Risk Management Plan for Town and Country Construction Services

This paper discusses the risk management plan for Town and Country Construction Services, which is expanding its business in four different states of New South Wales. The paper includes a PESTEL analysis, goals and objectives of the business, deliverables of the project, critical success factors, stakeholders, and key findings. The key findings include cross-cultural issues amongst the internal employees of the organization as well as specific expectations of the consumer-base.

LEADERSHIP AND MANAGEMENT

Table of Contents
1. Introduction........................................................................................................................3
2. Stage One- Establishing the risk context and identifying risks..........................................3
2.1. Context........................................................................................................................3
2.1.1. PESTEL Analysis.................................................................................................3
2.2. Scope...........................................................................................................................4
2.2.1. Goals and Objectives of Business........................................................................4
2.2.2. Deliverables of Project.........................................................................................5
2.2.3. Relevance of Project with Goals and Objectives of Organization.......................5
2.2.4. Critical Success Factors.......................................................................................6
2.3. Stakeholders................................................................................................................6
2.3.1. Table of Stakeholders...........................................................................................7
2.3.2. Organizational Communication...........................................................................7
2.4. Analysis.......................................................................................................................8
2.4.1. PESTEL................................................................................................................8
2.4.2. SWOT..................................................................................................................8
2.5. Research......................................................................................................................8
2.6. Key Findings...............................................................................................................9
3. Stage two- Analyzing Risks...............................................................................................9
3.1. Risk Assessment Table................................................................................................9
3.2. Stakeholder Feedback..................................................................................................9
4. Stage Three- Identifying Measures....................................................................................9
4.1. Risk Management Plan................................................................................................9
4.2. Action Plan................................................................................................................10
4.3. Monitor and Evaluate Risk Management Plan..........................................................10
5. Stage Four........................................................................................................................11
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5.1. Report on the Implementation of the Risk Management Action Plan.......................11
5.1.1. Summary of Risk Plan Implementation.............................................................11
5.1.2. Summary of Actions..........................................................................................11
5.1.3. Impact on Risk Factors.......................................................................................11
5.1.4. Research Gap.....................................................................................................11
5.1.5. Recommendations..............................................................................................11
5.1.6. Risk Plan Effectiveness Analysis.......................................................................11
5.1.7. Evaluation of Risk Management Process...........................................................12
6. Conclusion........................................................................................................................12
References................................................................................................................................13
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1. Introduction
Risk Management is a complex process involving various levels of investigation and
assessment before providing appropriate measures that would help in controlling the impacts
of the risks. The concept of risk management, in business industries, has become increasingly
relevant, with the expansion of the business market and new entries of smaller organizations.
The initial step to risk management needs to identify and evaluate various risk factors and
prioritize them according to the objectives of the organization (Lam, 2014). Secondly, it
provides plausible solutions for the various identified risk factors and implements relevant
economic measures that would minimize their exposure to risks. Thirdly, it identifies the
particular ways through which the risk management could be made more sustainable. Instead
of a one-time solution, a good risk management plan aims at a structural change in the
organizational processes that would protect the organization from external threats or
challenges (Rodrigues-da-Silva & Crispim, 2014).
The Town and Country Services in New South Wales, is a large-scale Company providing a
wide range of construction services since 1973. The Company provides experiential as well
as practical guidance in architectural construction planning. The Company’s new venture in
the four different states of New South Wales—Orange, Bathrust, Mudgee and Wagga Wagga,
requires a solid and full-proof risk management plan, in order to ensure smooth execution and
delivery of services. This paper aims to investigate the context and organizational processes
of the objectives in order to identify the particular risks and also provide appropriate
measures for controlling them.
2. Stage One- Establishing the risk context and identifying risks
2.1. Context
Understanding the context of the particular industry of the Company is extremely necessary
as it forms the groundwork of the entire research with substantial information regarding the
external industry environment of the business. A PESTEL analysis of the market industry has
been conducted in order to identify the external factors that might affect the organization’s
performance (Rastogi & Trivedi, 2016).
