Risk and Crisis Management: Strategies to Mitigate Impact

This study explores the risks faced by KFC, including human, technological, and external factors, and provides strategies and action plans to mitigate their impact. It emphasizes the importance of risk and crisis management in ensuring the efficiency and profitability of the company.

Risk and crisis management
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Executive Summary
Business risk hinders the efficiency of company to provide adequate return to investors as well
as stakeholders. It comprises risk relating to internal as well as external factors. Present study
emphasizes on risk which are deal by KFC i.e. risk relating to human factors, technological
factors which are internal factors. Further external factors i.e. risk relating to economic variants
has been also assessed in detail manner. Eventually strategies have been provided along with
action of plan in order to eradicate the impact of specified risk.
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Table of Contents
Introduction......................................................................................................................................4
Risk summary..................................................................................................................................4
Risk 1...........................................................................................................................................4
Risk 2...........................................................................................................................................5
Risk 3...........................................................................................................................................5
Timeframes of each strategy............................................................................................................6
Plan of action...................................................................................................................................7
Conduct of brief business impact assessment if the risk occurs......................................................8
Conclusion &Recommendation.......................................................................................................8
References......................................................................................................................................10
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Introduction
Risk and crisis management is the process of recognition, assessment, as well as prioritization
which is done by synchronization of resources towards reducing, supervising and managing the
possibilities of effects of adverse proceedings. For overcoming the issues the factors that highly
impact the company should be ascertained and in addition the reason behind same should be
assessed. The same will support in developing strategies for solving the crises and other issues.
The company can gets success only when it performs well and deal with the risk in appropriate
manner. Present report emphasizes on the issues and risk with which KFC deals in order to
ascertain the strategies which can be applied to eradicate the impact of same. Further, timeframes
for all the strategies along with action plans have been discussed to solve the issues in
appropriate manner. Lastly, assessment of impact on business in case the risk arise has been
specified in order to analyze the specified scenario in detail manner.
Risk summary
Risk Summary Table
Risk
Category
Risk Type Stakeholders
Affected
Likelihood
Rating
A-F (Low
to High)
Consequenc
e Rating
1-6(Low to
High)
Risk Control Method
Internal
Factor
Human factors Employees A 1 Process/Equipment
Technological
factors
Customer B 2 Substitution as well as
purchase of new
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Sponsor equipment
Physical
factors
Employees D 4 Substitution
External
Factor
Economic
Factors
Investors
Shareholders
Sponsor
Owners
F 6 Engineering
Natural
Factors
Customers
Franchise
holders
C 3 Monitoring
Political
Factors
Sponsors
Customers
Suppliers
E 5 Administration
Risk 1
Human factors
Health and safety issue regarding employees are faced by KFC in significant manner. The risk
which are to be considered in case of KFC regarding human factors are falls and slips, cuts and
lacerations as well as burns and many more. In order to reduce the certainty relating of the
injuries at the workplace it is essential to have a practical state of mind and actions must be taken
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to develop a secure environment for employees. If workers are secured than it will positively
affect the productivity and same will eventually profitable for organization. It is very essential to
train the workers within the organization so that they can use correct techniques and stay away
from the dangers (Krauskopf and etal., 2017). By offering the education material workers can be
educated in the effective way so that they recognize the threats and unlined the ways to carry out
their job without any issues. Other issues such as illness and injuries are adverse side effects of
the workplace accidents and can be exist anytime. There are no techniques that help to eliminate
the risks completely however, some steps can be taken to reduce them and that can be done by
developing polices of preventing actions such polices on other hand helps to create a save
working environment (Kreibich, Bubeck, Van Vliet, and De Moel, 2015). Camps or small
sessions could be held in order to make employees learns about the methods of dealing with
situation relating to risk or danger. Even dummy sessions relating to risk scenarios could be
practiced by employees in order to make them efficient in dealing with such situations.
Risk 2
Technological risk factors
The main issue relating to technological factor with KFC is that the company is very backward
regarding adoption of new technologies. Due to same company has been losing customer and
had not been able to compete with its competitors adequately. Operating a company in the digital
world comprises various inherent risks. As there is a risk of cyber theft, loss of data as well as
mismanagement of the software processes. In order to eradicate the impact of some precaution
such as antivirus software’s, password security for the Wi-FI networks of the company. Security
cameras help the company to stop the criminal proceedings and theft. KFC should adopt
technologies such as e-payment, online order of goods, providing offers on social sites by
developing its own page. These measures will assist the company in increasing existing customer
satisfaction level as these initiatives will lead to provide service with an ease to customers. Thus,
it will be beneficial for both customers as well as KFC.
In addition cyber liability insurance can be also done for dealing with the technological risks can
be done. In case the computer system is hacked and important information for example
consumer’s credit card number is stolen, than cyber liability insurance will assist with the cost of
consumer notification, proceedings as well as credit supervising. For the stable growth and risk
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free environment it is important to maintain the latest equipments so that appropriate services
could be provided to customers. It is important to check the malfunctioning of the refrigeration
unit, heating equipments in order to prevent accidents. For overcoming from the risks of the
technology it is very important to provide training to the employees relating to technique.
Risk 3
External risk factors (Economic, Natural and Political)
It is essential for every restaurant to demonstrate its arrangements as well as food management
procedures in adequate manner. In order to assure same it is necessary to represent that they are
operating at a safe place. Food hygiene is essentially to be considered in order to assure that
products delivered by the company are healthy and hygienic. Natural risk factors affect the
company as it provides chicken related product in significant manner. Thus, it is necessary to
make adequate measure that no loss relating to raw material should be done. The reason behind
same is decreasing quantity of chicken which eventually affects the price of products provided
by company (Chicken chaos as KFC closes outlets, 2018).). It is necessary to assess the quantity
before being cooked on daily basis. Moreover, through analyzing previous trends analysis can be
made relating to days on which there are major sales and days on with limited order are received.
