Diploma of Business Risk Management

This document provides an overview of risk management in the Diploma of Business course. It covers examples of risk, key steps of the risk management process, components of risk management, sources of information, components of a PESTLE analysis, stakeholders and methods, risk criteria, tools, difference between qualitative and quantitative risk analysis, risk treatment, cost-benefit analysis, items documented in a risk management plan, and the importance of continual reviewing of the risk management plan. The document also includes a case study and a risk management action plan.

DIPLOMA OF BUSINESS
Diploma of Business 0

Diploma of Business 1
Table of Contents
Assessment 1:..................................................................................................................................6
1. Examples of risk......................................................................................................................6
Operational risks......................................................................................................................6
Strategic risks...........................................................................................................................6
External risks...........................................................................................................................6
2. Key steps of the risk management process..............................................................................6
Identification of risk................................................................................................................6
Methods of risk analysis..........................................................................................................6
Identify risk triggers................................................................................................................6
Risk resolution ideas................................................................................................................6
Action plan to risk resolution..................................................................................................7
Accountability and responsibility............................................................................................7
3. Components of risk management............................................................................................7
4. Sources of information............................................................................................................7
5. Components of a PESTLE analysis.........................................................................................7
Political factors........................................................................................................................7
Economic.................................................................................................................................7
Social.......................................................................................................................................8
Technological..........................................................................................................................8

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Legal........................................................................................................................................8
Environment............................................................................................................................8
6. Stakeholders and methods.......................................................................................................8
Stakeholders.............................................................................................................................8
Methods to identify internal stakeholders................................................................................8
Methods to identify external stakeholders...............................................................................8
7. Risk criteria..............................................................................................................................9
8. Continual communication is critical........................................................................................9
Build and maintain trust...........................................................................................................9
Appropriate language...............................................................................................................9
Clear and transparent...............................................................................................................9
9. Tools........................................................................................................................................9
Risk probability and impact assessment..................................................................................9
Probability and impact matrix.................................................................................................9
Risk urgency assessment.......................................................................................................10
Expert judgment.....................................................................................................................10
Categorization of risk............................................................................................................10
10. Components.........................................................................................................................10
11. Difference between Qualitative risk analysis and Quantitive risk analysis.........................10
Qualitative risk analysis.........................................................................................................10

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Quantitative risk analysis.......................................................................................................10
12. Consequence table...............................................................................................................11
13. Risk treatment......................................................................................................................11
Avoidance..............................................................................................................................11
Reduction...............................................................................................................................11
Transfer..................................................................................................................................11
Acceptance.............................................................................................................................11
Sharing...................................................................................................................................11
14. Cost-benefit analysis............................................................................................................11
15. Factors..................................................................................................................................11
16. Items documented in a risk management plan.....................................................................12
Process...................................................................................................................................12
Budget....................................................................................................................................12
Roles and responsibilities......................................................................................................12
Reporting structure................................................................................................................12
Risk categories.......................................................................................................................12
17. Importance to ensure continual reviewing of the risk management plan............................12
Meet deadlines and maximizes results..................................................................................12
Evaluates the entire project....................................................................................................12
18. Mechanisms.........................................................................................................................12

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19. Legislation...........................................................................................................................12
Codes of practice and national standards...............................................................................12
20. Risk management standards................................................................................................14
Assessment 2 – Case Study - Part 1...............................................................................................15
Description of the organization.................................................................................................15
Goals..........................................................................................................................................15
Analysis of external factors.......................................................................................................15
Critical Success Factors.............................................................................................................15
Identification and analysis of external factors...........................................................................16
Identification of stakeholders....................................................................................................16
PESTL Analysis.........................................................................................................................16
Political factors......................................................................................................................16
Economic factors...................................................................................................................16
Social factors.........................................................................................................................16
Technological factors.............................................................................................................16
Legal factors..........................................................................................................................16
Economic Factors..................................................................................................................17
SWOT Analysis.........................................................................................................................17
Risk Assessment Table..............................................................................................................17
Agenda, Discussion, Issues........................................................................................................18

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Risk Management Table............................................................................................................18
Actions Plan...............................................................................................................................19
Strategy for implementation of the risk management plan........................................................19
Risks acknowledged for the organization..................................................................................19
Human Resources Risk..........................................................................................................19
Legal/Contractual Risks.........................................................................................................19
Promotion / Public relation related Threats...........................................................................20
Report on risk management action plan....................................................................................20
Action plan process....................................................................................................................21
List of sources of information and supporting documents........................................................21
Monitoring & Reviewing Mechanism...................................................................................21
Recording Methods................................................................................................................22
Review Mechanism...............................................................................................................22
References......................................................................................................................................23