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2.1.1. PESTEL Analysis
Political factors- The local governments of the chosen cities are highly supportive of new
business enterprises coming up in the market, which works as a positive factor for the
Company (Gray, Harymawan & Nowland, 2016).
Economic factors- As a central hub of most business is NSW, these cities are exposed to
further economic growth and prosperity, which is economically beneficial for a new startup.
Social factors- With improvement in economy and lifestyles, there is an increased demand for
professional guidance and elaborate planning in case of architectural designs for companies
or households.
Technological factors- The advancement in technology has exposed the consumers to world-
scale business market and raised their expectations in terms of service delivery.
Environmental factors- NSW is also one of the leading states facing stiff environmental
issues related to global warming and pollution. Business corporations need to be
environment-friendly in these areas (Akanni, Oke & Akpomiemie, 2015).
Legal factors- In terms of legality, the start-up businesses in these areas enjoy particular
privileges and legal support in order to encourage more business interactions.
2.2. Scope
Understanding and estimating the prospect of a business concept can be considered the scope
of the project. In order to clearly understand the scope of this Company expansion in 4
different states, we need to critically look at the main objectives of the organization,
estimated deliverables from the project, relation shared between the objectives of the
Company and its new venture, and its critical success factors.
2.2.1. Goals and Objectives of Business
2.2.1.1. Technological Innovation:
Improvising on the technological aspects of the organizational procedures is one of the chief
aims of the Company, in order to attract the modern day customers (Dong & Martin, 2017).
2.2.1.2. New Products or Services:
Enhancing the Company’s service-delivery by launching new, innovative products and
services, like providing a panel of architects as consultants for private or public constructions.
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2.2.1.3. Opening New Markets:
The Company aims to open new markets with the help of TCS, so that any consumer can
avail their services, without having to be physically present.
2.2.1.4. Organizational Structure:
The Company aims employ in both full-time and part-time basis. The professional architects
are on a part-time contract, where as consultants are hired on a full-time basis (Albers,
Wohlgezogen & Zajac, 2016).
2.2.2. Deliverables of Project
Deliverables is referred to the particular products and services, or quality of servicing that the
Company aims to deliver to its customers (Beltagui, Darler & Candi, 2015). The Town and
Country Construction Services is expanding its businesses over the states of Orange,
Bathrust, Mudgee and Wagga Wagga, with the particular deliverables as their end result:
 Providing relevant construction or architectural guidance from professional architects
(Zimmermann et al., 2015). This exclusive service would be available once every
week, where the potential clients—business or individuals, can get in depth
consultation services regarding construction purposes.
 Making systematic appointments and arrangements for meetings of the architects
with the local people.
 Drawing plans or designs for architectural structures—both governmental as well as
individual.
 Monitoring construction sites and on-going projects to ensure proper functioning at
all levels.
 Offering mediation services between clients and their local authorities regarding
disputes related to construction and planning. Offering all the services in return of
respective fees.
2.2.3. Relevance of Project with Goals and Objectives of Organization
As compared and contrasted against the particular goals and objectives of the organization,
the new venture reflects several areas that complement each other (Lamas Leite et al., 2017).
The new venture of expanding the business is another attempt at enhancing their product and
service-delivery, in order to achieve their organizational objectives.
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Technology: One of the strategies to improvise and keep up with the technological
advancements is to be creative and innovative in new business ventures in order to achieve
customer-satisfaction.
Service-delivery: With further expansion of business in new markets, the Company would be
able to enhance their service-delivery by adding more products and services to their
deliverables.
Business Market: The Company would successfully expand the territory of their business
market with new start-ups in different cities.
Organizational Structure: The Company would be able to support a mixed organizational
structure that employs both part-time as well as full-time employees.
2.2.4. Critical Success Factors
The critical success factors of the project, as analyzed against the Company objectives and
the external market industry are as follows:
 The growing business and economy in the chosen states for expansion indicate a high
chance of success in the field of construction businesses (Drew, Kortt & Dollery,
2017).
