Risk Management Strategies and Evaluation Plans

This assignment discusses the importance of risk management in businesses, focusing on assessing and managing risks through effective working and monitoring. It emphasizes the need for an appropriate and suitable evaluation plan to deal with various constraints related to employees and environment, aligning with current risk management standards. The assignment highlights the value of risk management in achieving business success and survival in a competitive world.

Manage Risk

Table of Contents
INTRODUCTION...........................................................................................................................1
Section 1...........................................................................................................................................1
Risk management Plan...........................................................................................................1
Section 2: Risk Identification..........................................................................................................4
Section 3: Risk Analysis and evaluation..........................................................................................6
TASK 2..........................................................................................................................................10
Evaluation report..................................................................................................................10
REFRENCES.................................................................................................................................13

INTRODUCTION
Risk management is important for an organisation in order to manage all task with in as
well as outside firm. It is refers to identification of potential risk in advance, analysis and take
action to reduce hazard which helps to manage all work in future in an effective manner.
Through effective risk plan enterprises are able to gain high market share as well as reduce issues
(Hillson and Murray-Webster, 2017). In this report SmarTech firm are select to analysis impact
of risk on an organisation performance and productivity. It is a Australian technology firm and
they produce smartphone, tablets and many more. They are manufacturing their good form chine
because of low production cost. It is established in the year of 1980. In in this report includes
manage future risk and identify its factors. Assignment covers risk analysis as well as evaluation
and treatment.
Section 1
Risk management Plan
Scope of Risk management plan
Risk management is a very important aspect for any business. It is very essential that
business manager manages risk in an efficient way. Risk as well as uncertainty is inevitable and
it can not be underestimated by any firm. Every specific project contains various types of risk
and uncertainties in it and there is a need to include as well as determine all the major risks and
factors properly so that chances of getting a positive and favourable result becomes even more.
The onus is on project manager that a suitable plan is formed for effectively managing the risk of
projects. The scope of Risk Management is quite wide and a management will have to make sure
that various risks that are involved in both external and internal environment are properly
managed. The risk can be divided into two parts External Context and Internal Context (Haimes,
2015).
External Context: This would include the social environment that prevails outside the business
like the demand of consumers, their preferences, cultural risk and the risk of demographic
changes etc. and Risk in Business environment like risk of high cost of obtaining raw material,
Gap in demand and supply etc.
Internal Context: This would include the risk that prevails within the organization like what are
the objectives that needs to be achieved by SmarTech for future and where company stands right
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now. The governance structure of the company also plays a important part in assessing risk.
Recording those risk in a paper form is essential and thus a company or an organization usually
uses a risk register as a source of documentation for the purpose of recoding various types of risk
that are involved in execution of certain projects. Policies of a company can also be framed by
assessing various risks.
Internal and External Stakeholder Analysis
Internal stakeholders are those people who are directly have a stake in success and failure
of an organization on the other hand external stakeholders would include people who affects the
organization externally and can decide the fate of organization, if there will a significant changes
in external environment. It is very important to understand the various objectives of stakeholders.
It is quite crucial that a proper analysis of both the stakeholders is done way before so that the
level of risk from both and how these can affect business functions are properly identified way
before (Glendon, Clarke and McKenna, 2016). This analysis would include, getting familiar with
legislation, getting up to date regarding the trends of industry etc.
Industry Analysis of SmarTech
Proper analysis of the industry in which the company is prevailing is necessary and thus a
analysis of various elements of the industry for SmarTech is done as follows:
Social:It includes changes in demographics like population growth, age profile etc. It also
includes the cultural differences among people in a region etc.
Technological: This would include the various techniques and technology that can be adopted
by management of SmarTech for improvement in its manufacturing distribution as well as
logistics.
Economic: The health of economy in which the company is operating also plays a important in
deciding the future of company. Whether the growth is on rise, decline etc. Proper analysis of
exchange rate that are prevailing is also a matter of importance for company as it want to grow
globally through exports. Whether it is profitable for company to operate in current economic
scenario (Hoyt and Liebenberg, 2011).