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Assessment 1:
1. Examples of the risk
Operational risks
Accounting errors and data entry errors.
Strategic risks
Project risk and program risk.
External risks
Competitors and pricing pressure.
2. Key steps of the risk management process
Identification of risk
This is the principal step in a script the entire design to identify, accumulate all stakeholders for
completely probable project threats. This is complete by any information of the plan, by many
sections, and design documents (Ponting, 2014).
Methods of risk analysis
Every project of the organization faced with risks. The risk is to identify and analyze by their
impact and probability using the PI matrix. Quantitive and qualitative are methods to analyze the
risk (Kielmas, 2018).
Identify risk triggers
Risk management planning team divided into assign segments and subgroups of the main list of
risk to each subgroup (Gill, 2011).
Risk resolution ideas
The sub-team file preventive activities for threat, identify for the enhancement actions and
identify the opportunities.
Risk is unidentified actions that are fundamentally neutral. These are positive and negative. The
organization should appear at chances to advantage from opportunities to existent them (Holder,
2015).

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Action plan to risk resolution
The manager of a project decides a strategy of an act to fetch risk resolution. The risk with P-I
value preserved with the greatest insistence with impact or least prospect for a monitored real
plan of action. The most serious risk at the start of the scheme saves resources, cost, and time
with the documentation of trigger and the plan of resolution.
Accountability and responsibility
Members of the team, various teams, and chart allocated accountability for booming out the
plans of risk resolution. The manager of the project is responsible for all the actions and plans
related to the project and risks at large level (Paladin, 2012).
3. Components of risk management
Global investment risk and business failure risk.
4. Sources of information
Primary, secondary, and tertiary sources.
5. Components of a PESTLE analysis
PESTLE is a tool or framework used to monitor and analyze the macro-environment dynamics
that have an effect on the performance of an organization (Watson, 2011).
Political factors
This factor determines that the government influences the economy or a certain industry.
Political dynamics comprise trade tariffs, fiscal policy, and tax policies. The government
imposes a new duty and tax to which whole revenue making structures of the organization might
change. Labor law of the organization assesses the attractiveness of a potential market (Brink,
2019).
Economic
These determine the economic performance of the organization that affects and have muffled
long-term effects. A rise in the rate of inflation affects organization services and products. The
power of purchase of a customer affected by the organization models of supply for that economy.

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Social
These features scrutinize the communal environment of the marketplace and gauge the
determination likes population analytics, age distribution, demographics, and trends of culture. In
the holiday season in India, there is a high demand for western dresses.
Technological
Operations of the organization are favorable or unfavorable are pertain by the innovation in
technology. This refers to development and research, automation and the technological
awareness of an organization market possess.
Legal
This factor has both internal and external sides. An environment of business is affected by
certain policies. For example standards of safety, consumer laws, and labor laws, etc.
Environment
This factor includes influences that determined by the surrounding environment. These include
climate, geographical location, and environmental offsets.
6. Stakeholders and methods
Stakeholders
A stakeholder is a party that has noticed in the organization and can be affected or affects the
organization. Stakeholders of the organization are communities, unions, suppliers, owners,
government, employees, directors, and creditors (Stake, 2014).
Methods to identify internal stakeholders
Internal stakeholders are important to perceived success within the organization. It is often
adjudged by the apparent fulfillment of internal stakeholders.
Internal stakeholders identify by a chart of the organization and by the level of the project of the
organization.
By going through the phases of the project and list out the teams and people involved in phase
(Reed, 2015).
Methods to identify external stakeholders
External stakeholders not directly involved in the operations of the organization.

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Financial website of business helps to identify the external stakeholders.
Australia stock exchange also represents the business external stakeholders (Calker, 2017).
7. Risk criteria
Criteria of risk identify the significance of well integrity risk. This is set by combining and
considering consequences. Criteria of risk assigned by the combination of risk and single risk.
8. Continual communication is critical
Communication risk is an integral portion of the risk valuation procedure for an organization.
This includes communication between organizations and agencies. This process is designed for
assessing and managing the risk (Klee, 2012).
Build and maintain trust
Maintaining consistency while communicating is necessary for the business but not harming to
the accuracy. If new information is not consistent, that need to acknowledge the change or
previous mistakes and explain the situation as it stands.
Appropriate language
Considering the audience is the most important part of providing surety about the language and
type of communication. The leads of the organization for desired outcomes and actions must
convey information.
Clear and transparent
Communicating in a direct way means clarity with simple, direct, and understandable way.
Transparency presents assumptions, uncertainties, and methodologies.
9. Tools
Risk probability and impact assessment
Examining each threat will arise and the possible effect on the objective of a plan like
performance, quality, cost, schedule, describing it in heights, through assembly and through
interviewer or documenting the results and meeting with the stakeholders.
Probability and impact matrix
Rating the risk for additional Quantitive examination using an impact matrix, the probability
should be specified by the business in advance.