 The local governmental as well as legal support in the particular states works as a
huge benefit for the expansion of the Company.
 The rising demand for architectural consultation services makes up for a fairly large
customer-base.
 The employment of part-time professionals, who are highly skilled and in demand,
makes up for an appropriate business strategy with reduced impacts on the economy.
2.3. Stakeholders
A risk management procedure for a business organization requires us to think of the business
scenario from the perspective of each stakeholder in the organizational processes. The
stakeholders of the Town and Country Construction Services are briefly discussed below:
Clients or Customers: As the Company deals with providing construction services and
quality guidance in architecture planning, its success is heavily depended on the satisfaction
of the consumers. Consumers of the Company could either be individuals or contractors,
developers.
Suppliers and Contractors: Suppliers of intermediary raw materials or intermediary
services like transportation and delivery of products, play a very important role in the process
of managing organizational risks.
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Internal Personnel: Internal management authorities of the Company are an important
stakeholder as the strategy-building and decision-making responsibilities are carried out by
them.
Project Funding Body: External funding bodies, be it governmental or non-governmental,
are important stakeholders as they economically support the project in return of specific
gains.
2.3.1. Table of Stakeholders
Stakeholders Internal/External Role in Process Stake in Process
Customers External Creating demand for
the deliverables
Specific consumer
requirements and
expectations
Suppliers External Supplying
intermediary raw
goods or services
Providing raw
materials or
delivering finished
goods and services
Internal Personnel Internal Employment, Policy-
making, decision-
making, strategy-
building
Economic and other
value returns
Project Funding
Body
External Providing financial
support for execution
of processes
Benefits from
Company-profits
2.3.2. Organizational Communication
According to (Murata et al., 2017), in order to maintain a smooth communication and
understanding amongst the stakeholders of the Company, the following methods could be
used:
 Staffs: Introducing employee-oriented benefits and engaging them in organizational
processes apart from production.
 Internal and External Stakeholders: Holding periodic meetings and discussions to
incorporate the particular feedback and grievances of each internal and external
stakeholder.
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 Specific teams: Appointing managers for each team, who will be in charge of
maintaining coherence with the other teams in the organization and incorporate their
voices.
 Technical Experts: Allowing regular guidance and support with technical experts,
who can add value to the technological aspects of service-delivery.
2.4. Analysis
2.4.1. PESTEL
Political factors: The political stability and support in the chosen states of NSW, is a
beneficial factor in the project.
Economic Factors: The recent economic advancements not only created more affordability
for consumers but also further scope of investment.
Social factors: With improvement in lifestyle and expectations, demands for professional
guidance regarding construction services is on the rise.
Technological factors: Technological improvements in the field of construction services
prove to be extremely useful in achieving customer-demands (Abuelmaatti, 2014).
Environmental factors: High concerns regarding degrading environmental conditions are
unfavorable and need to be appropriately managed.
Legal factors: Adequate legal support for business start-ups is a huge bonus.
2.4.2. SWOT
Strengths: The particular areas of strength of this project include: an increasing consumer-
base, legal and economic support from government and improving social and economic
conditions of the market in general.
Weaknesses: The project requires heavy economic and intellectual investment, which might
be a burden to the Company along with the heavy production and delivery costs.
Opportunities: Implementation of relevant strategies and CSR policies would play a
significant role in the successful execution of the project.
Threats: Construction activities create further environmental damage, which becomes a
burden for the project objectives.
2.5. Research
Risk to the stakeholders is a threat for the organization (Shinkevich et al., 2016). The Risk
Management Policies and Strategies of the Town and Country Services emphasize on the
value of the stakeholders in the organizational processes. By keeping the interests of the
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stakeholders in the forefront, the Company aims to achieve a significant level of success in
managing and controlling the various risks to the organization and its stakeholders.
2.6. Key Findings
The key findings from the research of risk context are as follows:
 Cross-cultural issues amongst the internal employees of the organization as well as
specific expectations of the consumer-base.
