminated or overseen for instance through rebuilding of association administration. They can anyway guarantee that they are completely educated of what is occurring on the planet and that they utilize appropriate for guaging methods to recognized potential dangers. They would then be able to make a move to cradle the association against predictable dangers. Inside governmental issues, for example, administration control put, building storehouses or domains inside the associations, abnormal amounts of the staff disappointment, the requirement for rebuilding and so forth can likewise go under the heading of political hazard to be audited, comprehended and overseen.
Economic matters variables will influence all kind of business. At the point when there is a financial downturn/emergency or retreat sources of info, yields and benefits can be extremely affected and associations that work in a region of high optional spending will be top priority. For instance, when the economy is blasting individuals will spend on extravagance things, for example, autos, occasions and eatery suppers. An association could sensibly offer/broaden items and administrations as there is okay of misfortune. In the midst of financial downturn, a reasonable hazard administration procedure is decrease the quantity of top of the line offering and spotlight on essential things.
By and large, business presented to the effects of a monetary downturn will first experience change in their exchanging action. Which will influence their business figures and income. This can be party in light of lower purchaser certainty because of limited access to shopper credit, and occupation flimsiness including higher joblessness. Thus, this decrease in income will affect on the budgetary position of the business in various ways, including gainfulness and income.
Social dangers can identify with changes in the aggregate market or particularly to the association target advertise attributes, profiles, needs and needs. Normal natural outputs, statistical surveying movement and client profiling should point to patterns.
Patterns can identify with the entire of the general public inside which the association works or only a select target gathering and can incorporate changes to:
•The acquiring practices and buying interests of clients and customer inside certain statistic or psychographic gatherings, eg the expansion in online buys from abroad provider and retailers
•Societal desire and qualities
•The needs and desire for clients as far as what they buy, why they will buy and the amount they will pay
•Customer view of value
Enactment, rules or codes of training that administer industry divisions would all be able to affect on the manners by which an association works. Enactment can likewise affect on the items/benefits that can be offered to clients/purchaser and to the manners by which they are re-advertised. Legitimate, administrative and moral prerequisite can extend from guaranteeing condition consistence and utilizing or offering item that don’t misuse abroad laborer to the failure to offer or import denied things.
They can identify with:
•Marketing and advancement
•Ethical business desire
•Methods of executing business
•Import and fare enactment
•Health and wellbeing enactment
Technology can be a high-chance territory. Technology its utilization and application are continually changing and advancing
Hazard factors with respect to authoritative utilize include:
•Security of documents or data frameworks and procedures
•Reliability and support related with electronic correspondence gear
•Inability to stay aware of changes cost appropriate to staying aware of changes
•Training and use prerequisite
•The needs to utilize innovation to stay aware of and outpace contenders to be early adopters and stay on the bleeding edge of patterns
•Applying innovation to diminish manual treatment of items improvement
•Make beyond any doubt that the association has a suitable online nearness whether they offer on the web or not.
Brainstorming is to discuss topic which is related to idea in brief like main topic then we are do that idea in more detail. First thought of topic is brain storming for example. You have a topic about Education then your first idea is like Types of education which may lead to level of education such as primary and secondary education. This all step by step process is call brain storming. It shows first information which you discuss in further in more detail.
Scenario analysis is a one type of process which allow us to analyse all types of possible future events for the economy and also it would help to attempt to the calculation for the financial market return for each and every scenario. Moreover, it would also determine further for the link and assign so that they can be able to check the probabilities for the scenario. It would also try to fix the position for the assets to be distributed among all various types of assets so that they have an equal opportunity to maximise its return. Hence, it would also be very difficult to manage the future holds because we do not no what could be the actual outcomes and also the outcome could be unexpected.
Summative assessment 1
The one primary purpose of current risk management standard in Australia: AS/NZS ISO 31000:2009 Risk Management Standard are these standards would establish a number of principals that would allow to recommend the organisation should have a framework overall strategy.
The 11 key principles of the current risk management standards in Australia are: –
Creation and security value
Facilitate continual of organisation
Manage steady and careful process
Components like human and social design
Involve in casual process
Adjust to changes
Assist to control changes
Organizing data arrangement
Shareholder and financial are the key legislative and regulatory areas must Adidas management consider when developing and implementing their Group Risk Management Policy
Risk and opportunities in adidas can be described as the constantly developing and exploring to sustain more earning and increase shareholders value.
In Report 6 Adidas summarise the most important of these risks and opportunities.
In Report 6 there are three main categories where Adidas management consider risk.
The primary purpose of the Adidas organisational policies, procedures and processes for risk management are facilitate the effect of risk and opportunity, management, evaluation, monitoring, handling and reporting.
The policies and procedures designed by Adidas to facilitate effective risk and opportunity management is held in integrated business system
The key objective of this system is to outline the business to accept in an open door.
Adidas management make available to employees the Group Risk Management Policy by online.
The key purpose of the Group Risk Management Policy is to outline the principle tools where the risk area and key responsibilities are communication with timelines reporting.
By referring to the Adidas Risk and Opportunity Report 2017, fair fax is the key feature of system policies where they refer.