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Risk urgency assessment
In this analysis, the assessment of risk insistence joint with the risk ranking indomitable from
impact matrix and probability.
Expert judgment
Individual involvement with a similar scheme in the not else reserved past may use decision
through risk or meetings facilitation workshops.
Categorization of risk
To determine the parts of the scheme exposed to the effects of vagueness. This can help to
improve an effective response of risk.
10. Components
Global investment risk
Financial market risk
Business failure risk
Inflation risk
Interest rate risk
11. Difference between Qualitative risk analysis and Quantitive risk analysis
Qualitative risk analysis
In this, a pre-defined rating gauge used to ascertain the threat of the plan. The score of risk based
on the likelihood or the impact on objectives and probability of occurring of the project. This is
ranked on a zero to one gauge. The scale of influence is organizationally defined. This includes
the appropriate categorization either this includes the risks, effect-based or source based (Yazar,
2012).
Quantitative risk analysis
This is an exploration of the maximum priority risks with a Quantitive or numerical rating with
an order to improve a probabilistic analysis.
Quantifies the possible outcomes to achieve specific objectives of the project.
Provides the approach for decision making in uncertainty.

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Creates achievable cost and realistic, scope targets or schedule (Finney, 2013).
12. Consequence table
These levels describe the level of frequency values or make easy for a person to exploit a threat.
It is easier to think in the form of probability value and frequency. This relates to ease misuse or
mistake or to motivate for performing a malicious action.
13. Risk treatment
Avoidance
This helps to avoid the factors of the risk to perform better
Reduction
This helps to take mitigation actions to reduce risk.
Transfer
All the portion of the risk can be transferred to the third party. Types of transmission are
outsourcing and insurance.
Acceptance
This is known as risk retaining. This is hard to appreciate a dynamic life without selecting to take
on the risk.
Sharing
This is the dispersal of the risk to any organization or individuals. This is done by using a variety
of explanations including self-insurance strategies and insurance products.
14. Cost-benefit analysis
This is a process by that an organization analyzes determine, projects, systems, decisions, and
value for intangibles. This is built by identifying the benefits of action with costs associated, and
costs subtracting from benefits (Gordon, 2014).
15. Factors
Possible options for action should be specified.
Possible outcomes should be listed. The list should be mutually exhaustive and exclusive.

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16. Items documented in a risk management plan
Process
The entire process in order to classify, mitigate risks, evaluate, and analyze through the life cycle
of a project (Spears, 2016).
Budget
There is a risk on costing of the budget. This is applied when a project start and there are many
bound to variations as the plan proceeds.
Roles and responsibilities
This helps to present the charge of the person in the scenario.
Reporting structure
This elaborate the condition of encountering a risk in the hands of the judgments need to lie.
Risk categories
This helps to categorize and slated the proper information of the organization.
17. Importance to ensure continual reviewing of the risk management plan
Meet deadlines and maximizes results
Continual reviewing of the risk management plan of the organization makes the surety for
eliminating and minimizing negative risk to finish a project on the time. This helps to maximize
profits and minimize expenses (Spears, 2012).
Evaluates the entire project
This helps to evaluate best practices on the next process that assess the impact of activities on
mitigating exposures to problems and exploits opportunities to capitalize on the strength of the
organization.
18. Mechanisms
Monitoring, evaluation, and review
19. Legislation
Codes of practice and national standards
This provides detailed evidence to attain the standards that are necessary under the work health
and safety laws. Codes of practices are admissible in proceedings of a court.