Legal and Political policy: The legal regulations that prevails in the country and various laws
framed by political people will have a direct impact on SmarTech and its policy framing.
Expectations of changes in regulations and laws in the future etc.
Strengths and Weaknesses of Current Arrangements
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Weaknesses 1.The company is not big enough
to compete with its competitors
in an effective and efficient way.
2. The pricing of its products as
well as services are not up to the
exceptions of customers and
therefore it is lagging behind.
3. The Company lacks efficient
managers for the purpose of
managing the company in
adverse situations (Merna and
Al-Thani, 2011).
Recommendation
1. SmarTech should
increase the size of its
business by infusing
necessary funds into the
company and this will
help the company in
expanding the business
and competing in
market efficiently.
2. The company should
make sure that the
overall pricing of its
products remain
reasonable for
customers, so that
business can grow over
period of time.
3. SmarTech can hire
managers from its
competitors by giving
them necessary
emoluments and
Strengths 1.The company is having good
market penetration among
consumers.
2. It is known for the uniqueness
it offers in various products.
3. Because the size of company is
relatively small, it can experience
a substantial growth initially.
Contribution 1. This has contributed
to growth of company.
2. The company is able
to build its brand
among consumers due
to its uniqueness.
3. The initial growth
can help company to
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grow faster in future as
well (Furstenberg, and
2012).
Critical Success Factors
There are some critical factors that are essential for success of an organization. If a company
does not have those factors within itself Communication: It is very essential for growth as well as development of company.
Without it the company wont be able to communicate well among its members and
stakeholders. Organisation Structure: It means how the organization is designed. Organisation Culture: It refers to the culture that prevails within organisation. Trust: If there will be no trust between the members of company among each other, then
the company may end up in a failure.
 Customer Service: It refers to giving customers the kind os service that they expect in a
qualitative and unique way (WallmanFolio Trade, 2012).
Section 2: Risk Identification
Risk can tell before coming and this can be large or big accordance to this it give impact
on business (Hillson and Murray-Webster,2017). Identification of Hazards is important so
Smartech can take several steps for minimising its negative impact which is important for
remaining in business environment which is full of competitions. The same can be of several
type such as financial, technology, schedule, health and safe working, external environment and
many more others. Along with this risk management process consist of four steps such as; risk
identification, assessment, response development, response control.
Purpose of risk identification are stated below:-
 Minimize negative impact.
 Maximize positive impact (Haimes,2015).
 Improves the chances of project success.
 Risk determination is to give information or data for the next step of the hazard
management (Solomon and Deray, 2016).
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Process of Risk identification:-
 Creating a systematic process- Identification of risk procedure start with objective and
project successful factors. Because before starting something there is requirement of
knowing them in well manner (Williams, 2011).
 gathering information from various sources- for effective risk management there is
requirement of reliable and high quality proper information.
 Applying risk identification tools and techniques- which tool should have to apply is
totally depend on type of risk, its activity as well as organisational maturity level.
 Documenting the risk- determined hazards must be documented in risk register and a
breakdown structure, with its causes and consequences (Glendon,Clarke and
McKenna,2016).
 documenting the risk identification process- documented risk help In identifying them
if this is required in future.
 Assessing the process effectiveness- To modify it for future utilization, the affectivity of
the selected process should be critically assessed after the project is accomplished.
Techniques of risk identification:-
Risk Breakdown Structure:- when planning of project is going on to meet target for
quality, cost and schedule as well this is useful in determining likely hazards to the success of the
project (Hoyt and Liebenberg,2011). Finance related risk is identified I this. Instead of this,
which area of project require how much attention and special attention (Coppendale, 2012).
Way of using Risk Breakdown Structure is given below:-
 Risk Identification aid
 Risk assessment
 Comparison of project or tenders
 Risk reporting
 lessons learned for future projects
Root Cause analysis: this is most popular tool or technique used by people for
identifying that why risk occur first time at the place. Technology related risk is identified in this
method. this is the method through which company can reach to the root of problem
identification which is important for company to never go through any looses. There are mainly
three type of causes;
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 Physical causes- these can be tangible material item which is failed in some way.
