Mcville’s Risk Management PDF

Running head: MCVILLE’S RISK MANAGEMENT
MCVILLE’S RISK MANAGEMENT
Name of the Student
Name of the University
Author Note

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Introduction
The corporate world has its fair share of risks and threats. Mergers and acquisitions are
effective business mechanisms to tackle the various threats and risks that form important
challenges for any organization functioning in the present corporate scenario. At the same time
these are also effective expansion strategies that help to reduce competitiveness. Hence, larger
firms often acquire smaller firms to optimize their business potential. Mergers and acquisitions
bring newer growth and development opportunities. They are effective in terms of the expertise
that they create. According to Rust and McKinley (2016) mergers and acquisitions are effective
in terms of reducing market competition as the larger firms engage in acquiring the smaller
firms. This on the one hand reduces market competition and on the other hand serves to make the
larger organization even stronger. The process enables the larger firms to develop better
competencies that in turn helps them to develop their operational factors. They can acquire the
existing assets of the firm and use them to boost their productivity at optimal levels
(Chebotareva, Khomenko & Khodorovsky, 2018). However, there are many large risks that are
associated with mergers and acquisitions. These risks are significant as they can determine
whether the organization can emerge profitable from the merger or acquisition or fail to develop
their business effectively despite merging or acquiring. This necessitates the formation of
effective risk management plans. The risk management plans become important for developing a
strong planning process for any firm. In this research two companies, the McVille Pty Limited
and Hurley’s café are being considered for analyzing the risk involved in mergers and
acquisitions. McVille is the acquiring organization and Harley’s café is being acquired. The
study is being presented on behalf of the assistant manager, who would be promoted to the
manager’s post of Hurley’s Café after the acquisition. It is now his responsibility to provide a
strong risk management analysis for the new organization.
Assessment 1- McVilles risk management and policy report
There is an important need for the risk management analysis of MacVille Pty Limited.
Scope
There are various risks that can be associated with the acquisition of Hurley’s café. It is
the responsibility of the manager that these risks are identified and put forward before the higher
management. As the future manager of the Hurley’s café, the manager would need to comply

2MCVILLE’S RISK MANAGEMENT
with the risk strategies that would be decided by the higher management body of the McVille Pty
Limited. The approach needs to include the identification of risks and listing them in accordance
of their significance. The organization has a dedicated committee for risk management called the
Finance, Audit and Risk Management (FARM). The committee deals with any form of risk
management and works directly under the CEO’s leadership. The manager is to provide a
detailed report to the committee which the committee would review to further evaluate the
identified risks and take necessary decisions.
Goals
The case study analysis reveals several success factors that are associated with the risk
management strategies of McVille. The organization in the past has displayed an effective risk
management framework. The success factors can be listed further.
Strength of Finances
The McVille organization has been financially strong. This has helped the organization
acquire the required resources for establishing effective risk strategies. The organization held
offices in various major cities of Australia. There were cafes located in Sydney, Queensland and
Brisbane. This points to the fact that the organization has been able to generate high revenue
over the years. These three markets have helped the organization consolidate its financial
position. The M and A strategy has further strengthened the organization. Especially, the
acquisition of Hurley’s café in Toowoomba has pointed further towards its financial strength.
Organizational structure and FARM committee
The McVille Company has a strong organizational structure under the leadership of the
CEO. The email of Paula Kinski to the to-be manager of the café makes this more evident. It was
informed to the future manager that it’s his responsibility to visit the Hurley’s Café. This would
help to further analyze the risk management strategies. At the same time the future manager
would be assisted by the FARM committee. This would help to optimize the risk management
procedures that are very important in developing effective risk management functions. The apex
management body would oversee the entire process. The responsibility of the dedicated
committee would be to identify, audit and manage risks that can disrupt the success factors that
the acquisition proposes. This provides evidence of the organization being effectively poised for
risk management development.

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Hierarchy and communication
An important success factor that has been identified is the communication levels that
have been established across the organizational hierarchies. This is an important factor that can
further led to the effectiveness of the risk management plan. The communication levels across
the organizational hierarchies were found to be very good. Firstly, Paula initiated the process by
asking the future manager to conduct risk management analysis of the café. Secondly, it was
mentioned explicitly that the manager would be holding meetings with the committee. Thirdly,
Paula and the CEO further informed the manager of the opportunities to regularly hold the
meetings. All these aspects combine to prove a strong communication framework for McVille.
Risk analysis of the subsidiaries
It is important to note that the initiative taken by McVille to find the risks that can be
associated with the actual buyout of the organization points towards a string planning function
that is maintained by the organization. Conducting risk assessment is an important success factor
that is responsible towards the effective risk management strategy of the organization. The
subsidiary’s potential effects on the operational factors of the organization needs to be evaluated
strongly. The strategy undertaken by the organization can ensure that the buyout becomes a
smooth process presently and leads to more future benefits of the organization. This is an
effective risk management stance. This can help the organization to make strong strategies that
can further determine the effectiveness of the buyout strategy. This can lead to the further
success of the organization in the future through the reduction of the risk involved with the
acquisition process.
Stakeholders
Stakeholder Internal/external Role in process Issue/concerns

