Risk Management Plan for CoffeeVille

This assignment delves into the development of a comprehensive risk management plan specifically tailored for CoffeeVille. The plan encompasses identifying potential threats, evaluating their impact, and implementing strategies to mitigate these risks. The focus is on minimizing negative consequences while maximizing opportunities for success. The report highlights key elements like control committees, safety programs, audits, and training to ensure the effectiveness of the risk management strategy.

Risk Management
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 2............................................................................................................................................3
Risk Analysis report, action plan and risk treatment...................................................................3
Risk Analysis Report...................................................................................................................3
Risk Management Action Plan..................................................................................................11
Risk treatment............................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14
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INTRODUCTION
Risk assessment procedure regards to the process of assessing the likelihood of different
risk contributing factors and measuring its possible impact on business operations. It helps
manager to prioritize their risk which can bring extreme level of negative impact towards regular
functioning. The present project report highlights the risk assessment procedure and its analysis
for CoffeeVille. It will be done by preparing risk matrix and accordingly necessary decisions will
be taken to combat possible threats and solid action plan.
TASK 2
Risk Analysis report, action plan and risk treatment
Companies just not only need to identify factors for arising risk but also need to analyze
its likelihood or occurrence so as to identify their consequences on business operations. With the
help of effective analysis, managers can take superior decisions and necessary actions to combat
risk and meet targets. Effective ways to treat risk in the best possible manner helps to minimize
hurdles and ensure successful operations (Poolsappasit, Dewri and Ray, 2012). With references
to CoffeeVille, its managers, directors and executives are responsible to evaluate factors
responsible for business risk and undertake several actions and decisions to treat risk in the best
possible manner. There are various steps involved in risk assessment procedure such as setting
objectives, identifying possible impact of risk on CoffeeVille’s business performance, setting
key prioritizing and taking actions to overcome such risk contributing factors. Moreover, at the
end, management must examine that what step they took did really worked or not to minimize
risk and accomplish targets. This step proves beneficial for CoffeeVille’s executives to identify
required modifications in the risk control planning and process so as to overcome barriers and
ensure successful operations.
Risk Analysis Report
Assessing likelihood of the risk occurring
Risk assessment is the process of analyzing the possibility of risk occurrences to assess
its likelihood and thereby taking appropriate actions to overcome this. In corporate world,
companies are facing different kind of risk due to number of internal as well as external variables
that are uncontrollable. Adverse or unfavorable changes in the market forces give rises to
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corporate risk, however, positive changes helps to conduct operation successfully (Teller, Kock
and Gemünden, 2014). There are ranges of techniques available to the CoffeeVille for risk
assessment such as brainstorming, inspective and audit, flowchart, dependency analysis, FMEA
approach, SWOT and PESTLE analysis as well. With reference to CoffeeVille, there are number
of risk contributing factors exists in the market such as banking risk, travelling risk, risk due to
non-compliance and threat of negative corporate image or brand reputation. At the inaugural
step, CoffeeVille requires to assess likelihood of risk occurrence so as to identify the reasons or
factors that can arises risk to the business and affect operations adversely (Glendon, Clarke, and
McKenna, 2016). Internal reports, expert’s opinion, competitors’ analysis, historical company
records and so on are several tools available to assess likelihood or occurrence of risk.
Risk likelihood descriptors
Rating Description Likelihood of occurrence
1 Almost certain Risk that incur frequently or very often
2 Likely Strong possibility that event may occur or may cause loss to
the CoffeeVille
3 Possible Risk contributing event may incur based on casual
occurrences in historical period.
4 Not likely Events that generally do not incur but there is very little
possibility of risk occurrences.
5 Rare Extremely unlikely but due to certain circumstances or
uncertain situation, event might be happen probably.
Risk consequences or likelihood analysis
Risk Rating Descriptors Reasons for risk occurrence
Banking
risk
4 Not Likely CoffeeVille’s cash handling authority is given to a
responsible or experienced person who carries out their
work accountability in the best manner. Proper cash
management, documentation, keeping money in safe and
lockers and regular monitoring helps to minimize
business risk due to cash theft and stolen activities.
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Manager’s
travel risk
3 Possible Physical injuries can be caused to manager while
travelling at various destinations for the business purpose
like marketing and advertisement and others (Bromiley
and et.al., 2015).
By-law
compliance
risk
5 Rare CoffeeVille follow all the legislations and regulatory
framework like taxation policies, environmental
principles, minimum wages, equal opportunity law, debt
covenants and many others. Moreover, it is not involved
in illegal and restrictive business practices which might
impact return adversely.
Loss of
brand
recognition
1 Almost
certain
Many-times, staff do not wear proper uniforms or do not
carry out functions accordingly to the set operational
processes and activities, which in turn, may results in loss
of brand recognition risk.