 Human causes- Human causes is related to physical causes because people sometimes
do wrong whereas on other hand sometimes not (Furstenberg, 2012).
Organisational causes- company work with help of several process and strategy in which
decision making is done through people which is not always correct it may be faulty (Merna and
Al-Thani, 2011).
Section 3: Risk Analysis and evaluation
Risk Assessment Template
Risk ID Risk Risk Area Likelihoo
d
Impact Conseque
nce
Risk
Ranking
Risk
Level
01 Budget of
company
is not
enough for
meeting
all the
activities
Financial Rare extreme Their is
risk of
losing
market
share.
That why
Smartech
cannot
prepare
enough
budget for
their
activity.
Rare and
extreme
minor
02 High cost
incurred
for low
quantity
production
Financial unlikely light Because of
low
quantity
componen
ts,
manufactu
ring cost
Unlikely
and
extreme
major
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of product
can be
high.
Thus, its
selling
price will
be high.
03 Strees
related to
work
WHS Possible High For
launching
new
product in
short term
period
there is
requireme
nt of
employees
overtime
for
completin
g work on
time.
Possible
an d high
major
04 risk WHS possible Low Risk can
be
situational
at working
place this
may result
in harm to
health and
Possible
and low
minor
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safety of
individual
person.
05 High
competitor
s
Commerci
al/ market
Possible High Smartech
is not
famous
company
for their
smart
watches
because of
that their
will be
low sale of
their
products.
Likely and
high
catastrophi
c
06 High
selling
Commerci
al
likely Extreme Sales is
not
reaching
to its
target
plan.
Possible
and
extreme
catastrophi
c
07 Delivery
of project
is low
compare
to its
demand
Operation
al
possible Extreme Because of
external
requireme
nt cost of
many
things may
rise.
Extreme
and
unlikely
major
08 Sharehold Operation Unlikely extreme Sharehold Rare and catastrophi
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ers
approval
are not
gained and
failed in
that
al ers are not
agree with
their plan
because
this may
not be
effective.
extreme c
09 Project
approval is
not getted
on time
Schedule Rare extreme Project is
behind the
schedule,
which
result in
losing
market
share.
Possible
and
extreme
minor
10 Failure in
completin
g
Schedule rare Moderate Stakehold
ers are
unhappy
because
they don't
get happy
on the
time.
Rare and
moderate
minor
11 Failure in
software
and
hardware
Technolog
y
rare Low Hardware
and
software
failure
which
direct give
impact on
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failure in
getting
informatio
n (Brewer,
Jackson
and
Moser,
2011).
12 Fail in
applying
the latest
IT system
and
technolog
y.
Technolog
y
Unlikely Moderate Smart
watches is
new
product of
company
which face
many
difficulties
.
13 Internation
al trade
agreement
s
External
Environm
ent
rare High Internation
al trading
may effect
the policy
and
revenue of
company.
14 Modificati
on in other
country's
governme
nt
External
Environm
ent
possible Extreme Governme
nt policy
change
gives
impact on
working of
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company.
TASK 2
Evaluation report
This evaluation report is based on Smartach Company whom are one of solution based
company used to develop software. They need to understand the project of risk assessment in
better frame so that beneficial gains could be estimated. Following are several number of
questions which used to address through this evaluation report in better and signified manner:
 Risk management plan in one of the important activity for every business organization to
reduce uncertainty within the company. Basically the reaction towards the risk
management plan is effective because it define various ways to eliminating as well as
reducing all the threats and at the same time also increase the positive impact on project.
With the help of this manager of SmarTech’s easily improve the overall performance of
the company in most effective manner. In addition of this, the manager of the project is
highly responsible in which he/she show their reaction and tries to reduce the
unfavourable impact in order to enhance the profitability level (Godin, 2014).
 Risk management process consider as an important activity in which manager of the
company improve their overall performance level at workplace by eliminating the
chances of arising any kind of issues and uncertainty in most effective manner. In this
context, manager of the project use various effective strategies to maintain their
performance level which may leads in attaining positive results. Along with this, manager
also tries to to manage all the risk factors by effectively examine its factors which may
leads in attaining better ways to enhance organizational performance and also manage
workers to attain positive outcomes.