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Elimination of risk in a code of practices refers to the removal of the workers' exposure.
A process with a short-term likelihood during an emergency (Carry, 2013).
Legislation Description and examples
(a) Duty of Care Act in the best interest of the others and
individuals.
Duty of accountant is to prepare customer tax
returns, to minimize the chance of an IRS
audit.
A doctor has the duty to treat a patient to
recover fast from injuries.
(b) Company Law Company law covers legal aspects covered in
merger, acquisition, and formation of
organization and rights of shareholders.
(c) Contract Law It is covered under common law and is
inferred from English law. Any breach could
result in a breach of contract resulting in
compensation/ damages.
(d) Environmental Law The Environment Protection and Biodiversity
Conservation Act 1999’s non-adherence
could lead to penalty provisions.
(e) Privacy Law Privacy Act 1988 is the key legislation,
presiding over privacy breaches in the
Australian jurisdiction

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20. Risk management standards
There are numerous risk management standards have been applied to instrument risk
management systematically and effectively. These help to establish practice, processes, and
framework set by industry bodies or group (Smith, 2013).

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Assessment 2 – Case Study - Part 1
Description of the organization
Specialized in proposing a variety of urban and country architectural facilities, Town and
Country Facilities is willing to board upon a calculated plan, aimed at inaugural four workplaces
in the big regional parts of Orange, Bathurst, Mudgee and Wagga in NSW, throughout the
following 12 months. Some of the facilities on a proposal from the stage of Urban and Country
Services are:
Providing a board of consultant designers who will stay each office 1 day per week.
Making schedules for local persons to see with the advisors.
Goals
Three main objects for the organization could be
Launching an advanced approach to structure technique.
Getting all prepared in the following 5 months.
Policies and Actions for organization risk.
Analysis of external factors
The possibility of the proposed risk supervision strategy is going to cover all the internal and
external stakeholders.
The following stakeholders will be involved
Customers
Suppliers / Builders / Contractors
Critical Success Factors
Staff contribution in applying risk supervision plan
Good training plan
Timely budget approval

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Identification and analysis of external factors
External stakeholders are involved in subsidizing their experience and views in lecturing the
problems that are significant to them as an associate of the community.
Identification of stakeholders
Identification of the stakeholders helps to target the group and collect information as possible
from them. These people have a stake in a situation. Stakeholders in terms of an organization are
those who are maybe internal (e.g. management and employees) and those external (e.g.
suppliers, competitors, etc.).
PESTL Analysis
Political factors
Any alteration in local government posture to funding new industries in the above-designated
areas.
Economic factors
A slump economic condition will not be constructive for new industries and this influence is
going to extremely influence this business.
Social factors
A decline in local population will upset the proposal of business.
Technological factors
Failure to make solid comestibles for a full high spec fit-out will stain the whole plan. Similarly,
failure to place video conferencing facilities could obstruct the business areas related to remote
consumers.
Legal factors
Outline of fresh taxes on new industries for the elected parts will obstruct the economic activity
and this in seizure would influence the plan.

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Economic Factors
Fundamental information affects an organization values with the determination of expected
future values of an organization portfolio.
SWOT Analysis
Strengths
Solid economic growth in the regional
centers
Weaknesses
No experience yet with a proposed innovative
approach to building techniques.
Opportunities
The prosperous regional business
environment can lure more customers for
this company
Threats
Dependence on specialist building products for
the successful execution of new innovative
building techniques
Risk Assessment Table
Risk Likelihood Consequence Level of Risk Priority
Security Almost certain Major High 1
Legal / Contractual Likely Major High 2
Human Resources Likely Moderate Medium 3
Uncertainty in
planning
regulations
Possible Moderate Medium 4
Promotion / Public
Relation
Possible Minor Medium 5

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Agenda, Discussion, Issues
Topic/ Decision notes Discussion led
by
Discussed the report developed so far Me (Assistant
Mg)
A detailed discussion with my Assessor on the risks
identified
Me (Assistant
Mg)
Concerns from my Assessor noted down Assessor &
Trainer
Risk Management Table
The current developments in scheduling regulations are really due to the new council votes.
Name of the 0rganization: Town and Country services
Risk Criteria Risk
High staff turnover
Equipped staffs in terms of training
Human Resources
Security Risk
Loss of confidential data due to in a secured environment
Breaking of lease and rent agreementContractual Risk
Shortage of specialist building products resulting in the
breaking of contracts with premium customers
Closing down regional offices due to the small project life
cycle
Inadequate funding for promoting the proposals such as
offering innovative building techniques
Loss of key marketing
Promotional/Public Relation
Risk
Uncertainty in Planning
Regulations