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The management
board
Internal Forming strategies
for risk
management and
coordinating with
the employees
throughout the
hierarchical levels.
1. Risks in the
markets resulting
in profitability
reduction
2. potential losses
for both tangible
and intangible
assets
Paula Kinski, CEO Internal 1. Leading
meetings
2. Leading the
boards of
directors.
3. Communicating
the most important
risk strategies to
all stakeholders
including the
board members
and the other
management
heads
4. Risk
management
strategies in
relation to
buyouts.
Potential loss of
reputation and
promotion
prospects.
Brisbane,
Queensland and
Internal The management
teams took active
Faulty reporting of

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Sydney
management teams
part in the
decision making
processes and
helped the higher
management to
take important
decisions.
Provided guidance
and led the
employees of the
lower levels.
risks.
Lack of
cooperation from
subordinates.
Ron Langford External Councillor and
landlord.
Potential tenant
loss
James Mansfield Internal Store supervisor
of Hurley’s.
Potential loss of
promotion.
Hurley’s staff Internal Employees. Potential loss of
employment.
Goldsmith
Partners
External Legal and
compliance
advice.
Potential loss of a
client & potential
for being sued for
advice given.
Analyses
PESTEL- external environment
Political:
1. Australian political situation is stable.
2. The country has important bilateral ties
with many countries that help to sustain its
Economic:
1. Australia has a well-established and growing
economy.
2. One significant issue affecting the economy

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economic growth (Evison, Kremer & Guiver,
2018).
3. Work Health and Safety Act 2011 ensures
that the workplaces are safe.
4. Intellectual property rights are protected in
the country with many important laws.
5. The environmental laws of Australia are
strong and it is important that MacVille and
its subsidiaries comply with them.
presently is the fluctuating rate of AUD in the
international currency rate.
Social:
1. Risk management is an important aspect
that is focused by all Australian organizations.
Companies are paying more importance
towards knowing the risk factors.
2. The spread of awareness among customers
in Australia would encourage the companies
to enforce risk management strategies to
achieve customer satisfaction.
Technological:
1. New technologies have enabled organization in
the country to establish computerized risk
management systems.
2. Cloud computing and similar advanced
technological usage has made risk management
and future forecasts process even better for most
of the large organizations.
3. Big data would analytics would enable the
companies to acquire, manage and apply a large
mass of data regarding risk management which
would in turn would contribute towards more
efficient risk management.
4. There is a significant risk of hackers getting
access to confidential company resources and
information due to the development of globally
connected technologies.
SWOT- organizational environment
Strength:
1. The organization is financially strong
Weaknesses:
1. The risk management standards of the

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enough to engage in mergers and acquisitions.
2. Strong and structured hierarchical
administration.
3. FARM and apex management have ensured
that an effective risk management strategy is
in place.
subsidiaries may be optimally aligned with
MacVille.
2. Conducting risk management analysis in
subsidiaries pre-buyout are lengthy and
expensive processes.
Opportunities:
1. Risk management strategies can ensure
greater returns from the acquisition process.
2. Providing effective training to all
employees in the risk management process.
3. Business expansion by acquiring
subsidiaries.
Threats:
1. market conditions are dynamic and instable
at times
2. Lack of strategic fit with the subsidiaries
post acquisition.
3. Achievement of actual risk management
standards at subsidiaries may be below target
standards.
Research
The review of the case study brought forward many important information that can
further help McVille Pty Limited in the future. The company started as a hospitality company in
Australia. The organization owned café chains in Queensland, Sydney and Brisbane. Steady
profits were experienced by McVille Pty Limited over a period of five years. As a result of the
same the firm became financially strong. Moreover, the organization displayed strong levels of
communication between the various departments. The organization is effectively poised to
undertake strong risk management strategies. This was proven by the fact that the organization
engaged in evaluating the acquisition before officially engaging in buying the café. It is
important to note that the existence of the Finance, Audit and Risk Management (FARM)
committee made it even stronger in the field of risk management. Based on the functions of
FARM and the future manager effective risk management plans could be established further. The
apex management actively engages with the FARM committee and the manager to evaluate the
risks. This provides strong evidence of the coordinated risk management strategies that the
organization can take in the future. The managers were assigned responsibilities to visit and

