Manage Risk: A Strategic Approach to Operational Management

This document discusses the importance of risk management and communication plans in operational management. It focuses on Mac Ville Pty's business expansion and identifies potential risks. The document also provides an action plan to mitigate these risks.

MANAGE RISK

Introduction
The term strategic planning has often been termed as an activity related to organizational
management. The activity is used for setting priorities and focusing resources. In case of the
current assignment, Mac Ville Pty is chosen for understanding the efficacy of operational
management. The stakeholders are informed about the potential risks associated with business or
finance. The focus on resources and energy on analysis of risks can help in strengthening the
business operations such as expansion in new markets while meeting the financial demands. The
following work makes use of risk management and communication plan. The stakeholders are
properly identified and informed of the possible threats ensuring positive business outcome.
Part 1
Task 1: RISK REVIEW
a) Written report as per case scenario
i) Scope of report
The scope of current report is to determine the network of risk management, control and
governance as designed and represented by Mac Ville Pty. as designed by the management is
enough to ensure smooth function. The scope of proposed risk management is as follows:
 Risk management process is effective and important as risks are rightly identified
 Ethics and values are rightly promoted
 Operational and financial management are on time and highly reliable with abundant
accuracy
 The actions of employees are in compliance to company policies

 Resources are gained economically used efficiently and protected with care
 Plans of attracting customers to the coffee shop and even opening new branches are
achieved within stipulated time
 The quality of food and coffee served, along with the customer service are set at high
standards
 Information technology security practices are adequately implemented
ii) Goals:
The goal for risk management can be termed as follows:
Targets the geographies and market in which Mac Ville Pty is doing business in order to tap
more resources from the market
The plan additionally specifies the services and types of beverages Mac Ville Pty provides in the
mentioned market. The channels used by Mac Ville Pty to enter those markets and the
characteristics such as quality product at premium price is what differentiates Mac Ville Pty
coffee from others
The goal is built on important elements on the process, through which entity converts labour and
material into services and products.
iii) Stakeholders
Internal
stakeholders
Issues External
stakeholders
Issues
Employees The employees often
get tired due to
Consumers Lack of efficient
ethical practises

increase in work
pressure and fail to
provide optimum
work results
coupled with increase
in the coffee prices
Managers Shifting their mindset
along new roles and
communicating with
the employees
Suppliers Consistency among
the supplies made and
staying up to date
with the range of
supplies
Investors Insufficient economic
growth of the
company coupled
with increasing
pressure of debt
Government The Australian laws
demands increasing
compliance to ethical
and legal standards, a
failure to do so may
lead to cancellation of
license in business
Table 1: Issues faced by the Stakeholders
(Source: Created by the author)
iv) PEST and SWOT for the risks
Factors Impact
Political The Australian laws demands increasing compliance to
ethical and legal standards, a failure to do so may lead to

cancellation of license in business. For example, the sugar tax
in Australia can cause potential problems for Mac Ville Pty.
as they need to change their coffee recipes and adjust their
sugar content respectively. The shift of concentration from the
core competencies can cause problem in business
Economic The rate of disposable income is increasing and Mac Ville
Pty. can take advantage of the mentioned situation decreasing
the rates of debt on the company. Mac Ville Pty can
additionally enhance the level of financial input with the rise
in income reducing risks of debts
Social Coffee shops gained immense importance in the recent time
due to change in lifestyle. The increase in rates of coffee
consumption, can prove useful to the Mac Ville Pty.
Technological Technology such as software for bill payment and
maintaining business records can seem useful. However,
during the initial stage the purchase of the software can be
costly, so is the training. In order to train the employees,
investors need to spend significant amount of money. This
may lead to financial loss
Table 2: PEST analysis
(Source: Created by the author)

Strength
High product quality with better taste
Premium customer services
Weakness
High price of the coffee
Rigid policies certain outlets
Threats
High price can create a scope for competitors
to provide products at low price
Homegrown brands dominate the retail market
Opportunity
Young population
Increase in disposable income
Table 3: SWOT analysis
(Source: Created by the author)
v and vi) The overall strategy of the business proposition of Mac Ville Pty is based on the
proposition that plans to expand the existing business to Queensland. Underdeveloped
operational infrastructure is one such risk in business expansion. As stated by Sadgrove (2016),
most growing companies are concentrated on the ability to produce now that they spend limited
efforts on building operational efficacy for sustaining growth over an extended period of time.
However, the gap can be easily filled by smooth communication channels. Similarly, majority of
mergers often fail to meet the expectations associated with performance. Hence, reasonable
development with continuity to learn can be of immense use
b) Meeting details
EMAIL:
To