 It is important for every business organization to develop an effective risk management
plan which aid in developing better process to reduce the risk factors and enhance their
quality working of the business organization in appropriate way. With the help of this
manager of SmarTech’s easily take right decision in order to attaining positive outcomes.
In this context, it define effective ways to implementing all the activities of risk
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management plan which may leads in reducing the chances of arising any kind of risk
factors in most effective manner. It directly contribute in developing appropriate
working environment at workplace. Along with this, firm attain better success at market
place.
 The recommend area which need to improve through this risk assessment is to gain better
outcome. A major thing which need to improve which related with the employees. Here
company need to motivate their staff personnel properly so that they could gain beneficial
aspects. Another issue is of risk associated with owners where sometimes, individual
used to shut down their business projects or operations. This need to understand properly
by assessing risk and other considerations so that effective outcome could be underpin
and estimated. This will support Smartech to deal with various kinds of issues and
problems in better manner.
 Yes, this risk assessment plan reflect the realities of the environment where chances of
ethical and environment harm issues are determine more and more. Like, they reflect the
problem related with industry sources where machines and other consideration used to
harm the environment. Such risk need to assess and understand by managers of a
company which further enable them to deal with them. Hence, such realities of
environment need to manage in better and supportive manner which used to restrict
business in better and effective working as well as monitoring.
 By assessing the risk in better and effective manner, a business could become able to
manage and deal with various constraints properly. The evaluation plan will used to
define about the issues related with employees, environment properly. Thus, management
need to align their risk management strategy with current risk management standard so
that chances of future and unfavorable certainties could be deal out. Although, a risk
management outcome need to be improve in definite course of moment so that better and
supportive gain could be evaluated. This will enable them in dealing and defining better
and effective outcome. Thus, an appropriate and suitable evaluation of plan is really
important and essential for business and its related success and survival at keen
competitive world (Godin, 2014).
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REFERENCES
Books and journals
Hillson, D. and Murray-Webster, R., 2017. Understanding and managing risk attitude.
Routledge.
Haimes, Y. Y., 2015. Risk modeling, assessment, and management. John Wiley & Sons.
Glendon, A. I., Clarke, S. and McKenna, E., 2016. Human safety and risk management. Crc
Press.
Hoyt, R.E. and Liebenberg, A. P., 2011. The value of enterprise risk management. Journal of
risk and insurance. 78(4). pp. 795-822.
Merna, T. and Al-Thani, F. F., 2011. Corporate risk management. John Wiley & Sons.
Furstenberg, F.F., Belzer, A., Davis, C., Levine, J.A., Morrow, K. and Washington, M., 1993.
How families manage risk and opportunity in dangerous neighborhoods. Sociology and
the public agenda, pp.231-258.
Wallman, S.M., Folio Trade LLC, 2002. Method and system for enabling smaller investors to
manage risk in a self-managed portfolio of assets/liabilities. U.S. Patent 6,360,210.
Solomon, R. and Deray, G., 2006. How to prevent contrast-induced nephropathy and manage
risk patients: practical recommendations. Kidney International, 69, pp.S51-S53.
Williams, C., First Data Corp, 2011. Device with GPS to manage risk for financial transactions.
U.S. Patent 7,945,494.
Coppendale, J., 1995. Manage risk in product and process development and avoid unpleasant
surprises. Engineering Management Journal, 5(1), pp.35-38.
Furstenberg, F.F., 1999. Managing to make it: Urban families and adolescent success.
University of Chicago Press.
Brewer, E., Jackson, W.E. and Moser, J.T., 2001. The value of using interest rate derivatives to
manage risk at US banking organizations. Economic Perspectives-Federal Reserve
Bank of Chicago, 25(3), pp.49-65.
Godin, P., 2004. 'You don't tick boxes on a form': A study of how community mental health
nurses assess and manage risk. Health, Risk & Society, 6(4), pp.347-360.
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