Manage Business Risk: Framework, Policies, and Techniques

Manage business risk

TABLE OF CONTENTS
ASSESSMENT TASK 1.................................................................................................................1
ASSESSMENT TASK 2 – CASE STUDY.....................................................................................7
1...................................................................................................................................................7
2...................................................................................................................................................7
3...................................................................................................................................................9
4...................................................................................................................................................9
5.................................................................................................................................................10
6.................................................................................................................................................11
7.................................................................................................................................................11
8.................................................................................................................................................12
9.................................................................................................................................................14
10...............................................................................................................................................14
ASSESSMENT TASK 3 – PROJECT..........................................................................................16
1.................................................................................................................................................16
2.................................................................................................................................................16
3.................................................................................................................................................16
4 and 5........................................................................................................................................16
6.................................................................................................................................................18
7.................................................................................................................................................22
8.................................................................................................................................................22
REFERENCES..............................................................................................................................23

ASSESSMENT TASK 1
1 Define the term ‘business risk’ using your own words. Yes No
The term business risk is used to refer to any activity or factor that is
capable of causing harm to the smooth conductance of operations of an
organization. The harm can be in form of low profit earnings by the company,
hindrances in its operations, threat to its reputation, inability to compile as per the
applicable laws (labour laws, employment laws, environmental laws or corporate
laws), and financial instability.
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2 Describe the risk management framework. Satisfactory
answer
Yes No
Every business faces some or the other kind of risk, it is impossible to run
a business without undertaking risks. It is mandatory to undertake risk in order to
have the aimed benefits. High amount of risk can have adverse level of impacts
over the operations of the firm to a great extent, it can even result in the failure of
the organization altogether. Risk management refers to an activity that is
performed by the businesses all over the world in order to balance the risk. In risk
management risk is first identified, then it is assessed and lastly prioritized based
on its impact over the business. Risk management framework (RMF) is
something that enables firms to manage such risks. In the developmental stage of
a system’s life cycle, RMF is a risk based approach that brings together the
important elements involved in the stage that are security, privacy and cyber
supply chain. This approach assures selection of the elements taking into account
the efficiency and effectivity and adherence to the applicable laws.
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1

3 Outline the legislative and regulatory context of the organisation in relation
to risk management.
Satisfactory
answer
Yes No
There are various kinds of risks to which a business organization is
exposed to this includes legal risks and regulation risks. The term regulatory
system to any sectors is combination of regulatory requirements and voluntary
standards that are involved in the production of products. It also includes laws and
rules that control the set requirements and standards. In regulatory context of risk
management, the risks associated with regulatory systems that have adverse
impacts on both internal and external stakeholders of the business are managed.
The regulatory risks affect security, industry or company because of the changes
in regulations or legislations. The changes in regulations or legislations that
affects the company are tariffs and trade policies, tax policy reform, minimum
wage laws, vacations and sick days compulsion and financial regulation.
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Assessor comments on decision made (if any)
4 Explain organisational policies, procedures and processes for risk
management.
Satisfactory
answer
Yes No
2

Organizational policies, procedures and processes for risk management
are the series of steps in a written format that the company follows in order to
ensure minimal amount of risks being faced by the employees during the
performance of their job roles. The process for ensuring this may be installation
of recent upgrades into equipment, etc. The risk management policies, procedures
and processes that the organization follows acts like the governing rules for it.
These explains to the employees the expectations of the company from them and
conveys them the protection that company assures to them to keep them safe from
the harm at the work roles might cause to them. The purpose of an organization
with this is to make the work place a safe place for its employees by making the
amount of risks attached to it minimal.
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Assessor comments on decision made (if any)
5 Identify risk management documents and explain document storage
procedure.
Satisfactory
answer
Yes No
The different documents that are prepared in the process of Risk
Management are: risk register, risk management plan, contingency and mitigation
plans, risk reports, response strategies and assessment matrix. The prepared
documents are stored by the file management team of the company, that follows
the procedures of the company for managing the files, information management
schedule is created for recording the documents. Company also have destruction
plan for document to destruct the documents when their purpose gets completed.
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Assessor comments on decision made (if any)
6 Identify and briefly describe types of business risks. Satisfactory
answer
Yes No
3

Strategic Risk – This type of risks occurs when business finds itself unable
to operate as per its plan or business model. Any business organization becomes
ineffective over time when it cannot operate as per the strategies, resulting in
generation of low profits. Compliance Risk – Businesses that are highly regulated
face this type of risk. The risk arises when business does not operate with
following all the laws that applies to it. Operational Risk – This kind of risk is
faced when the company’s operations are not performed by it. Reputational Risk
– Risk for a company that its reputation in the market gets spoiled because of any
event by the company that is not acceptable by the society, legal or regulatory
framework is classified as reputational risk.
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Assessor comments on decision made (if any)
7 Identify and briefly describe options for treating risks. Satisfactory
answer
Yes No
The various options that are related to treat risks are: Avoidance – Risks
can be prevented from happening by avoiding the activities that increase the
chances of occurrence of risk. Reduction – In the response of risk that is sure to
happen certain actions are performed by the organization to mitigate or reduce the
impact of risk over organizational performance. Transfer – In this the impact of
risk is transferred to a third party. Insurance companies are the example of third
part on which the companies can transfer their risk. Acceptance – The acceptance
way of treating the risk means to accept the fact that risk is present. For example,
the owner of the company accepts the fact that the amount invested in the
company may be lost by him if company fails. Sharing – In this the risk is treated
by distributing it to different organizations.
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Assessor comments on decision made (if any)
4