The stakeholders,
Mac Ville Pty, Queensland
The email is to bring your kind attention to a matter of concern. Mac Ville Pty plans to expand
business to nearby areas with increasing concentration to enhance operational efficacy in
business. The details of meeting for addressing the issues are attached below. Your presence is of
high importance for the company’s growth
Thanking you,
Financial analyst
Mac Ville Pty
Meeting or project
name
Mac Ville expansion
Meeting date 10th June 2019 Start time 11AM
Location Toowoomba End time 12.30PM
Stakeholder Employees
Investors
Managers
Minutes taken 90 Minutes
Meeting objectives:
 To expand the business to Toowoomba and ensure immense internal controls over
monitoring and even cash handling
 To capture a wide range of consumers within the market

 To make standards to meet organizational compliance and ensure professional culture in
business
Agenda and issues
Topic Discussion led by
Expanding the business Manager and investors
Limiting the financial risks Financial Manager
Enhancing the business operations Operations Manager
Table 4: Agenda and issues
(Source: Created by the author)
Action Responsible person Time
To increase financial efficacy Financial Manager 2 months
To streamline business operations Operations Manager 1 month
To ensure business expansion Marketing Manager 3 month
Communication plan
Target
audience
Key message Communication
method
Responsib
le person
Deadline
Employees Work hard to
enhance the
customer services
Face to face
communication
HR
manager
In 10 days
Customers Increase the Social media Marketing In 20 to 30 days

frequency of visits posts manager
Investors Invest in business
expansion plans
Written
communication
Operations
manager
1 week
Table 5: Communication plan
(Source: Created by the author)

PART 2:
TASK 1:
Risk analysis report:
Introduction:
The business expansion into the new areas can be termed as a risky venture. However, it can be
termed as an effective way to leverage core business growth. Nevertheless, it should be taken
into consideration it often makes use of disciplined process to assess the growth of company.
Investigation of the appropriate level of resources in alignment to the market analysis can create
a foundation for success in the chosen business
Findings and analysis
Defining the target market, often seem as a simple step. However, it becomes increasingly
difficult to understand the needs of the customers become increasingly difficult. Thus,
considering the demographics is of immense importance, coupled with the needs of target
customers. In similar regards, it can be easily stated expanding into the new markets makes use
of market research. The chosen business organization needs to develop in-depth market research.
As pointed out by Hess & Cottrell (2016), enhancing the expansion of market and associated
research can help in coping with possible financial risks. It should be taken into consideration;
much of business expansion is widely driven by the internal capabilities
Thus, it can be clearly analysed the increasing wish to expand business is often coupled with
financial risks. The lack of legal compliance is a major issue. The Australian laws demands
increasing compliance to ethical and legal standards, a failure to do so may lead to cancellation

of license in business. For example, the sugar tax in Australia can cause potential problems for
Mac Ville Pty. as they need to change their coffee recipes and adjust their sugar content
respectively. The shift of concentration from the core competencies can cause problem in
business. To ensure that the business run in accordance to legal and social compliance, it
becomes important to find the risks and analyse the level of same for better business operations.
The table given below summarizes the list of possible risks that can be observed during the
course of business expansion
Risk Level of risk Control Monitoring Timeline Responsible
person
Lack of
corporate
culture
High Training to
the newly
recruited
employees
Increase rates
of customer
visits,
satisfied due
to good
customer
services
2 to 3 months Corporate
trainer
Allocation of
resources
Medium Making
proper
planning of
resources to
meet the
organizational
Making charts
for the
resources and
the person
responsible
should be
1 month Resource
manager

needs taken care of
Legal
compliance
Low The business
organization
needs to
maintain the
level of
ethical and
legal
compliance
Decreasing
legal risks
2 months Advocate
Table 6: Risk management plan
(Source: Created by the author)
The risk management plan provides a clear idea about the possible risks. The plan additionally
specifies the services and types of beverages Mac Ville Pty provides in the mentioned market.
The channels used by Mac Ville Pty to enter those markets and the characteristics such as quality
products at premium price are what differentiate Mac Ville Pty coffee from others. The overall
strategy of the business proposition of Mac Ville Pty is based on the proposition that plans to
expand the existing business to Queensland. Underdeveloped operational infrastructure is one
such risk in business expansion. As stated by Hillson & Murray-Webster (2017), most growing
companies are concentrated on the ability to produce now that they spend limited efforts on
building operational efficacy for sustaining growth over an extended period of time. However,
the gap can be easily filled by smooth communication channels. Similarly, majority of mergers
often fail to meet the expectations associated with performance. Hence, reasonable development
with continuity to learn can be of immense use