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Actions Plan
Action Responsible Due date
The above adjustments will be duly incorporated
in my plan
Myself 05.05.2018
Go ahead with the next stage of the Assessment –
Stage Three
Myself
Strategy for implementation of the risk management plan
Message Purpose Audience Delivery Method
Risk management Plan Awareness, Raising
confidence level,
Getting the budget
approved
Shareholders and
directors
The official memo, Presentation to the board
members, board meeting, company website
Training program on risk
control strategies
Making them feel
comfortable and
accountable through
the training program
All staff Face to face meeting, brainstorming sessions.
Email notifications
Risks acknowledged for the organization
The areas acknowledged in the Risk Management framework have been covering under the
following categories:
Human Resources Risk
Due to an inexperienced man on new inventive building methods, various staff correlated
problems are inevitable. The prominent ones being the following.
A rise in stress level
Security Risk
Legal/Contractual Risks
The next two causes could be held accountable for causing this risk:

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The high functioning cost could consequence in finish up early rental/lease agreements that
would in turn; upsurge the contractual and legal risks for the organization.
Promotion / Public relation related Threats
This could happen due to derisory funding for endorsing the suggestions such as inaugural up of
four workplaces in the large designated regional areas.
Report on risk management action plan
Risk Assess
Risk
Controls Monitoring Responsible
Security H Strict financial
transactions
SOPs like no
cash holding at
premises
Deploy security
guard in each
regional office
Security
cameras
recording
to be
monitored
on a
regular
basis
Operations
Manager
Finance
Manager for
checking on
financial
transactions
Action plan process
IDENTIFIED ACTION BY WHO IS WHAT

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RISK WHEN? RESPONSIBL
E?
RESOURCE
S ARE
NEEDED
Security
Risks:
The crime
rate is high in
4 chosen
regions
There is a
security risk
in terms of
the loss of
confidential
data due to
unsecured
environment
Get
quotations
for security
cameras
from at
least 5
different
companies
Develop
SOPs on
financial
and
banking
transactions
In 3
weeks’
time
Risk
Manager
$ 15,000
for
security
cameras
List of sources of information and supporting documents
Monitoring & Reviewing Mechanism
Conduct meetings with relevant stakeholders at least once a month.
Install a surveillance camera in the building.
Recording Methods
Maintaining both hard and soft copies of all the risk management related records.
Keeping back-ups offsite

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Review Mechanism
The management has to take the pain of introducing a culture of continuous learning.
Continuous review, every 6 months, of the proposed risk management plan is another important
activity that the management has to undertake.
Security Risks: Actions proposed and
implemented
Level of risk after proposed actions
(Continued or Reduced)
Higher crime rates in the
proposed areas
Installation of cameras Reduced but storm damage is not
covered in the insurance deal.
References
Brink, C. H., 2019. Political Factors. Factors, XIII(74), pp. 56-62.

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Calker, V., 2017. External Stakeholders. Identification of Stakeholders, X(56), pp. 1-89.
Carry, A., 2013. National Codes of Practices. Australian Government, IV(56), pp. 62-96.
Finney, M. A., 2013. Quantitative Risk Analysis. Analysis And Policies, IX(13), pp. 06-43.
Gill, R., 2011. Risk Identification. Inconsult, II(63), pp. 45-89.
Gordon, A., 2014. Managing Resources. Analysis, I(46), pp. 78-98.
Holder, J., 2015. Resolution of Conflicting Ideas. [Online]
Available at: http://www.projectriskcoach.com/5254/
[Accessed 10 06 2019].
Kielmas, M., 2018. Project Risk Management Methods. Chron, V(78), pp. 45-65.
Klee, K., 2012. Methodology. Communication, I(32), pp. 12-20.
Paladin, R., 2012. Accountability Risk Management. [Online]
Available at: http://paladinrisk.com.au. accountability
[Accessed 06 10 2019].
Ponting, A., 2014. Identification. Project Management, I(45), pp. 78-98.
Reed, M. S., 2015. Internal Stakeholders. Methods of Internal Stakeholders, VII(45-65), pp. 78-
98.
Smith, H., 2013. Risk Management Standards. Risk Monitor, XIV(26), pp. 52-63.
Spears, J. L., 2012. ECN. [Online]
Available at: httpps://www.ecnmag.com
[Accessed 10 06 2019].

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Spears, J. L., 2016. Risk Plan. Information System, V(26), pp. 25-56.
Stake, J., 2014. Stakeholders. In: Chain, ed. Risk Management. Newyork: Springer, pp. 100-223.
Watson, S., 2011. Pestle Analysis. [Online]
Available at: http://pestleanalysis.com
[Accessed 10 06 2019].
Yazar, Z., 2012. Qualitative Risk Management. CRAMM, XI(106), pp. 06-10.