Assess consequences of risk occurrence
After identifying business risk, manager has to forecast its potential consequences on
business operations and activities so as to judge its future impact (Rampini, Sufi and
Viswanathan, 2014). Consequences of risk can be measured in different aspects such as
financial, reputational, legal, and operational and many others. With reference to CoffeeVilley,
consequences of identified risk contributing elements or factors are identified here as under:
Risk General Financial Legal Reputatio
nal
Risk
conseq
uences
Likeliho
od
Risk
matri
x
Loss of
brand
recognition
It may have
a significant
impact on
CoffeeVille’
s service
delivery
Alteration in
operational
processes
and system
has less
impact on
Breach of
operational
duties and
process may
bring legal
consequences at
It may
impact
reputation
adversely
to a few
1 1 1
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process and
regular
business
operations
like
utilization
of
resources.
financial
activities.
minor level extents.
Likely events Significant
level of
impact over
routine
functioning.
To some
extent.
Legal
consequences
exists at medium
level
It might
have
several
consequenc
es over
reputation.
2 2 4
Travelling
risk
It may
results in
personal
injuries to
the travelers
and as a
result,
operations
can be
influenced
negatively.
CoffeeVille
will be
responsible
to provide
medical
treatment
and cure
services to
the
manager.
Minor It may give
rises to
internal
issues.
3 3 9
Banking risk Theft of
cash may
bring
consequenc
es as
Liquidity
and
financial
issues exists
at
To some extent It is an
internal
business
problem
that does
4 4 16
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company
will not be
able to meet
their
operational
requirement.
significant
level.
not have
significant
level of
impact
over brand
reputation.
BY-law
compliance
risk
It may bring
organization
in
controversia
l issues.
It may
results in
high cost
due to fines
and
penalties
and decline
net return.
It is very high
because it is
directly
associated with
non-compliance
with laws and
results in
chargeable
penalties and
lawsuits.
It exists at
significant
level
because
penalties,
fines and
other
lawsuits
may
damage
internation
al
reputation.
5 5 25
By-law
compliance
risk
Develop a risk matrix to prioritize risk
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Risk matrix is used to present the outcome of risk evaluation and its possible
consequences, presented below:
Impact
Extreme (5) 5 10 15 20 25
Major (4) 4 8 12 16 20
Moderate (3) 3 6 9 12 15
Minor (2) 2 4 6 8 10
Insignificant (1) 1 2 3 4 5
Loss of brand
recognition
(1)
Likely
event
(2)
Manger’s
compliance
risk
(3)
Banking risk (4) By-law
compliance risk
(5)
Likelihood or occurrence of event
Risk impact/Probability chart
Risk priorities
Risk can be prioritized on the basis of risk metrix level, taking into consideration above
risk metrix, it can be seen that by-law compliance risk identified extreme level of risk
henceforth, it must be prioritized. However, risk for banking risk exists at moderate level so
second priority will be given to it. Thereafter, manager’s travelling risk and risk of other
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likelihood events exists at low level henceforth, considered less preferable over others. While, on
the other hand, loss of brand recognition is moderate henceforth, regular monitoring is
considered sufficient to minimize the occurrence of such events (Cole and et.al., 2013). After
pre-settlement of key priorities, it must be reviewed again within three or six month duration so
as to make necessary changes in the priorities to minimize the risk possibility.
Two options for risk treatment and its suitability
Risk Risk mitigation strategies Suitability
Banking risk  Proper arrangement of CCTV
footage
 Insure overnight cash holding
 Setting a special monitoring
committee like financial controller
CCTV and special committee
helps to monitor employee’s
activities and functions and cause
threat among workers so that they
will not stole cash.
Manager’s
travel risk
 Travellers’ safety programs and
policy
 Encourage workers for taking
appropriate health precautions
Safety programs raises awareness
among workers so that they will
follow necessary precautions.
By-law
compliance
risk
 Adhere to debt covenants, taxation
policies and regulatory framework
 External audit program and follow-
up policies (Bolton, Chen and Wang,
2013)
Compliance with the laws and
regulations and conducting
external audit helps to find out
failure, omission and wrongful
actions helps to follow up debt
obligations.
Loss of brand
recognition
risk
 On-site management
 Special trainings to store managers
and workers
Training helps to enhance workers
skills, capabilities and
competencies to a maximum level
so that they will follow business
policies and will be well-dressed
(Christoffersen, 2012).
Excessive use
of water
 Installing native plants to cut down This will be of highly appropriate
to reduce excessive use of water
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water use
 Teleconferencing system
 New process on water consumption
and
and reduce risk.