Summarization of key points
Based on the above analysis, it can be clearly stated the issues in chosen business organization is
not limited to financial risks. The risk can extend up to loss in brand name and losing base of
loyal customers. Based on the studies, it can be easily stated the stakeholders are often concerned
about the importance of enhancing the quality of coffee products. The clients are additionally
seen to have increasing concern in regards to the investment, poor allocation of resources are
likely to create trouble for the business investors. In addition to that overnight insurance cash
holding issues can be additional problem in business
Conclusion
Based on the above studies, it can be easily stated Mac Ville Pty has gained immense importance
in recent times. The risk management plan can ensure the resources are streamlined and
allocation of the resources should be made proper. The risk analysis and financial management is
important for Mac Ville Pty as it plans to open new outlets. In addition to that it can be
concluded, business organizations are often seen to invest immense concentration on the core
competencies such as operational management

PART 3:
Task1: Action plan
Action plan
Risk Action Time Responsible
person
Resources
Delay in
development of
the new
infrastructure of
the stores
It becomes
increasingly
important to
understand the
fact of
developing
infrastructure
3 to 4 months Operations
manager
Project manager
Finance
Blue prints
Limited use of
written
procedures
Initiation of
written business
policies must be
started
1 month CEO
Operations
manager
Money
Time
Email
Drafts
Memos
Limited audits
for business
performance
The audits need
to be carried in
terms of sales
and finance
monitoring
4 to 5 months Business and
financial analyst
Business reports
Sales reports
Financial reports
Time

Money
Table 7: Action plan
(Source: Created by the author)
Based on the above studies, it can be clearly stated Mac Ville Pty the risk is immense in regards
to the current business proposition. The risk management plan provides a clear idea so as to how
risks need to be identified and analysed through the course of operational efficacy. The business
organizations such as Mac Ville Pty are seen to increase the level of focus indentifying the risks
and managing the same before the risks affect business of Mac Ville Pty. The ability to manage
business helps Mac Ville Pty to act confidently on future business decisions. The action plan for
the following risk management plan can provide the following benefits
 See the risks that are not apparent as several of the actual risks faced by the business
organization cannot be gleaned from textbooks
 Provide support and insight to the board of directors
 Obtain justified credit for cooperation.
 Build a better defense to class the actions
 Reduction in business liability can often be termed as an added advantage
 Framing of the regulatory issues that can provide a strong foundation for business
In similar regards, it can be easily stated an action plan helps in informing the stakeholders about
the project initiative or strategy. The action plan in the current scenario includes systematic
intervention that can be used for keeping track on the business Finally, it can be stated the action
plans are of high importance at it aims to create a strategic business plans. The scope of proposed
risk management is as follows:

 Risk management process is effective and important as risks are rightly identified
 Ethics and values are rightly promoted
 Operational and financial management are on time and highly reliable with abundant
accuracy
 The actions of employees are in compliance to company policies
 Resources are gained economically used efficiently and protected with care
 Plans of attracting customers to the coffee shop and even opening new branches are
achieved within stipulated time
 The quality of food and coffee served, along with the customer service are set at high
standards
 Information technology security practices are adequately implemented
Storing of risk management plan is of prime importance. If the plan is not stored properly then
there are high chances that the plan for the chosen business organization may be used by the
competitors for leveraging competitive advantage in business. The action plan can be stored in
password protected files in computer or even laptop of the investor or the owner of business. The
plan for risk management can be additionally shared with the employees and other stakeholders
Implementation of the risk management plan
Having done all the work, including informing the management about the potential risks, it is
now time for the working group to bring action into the risk management plan. The management
committee needs to consider the plan and clarify the existing doubts. In addition to that once the
clarification is made the plan needs to be endorsed. Following are the stages of plan
implementation:

 Issuing a risk management statement
 Training
 Establishing and documenting procedures
 Allocating specific responsibilities
Inclusion of risk management statement
A good starting point can help Mac Ville Pty stakeholders to understand that the organization is
highly serious about issues pertaining to risk management. The action plan associated with risk
management statement should outline the proposed timetable and key contact people and
procedures that help in contributing to the action plan proposed during risk management process.
Training: Training can be identified areas wherein written procedures need to be documented. In
implementing the plan, introduction of the new practises often need training. The training in
regards to risk management needs to be executed in the context of overall training related
activities within the business organization
Establishing and documenting procedures: The risk management plan is known to identify the
problematic areas. In implementing the plan it becomes important for the staff and management
to work together for developing the procedures. Existing procedures need to be reviewed for
ensuring consistency in service delivery.
Allocating specific responsibilities : there remains no doubt in the fact that risk
management plan does not implement itself. Different people with the chosen business
organization, Mac Ville Pty should be clear to the external and internal stakeholders about the
responsibilities and responsible person.