8MCVILLE’S RISK MANAGEMENT
evaluate the real time situations that existed within the café to be acquired. The guidance
provided to the manager is very effective and important in view of the future growth strategies.
Description
There were various risks that were found by the manager of the future outlet at
Toowoomba. The following are the results after conducting the risk management strategies for
Hurley’s café.
Risk Scenario
Risk 1: Banking risks 1. The management of the Hurley kept no record of the cash
transactions and any employee could record financial
transactions.
2. There have been thefts of cash.
3. Cash was not deposited into bank on time and there was no
cash vault
Risk 2: Manager’s travel risks 1. The way is blocked by trucks.
2. Prone to accidents and physical injury
Risk 3: Legal and compliance
risks
1. Loss of brand reputation due to inefficient business
management
2. Fines and penal charges due to wastage of resources like
water.
Risk 4: Goodwill risks 1. The staff at the Hurley’s did not wear MacVille’s uniform
2. The Hurley’s staffs may try to alter or distort signature
processes of customer service of the MacVille, thus
hampering its brand value.
Assessor meeting
It is important for the manager to meet the assessor and discuss the identified risks. These
risks need to be discussed further.

9MCVILLE’S RISK MANAGEMENT
- The risk management analysis at Hurley’s café was found to be very weak. The process
was taking place at a slack rate. The risk strategies of the café were found to be far
inferior of the more effective risk management strategies that were being established by
the McVille organization. At the same it was found to be financially weak and instable.
Strict financial policies were not followed and the information of finances could easily be
accessible by anyone without any form of password protection. The management did not
deposit the finances in the bank on regular basis.
- There were no sufficient employee safety aspects found in the Hurley’s café. The risk
analysis revealed that the organization breached the Safework policies of Australia. The
workplace was found to be ineffective in terms of the safety of the employees
- The café was situated on a road that had travel risks this was not considered by the
management.
- The organizational culture of the organization was not strong enough to develop a
positive environment in the operational areas of the management.
- Some important recommendations can be provided to the organization to further develop
its business.
1. The management of Hurley’s can be encouraged by McVille to mitigate the risks to the
lowest possible levels.
2. The employees of the organization can be trained by McVille on effective risk
management the superior risk management techniques of the organization can be more
effective in this case.
3. It is important for the organization to provide financial help to the company. Technical
support and training can also be provided to encourage better risk management practices.
Developing communication with stakeholders
A draft of the communication can be developed and presented before the senior manager.
The draft aims to communicate to the stakeholders that their participation is required in the Risk
management functions of Hurley’s Café.
To: <stakeholder mail id>
From: <email id of manager>
Cc: Official email id of CEO and directors

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Bcc: <the FARM committee official mail ids>
Subject: Risk identification at Hurley’s café and participation invitation
Dear Mr/Ms/M/s
The McVille Pty Limted with great pleasure announces the decision to adopt Hurley’s
Café at Toowoomba in order to expand its business further. The management of our company
has undertaken an effective risk management analysis of the policies that are present in the café.
The findings and the subsequent analysis has been attached with the mail. The company would
like to hereby invite all the stakeholders to assist in strengthening the assessment of the
organization through your valuable inputs. We consider ourself to be fortunate indeed to invite
your participation. We encourage you to fully identify the risks from your end and inform the
same to us. This can help us to create a stringer risk management procedure in the future.
Regards
<Name>
<Designation>
McVille Pty. Limited
Assessment task 2:
Plan for risk management and analysis
Risk Scenario Likelihood Consequences Priorities Treatment
ways
Likely to
be
effective
Feasible
Risk 1:
Banking
risks
1. The
management
of the Hurley
kept no record
of the cash
transactions
and any
employee
could record
financial
High 1. Financial
loss
2. Shortage of
capital
3. Improper
audit.
4. Ethical
practices to
hide
accounting
High 1.
Depositing
cash into
bank
regularly
and keeping
cash in hand
in secured
vault.
Yes Yes

11MCVILLE’S RISK MANAGEMENT
transactions.
2. There have
been thefts of
cash.
discrepancies 2.
Accounting
done by
specific
employee
with strong
accounting
knowledge
Risk 2:
Manager’s
travel risks
1. The way is
blocked by
trucks.
2. Prone to
accidents and
physical injury
High 1. Delay in
transports.
2. Accidents
would cause
damage to the
safety of
managers and
financial loss
to the
company.
Very
high
1. Providing
transport
services to
employees
2. Following
traffic rules
Yes Yes
Risk 3:
Legal and
compliance
risks
1. Loss of
brand
reputation due
to inefficient
business
management
2. Fines and
penal charges
due to wastage
of resources
like water.
Medium 1. Loss of
goodwill.
2. Increase in
legal costs
High 1. Marketing
the
restaurant
products.
2. Creating
special
edition food
items.
Yes Yes
Risk 4:
Loss of
brand
recognition
risk
1. The staff at
the Hurley’s
did not wear
MacVille’s
uniform
2. The
Hurley’s staffs
may try to
High 1. Customer
poaching by
competitor
restaurants.
2. Reduction
in generation
of revenue
High 1. Marketing
of products.
2. Gaining
support of
stakeholders
in its
introducing
more
Yes Yes