Explanation of the risk assessment procedure
At the initial step, I identified all the risk contributing factors by generating required
information from different sources. Thereafter, its potential consequences whether minor, major,
catastrophic, high and extreme has been identified. On the basis of likelihood and potential
consequences, risk matrix has been developed (Market timing, investment and risk management,
2016). Factors that identified extreme level of risk has given priority, however, all the other
elements that are considered less risky has given less priority. After it plan has been revised
according to the revised notes from the meeting so as to minimize risk and meet business targets.
Risk Management Action Plan
Risk Assess
risk
(Score)
Controls Monitoring Action
priority
(1-5)
Timeliness Responsible
Banking
risk
4 In order to
maintain
strict control
on the
banking risk
CCTV will
be installed
in the
premises.
Shift of
employees
will changes
in every 4
hours. This
will ensure
that
employees
will actively
do their job.
Through
CCTV
relevant
officer will
monitor
entire
relevant
operations
that take
place in the
premises.
With
passage of
time new
CCTV
cameras
will be
installed
in the
premises.
CCTV
camera will
be installed
in the 1
month.
Financial
controller of
the firm will be
responsible to
look after
entire
operations.
Manager 3 Travel injury Driver will Small With Manager of top
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travel
injury risk
risk is
possible and
in order to
prevent this
strict
instructions
will be given
to the
managers to
make use of
seat belts
while
travelling
through car.
ensure that
instruction s
are perfectly
followed by
the manager
while
travelling in
the car.
amount of
money
will be
given to
the driver
in order to
monitor
safety
behavior
of the
manager.
immediate
effect
relevant
policy will
be
implemented
at ground
level.
level will be
responsible.
By law
compliance
risk
5 Specific
managers
will be given
responsibility
to evaluate
the situation
and giving
legal advice
to the top
level
managers.
Relevant
managers
will identify
the business
operations
where it is
necessary to
follow
specific rules
and
regulations.
Managers
if think
that there
is need to
comply
with
specific
law will
contact to
the
relevant
managers
in order to
seek
advice.
With
immediate
effect
relevant
policy will
be
implemented.
Managers that
are responsible
for looking
after
compliance
with law will
be responsible.
Loss of
brand
recognition
1 Strict rule
will be
prepared
under which
it will be
necessary for
employees to
wear relevant
uniform.
Security
guard will
check
uniforms. He
will
communicate
case that is
related to the
breach in
rule to
relevant
manager.
Salary of
those
employees
will be
deducted
who will
breach
company
policy.
Same as
above.
Security guard
and manager
will be
responsible to
look after
effective
implementation
of relevant
policy.
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Risk treatment
After making risk management action plan, it must be implemented effectively so as to
reduce business and carry out operations successfully. With reference to CoffeeVille, if company
is facing brand recognizing issues, then this risk can be eliminated by conducting training
sessions and developing uniform policy and other employment requirement by which employees
are adhere. This policy will assist business to maximize the consequences of decreased brand
recognition and results in less risk and improved performance. Moreover, manager will monitor
and review the progress of the risk mitigation strategy on a constant basis helps to take necessary
actions and initiatives to minimize the risk occurrence. This in turn, company can carry out
operations successfully without any hazard.
CONCLUSION
Report concluded that risk assessment and treatment plan proves as a best and effective
way for the companies like CoffeeVille and others to minimize the possibility of risk and meet
targets. CCTC arrangements, controller committee, safety programme, audit and special training
events will be definitely assist CoffeeVille to curtail the risk contributing factors, which in turn,
company can easily meet their target and ensure long-run sustainability.
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REFERENCES
Journals and books
Bolton, P., Chen, H. and Wang, N., 2013. Market timing, investment, and risk management.
Journal of Financial Economics. 109(1). pp. 40-62.
Bromiley, P. and et.al., 2015. Enterprise risk management: Review, critique, and research
directions. Long range planning. 48(4). pp. 265-276.
Christoffersen, P.F., 2012. Elements of financial risk management. Academic Press.
Cole, S. and et.al., 2013. Barriers to household risk management: Evidence from India. American
Economic Journal: Applied Economics. 5(1). pp. 104-135.
Glendon, A.I., Clarke, S. and McKenna, E., 2016. Human safety and risk management. Crc
Press.
Poolsappasit, N., Dewri, R. and Ray, I., 2012. Dynamic security risk management using
Bayesian attack graphs. IEEE Transactions on Dependable and Secure Computing. 9(1).
pp. 61-74.
Rampini, A.A., Sufi, A. and Viswanathan, S., 2014. Dynamic risk management. Journal of
Financial Economics. 111(2). pp. 271-296.
Teller, J., Kock, A. and Gemünden, H.G., 2014. Risk management in project portfolios is more
than managing project risks: A contingency perspective on risk management. Project
Management Journal. 45(4). pp. 67-80.
Online
Market timing, investment and risk management. 2016. [Online]. Available through
<http://www.sciencedirect.com/science/article/pii/S0304405X13000494>. [Accessed on 8th
December 2016].
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