Through this analysis wastage relating to chicken (raw material) could be reduced to significant
extent. (Nieves, and Segarra-Ciprés, 2015).
The company can adopt practices of providing extra incentives to develop food of high quality to
their workers. The major objective of authorities should be to ensure the working place is clean
and well balanced (Termeer, Dewulf, Breeman,and Stiller, 2015). In order to get rid of the
natural risks such as dirt, pests,cross infectivity, disease- causing organisms it is important to
store food safely. Further, to resolve other economic risk it is necessary to emphasize on market
trends and customer choice. It would be appropriate for KFC to keep a watch on its competitors
in order to assess the trend followed by them. Even, suggestion from customer can also be taken
regarding likes and dislikes relating to services provided by KFC. Through customer survey
company would be able to assess the areas which are required be improved in order to enhance
the existing customer satisfaction level ( Weaver, 2019).). Other factors like design of food
preparation area, equipments, water supply, personal hygiene, temperature, food, defrosting, pest
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and pet control should be considered in order to develop an hygienic surrounding in each
restaurant of KFC (Slovic, 2016 ).
Timeframes of each strategy
Particular Time Frame Funds Responsible Stake
holder
Future action
and other
specification
Risk relating to
human factor
Risk relating to
human factors can
be easily resolved
in comparison to
other factors.
Even the strategy
will require time
period of four to
six week in order
to implement the
changes.
Adequate
financial
resources will be
required for
providing trainee.
As, company
would require
appointing
professionals in
order to make
their employees
more efficient and
effective
Human Resource
Department could
be held for
responsibility of
assessing the skills
which are to be
improvised in each
employee in order
to assess the
required training
relating to same.
By motivating
and providing
training to
employees
within the work
place the
company would
be able to
eliminate the
human risks
easily from the
organization.
However it is
necessary to
continue these
practices as
perfection can
only be attained
through
repeating
strategy along
with inclusion
of required
changes in same
(Lynch, Brooks-
Cleator, Giles,
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and Rumford,
2019).
Technological risk According to
Halkier, (2016)
recovering the
technical risks
factor is not an
easy task. The
timeframe for
implementation of
strategy will be
approximately two
month as the
technology will be
implemented after
assessing the trend
of the market as
well as
requirement of the
customer.
The quantum of
financial
resources required
for
implementation of
technology will be
dependent on the
technology
adopted by the
company.
The specified
procedure relating
to assessment would
be conducted by
manager of the
company as he is
aware of financial
position of the
company as well as
needs of the
customers
It would be
more
appropriate to
accept those
software
techniques
which are easy
acceptable by
the employees
and require
reasonable
funds for
implantation
and purchase of
same.
Economic Risk In terms of natural
risk factors
timeframe that is
approximately six
months. As one
cannot change the
whole
environment in
short span of time.
KFC would
require to
adequate funds in
order to purchase
equipments for
making
environment more
hygienic.
supervision
manager could held
responsible for
assessing whether
the strategies
framed have been
followed by the
employees or not
It can be
assessed that
analysis that
whether
practices and
policies are
continued or not
is more
important than
funds for
eradicating risk
relating to
economic
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factors.
Plan of action
After assessing the problems and risks due to the internal as well as external factors such as
human risks, technological risks, political risks and natural risk which affect the business
adversely, a plan of action is required to be developed in order to mitigate impact of specified
risk. (Kliem, and Ludin, 2019). Plan of action for risk with which KFC deals is as follows:
 Defining the current potential causes and accepted solutions for tracking the issues in the
field.
 Making sure that authorities as well as mangers follow the procedure to overcome the
problem by conversing action plan
 Track the issue and research about the initiate phase when the risk arises and recognize
the issues are keep on going with the flow to pinpoint the source (Lundgren, and
McMakin, 2018).
 After recognizing the issues strategies should be implemented by the authority to solve it.
 At last clearly communicate the strategies and policies so that the levels of risk get
decreased in future (Reason, 2016).
 Further the last step relating to feedback and reassessment of applied strategy is to be
conducted in appropriate manner. As it will assist in ascertaining the extent of efficiency
with which strategies have been applied as well as the areas which are required to be
improved.
Conduct of brief business impact assessment if the risk
occurs
It is assessed by Sadgrove, (2016) that it is important to analyze the impacts of risk on business
in a continue manner. By understating the probable risks of the company and searching
techniques to reduce their effects management is able to ascertain the manner in which it could
be overcome. However, it is not possible to mitigate every risk to negligible as the external
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factors are not in control of organization. Thus, even after application of adequate strategies risk
occurs than same will affect efficiency of employees as well as profits of company. It will act as
a lesson for company in ascertaining the areas in which it lacked. Further, new strategies will be
developed in accordance with requirement of current scenario and same will be analyzed on a
continue basis to ascertain whether it is appropriate for mitigating risk or not.
Conclusion &Recommendation
From the present discussion it can be concluded that significant risks are faced by company
which are relating to external as well as internal factors. As per above analysis it can be stated
that company should build a strong management plan to overcome with the situation of risks.
Further, it is necessary to ascertain the timeframes of each strategy in order to ascertain the span
of period required for resolving the issue. It is recommended that company should comply with
the specified action plan in order to eradicate the impact of risk relating to internal as well as
external factors. Further, it is necessary to emphasize on feedback and analysis of compliance of
developed strategy in order to decrease the impact of risk to significant extent.
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