Task 2: Monitoring of the action plan
Based on the studies, it can be easily stated the previous plan was not successful enough. The
following risks were identified.
 Cash holding and insurance issues
 Delayed bank account opening leading to service issues
 Delay in teleconference system planner
 No excusal letter from the CEO
Based on the above analysis, it can be clearly stated the issues in chosen business organization is
not limited to financial risks. The risk can extend up to loss in brand name and losing base of
loyal customers. Based on the studies, it can be easily stated the stakeholders are often concerned
about the importance of enhancing the quality of coffee products. The clients are additionally
seen to have increasing concern in regards to the investment, poor allocation of resources are
likely to create trouble for the business investors. In addition to that overnight insurance cash
holding issues can be additional problem in business. Technology such as software for bill
payment and maintaining business records can seem useful. However, during the initial stage the
purchase of the software can be costly, so is the training. In order to train the employees,
investors need to spend significant amount of money. This may lead to financial loss. Based the
issues, action plan implementation can be highly monitored through the template given below as
follows:
Training name: Implementation of the action
plan
Trainer: Joe Smith
Duration: 1 day Email: [e-mail]

Expected outcomes:
Through the mentioned training, the business organizations can understand the potential threats
associated with business expansion
The internal stakeholders would be able to identify the issues and in business and work in
accordance to the policies to ensure better business outcomes
The external stakeholders such as suppliers can understand the ways to provide the raw materials
for business
Implementation session outcomes:
Through strong modes of communication the mentioned plan can be achieved.
Table 8: Monitoring the action plan
(Source: Created by the author)
The risk management plan provides a clear idea about the possible risks. The plan additionally
specifies the services and types of beverages Mac Ville Pty provides in the mentioned market.
The channels used by Mac Ville Pty to enter those markets and the characteristics such as quality
products at premium price are what differentiate Mac Ville Pty coffee from others. The overall
strategy of the business proposition of Mac Ville Pty is based on the proposition that plans to
expand the existing business to Queensland. Underdeveloped operational infrastructure is one
such risk in business expansion. As stated by Hillson & Murray-Webster (2017), most growing
companies are concentrated on the ability to produce now that they spend limited efforts on
building operational efficacy for sustaining growth over an extended period of time. However,
the gap can be easily filled by smooth communication channels. Similarly, majority of mergers
often fail to meet the expectations associated with performance. Hence, reasonable development
with continuity to learn can be of immense use

Implementation of training session plan
Goals Activity Materials Time Participant
activity
Delayed bank
account opening
leading to service
issues
Request the staff
to survey the
nearby banks and
other banking
organizations
that can ensure
quick banking
services
Market reports
Banking reports
2 hours Staff need to
listen and create
a brainstorming
session for
answering the
queries
Cash holding and
insurance issues
Request the staff
to survey the
nearby banks and
other banking
organizations
that can ensure
quick banking
services
Market reports
Banking reports
1 day Staff need to
listen and create
a brainstorming
session for
answering the
queries
No excusal letter
from the CEO
Need to
communicate
with the CEO
about the
Market plans
Financial plan
2 days There is a need
to ensure CEO is
provided with
abundant

importance of the
mentioned plan
for issuing the
excusal letter
information
verbal
communication
is important
Table 8: Implementation of training session plan
(Source: Created by the author)
Conclusion
Based on the above studies, it can be easily concluded Mac Ville Pty is subjected to financial
risks and needs to implement the action plan. The managers have understood the importance of
executing the plan. Thus, it can be additionally concluded Mac Ville Pty caused significant shift
in the core competencies to ensure positive business outcomes

Reference list
Hess, M. F., & Cottrell Jr, J. H. (2016). Fraud risk management: A small business
perspective. Business Horizons, 59(1), 13-18 Retrieved from: http://iranarze.ir/wp-
content/uploads/2016/10/E2572.pdf [Retrieved on: 4th June 2019]
Hillson, D., & Murray-Webster, R. (2017). Understanding and managing risk attitude.
Routledge.
Sadgrove, K. (2016). The complete guide to business risk management. Routledge.