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alter or distort
signature
processes of
customer
service of the
MacVille, thus
hampering its
brand value.
innovative
and new
products.
Risk management process
Upon identifying the risks of the merger, the employees of McVille should inform the
same to the highest management of the organization. The higher management would form
strategies that can be executed by the employees of the lower levels. The highest management
would control all the risk management strategies in place. The success factors have been
considered and the feasible path would be taken for the same.
Risk management plan
Risk
Assess
Risk
(L, M,
H, E)
Controls Monitorin
g
Timeline
s(month
s)
Responsible
Banking
risks H
1. Depositing cash into bank
regularly and keeping cash in hand
in secured vault.
2. Accounting done by specific
employee with strong accounting
knowledge
CFO, CEO
and FARM
Committe
e
1
Respective
managers
and assistant
managers
Manager’s
travel risks H
1. Providing transport services to
employees
2. Following traffic rules
CFO, CEO
and FARM
Committe
e
2 Apex
management
Legal and
compliance
risks
H
1. Marketing the restaurant
products.
2. Creating special edition food
items.
CFO, CEO
and FARM
Committe
e
3
Respective
managers
and assistant
managers

13MCVILLE’S RISK MANAGEMENT
Loss of
brand
recognition
risk
E
1. Marketing of products.
2. Gaining support of stakeholders in
its introducing more innovative and
new products.
CFO, CEO
and FARM
Committe
e
4
Respective
managers
and assistant
managers
Communication of the risk plan to MacVille Pty limited
The to be branch manager of the Toowoomba outlet of McVille is to be rebranded from
Hurley’s. The following should be communicated to the Queensland based management.
1. Risk analysis and management plan
2. Process of Risk Management that coincides with the risk management plan feasibility
3. The plan for Risk management
Assessment Task 3- Risk management plan evaluation
Plan: Risk Management implementation risks of MacVille Pty Limited (pertaining to Hurley)
Activity
Nos Implementation activities particulars Months Outcomes
1
Apex managers hold meeting with middle level
managers on the risk management implementation 2
Reduced risk at
Hurley's Café and lower
risk management
expenses which
MacVille would have to
bear post acquisition of
Hurley
2
Finance department places the budget for approval of
the apex management 1
3
Apex management risk management implementation
approves budget 1
4
Apex management holds meeting with the
shareholders 1
5
Apex management holds meeting with bank officials
to apply for loan to support technological
advancements
2
6 Bank approves loan amount 6
7
Departmental heads hold meetings with their
individual reporting employees 1
8
Training of employees(managers and subordinate
employees) on risk management 2
9 Acquisition of resources of implementation plan 6
10
Implementation of risk management by lower level
employees 6
11
Monitoring and evaluation of risk management
implementation based on risk matrix 12

14MCVILLE’S RISK MANAGEMENT
12 Further action 12

15MCVILLE’S RISK MANAGEMENT
Implementation activities
particulars
Apex managers hold
meeting with middle
level managers on the
risk management
implementation
Finance department
places the budget for
approval of the apex
management
Apex management
risk management
implementation
approves budget
Apex management
holds meeting with
the shareholders
Apex management
holds meeting with
bank officials to
apply for loan to
support
technological
advancements
Bank approves loan
amount
Departmental heads
hold meetings with
their individual
reporting employees
Training of
employees(managers
and subordinate
employees) on risk
management
Acquisition of
resources of
implementation plan
Implementation of risk
management by
lower level
employees
Monitoring and
evaluation of risk
management
implementation
based on risk matrix
Further action

16MCVILLE’S RISK MANAGEMENT
Conclusion
The implications of the study pints towards the fact that McVille’s have undertaken an
effective process for managing the risks that are involved with the case. The identified risks at
the Hurley café points towards the fact that there is a need for some important changes upon
rebranding the Toowloonga branch of the café. It is important to understand that the management
need to take important steps towards ensuring that all the major risks that were identified are
covered effectively through the new strategy for development. The risks have been effectively
identified and evaluated. The legal risks and the environmental risks become very important in
developing a better risk management plan.

17MCVILLE’S RISK MANAGEMENT
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