 Economic challenges due to heavy economic expenditure, simultaneously in four new
start-ups.
 Undesirable environmental consequences caused by construction activities (Nesticò &
Pipolo, 2015).
 Inadequate time period required for a large-scale expansion project like this one.
3. Stage two- Analyzing Risks
3.1. Risk Assessment Table
3.2. Stakeholder Feedback
With the successful completion of the risk assessment procedures, it is important to discuss it
with the rest of the stakeholders of the Company. Since the Board of Directors would be
responsible for strategic and financial, engaging them in a feedback conversation retrieves
significant values. One important factor identified from the discussion is the preparation of
budget and cost-saving techniques that would allow them to execute the project in a limited
time-period (Islam et al., 2016). Taking into consideration the minutes of the discussions,
further strategies and action plan will be developed.
4. Stage Three- Identifying Measures
4.1. Risk Management Plan
Risk Assess Controls Monitoring Timelines Responsible
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Risk
(L, M, H,
E)
Insurance
risk
H The policies
must be
renewed
Proper
documentation
to be
maintained
Every year
ending
Financial
manager
Customer
dissatisfactio
n
E Feedback to
be gathered
To ensure the
need of the
customers are
heard
All the time Customer
relationship
manager
Spilling of
water
M Proper
pipelines to
be
maintained
To ensure
there is no
leakage of
water
All the time Operational
manager
Electricity
hazard
L Proper
electricity
powerpoint
to be
installed
To ensure
there is no
naked wire
Twice in
every year
Operational
manager
4.2. Action Plan
 In order to successfully implement the risk management plan, the strategies need to be
clearly communicated to the various stakeholders of the organization.
○ Employees must be clear about Company objectives so that they can fully
understand what is expected of them.
○ Suppliers must have a fair understanding of the risk management practices.
○ Investors in the business should be aware of the risk factors and the management
efforts.
● The official documents of the risk management plan will be available at every office for
further guidance and reference of the stakeholders. It would be securely uploaded on
the online website for easy access from anywhere at any time (Islam et al., 2016).
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● Sustainability measures for the risk management plan would infer regular monitoring at
various construction sites, offices and meetings with external stakeholders, in order to
maintain the relevance of the plan by adapting it with the dynamic external
environment (Coombs & Holladay, 2015).
4.3. Monitor and Evaluate Risk Management Plan
The Risk Management Plan developed from the assessment of various threats and
opportunities of the Company, as against its contemporary market position, needs to be
evaluated and monitored closely before proceeding for implementation Mahmoudi et al.,
2014). Besides the theoretical perspectives, there are significant loopholes in the practical
narrative, which needs to be considered before implementing the practices. In order to
properly evaluate the risk management procedures, they must be thoroughly checked with the
contemporary real-life business scenarios, including existing competitors, entry of new
entrepreneurs in the industry, cultural acceptance of the consumers and mutual profit of all
the stakeholders.
5. Stage Four
5.1. Report on the Implementation of the Risk Management Action Plan
5.1.1. Summary of Risk Plan Implementation
Due to heavy torrential rains, the new office in Wagga Wagga experienced considerable loss
of property. In spite of implementing strategies like buying insurances for risks in new
premises, the strategy failed as the insurance did not cover storm damages.
As the risk plan had identified the issue of not being able to afford full-time professional
architects, the initial strategy was to fill the vacancies with available employees from the
Head Office; however, none of the employees are available for more than a week.
The plan had also identified risk of issues related to the local councils’ compliance to
adopting new measures and practices. This issue was faced in Orange, as the local council
denied permit to have building over 8-storey.
5.1.2. Summary of Actions
● The Company has applied CSR policies and included insurance coverage for damages
caused by environmental calamities (Khalid & Shafiai, 2015).
● The Company is hiring new employees through online websites like seek.com.au.
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● The Company is encouraging customers to use private certifiers for easier certification
processes, as per the strategies in the action plan.
5.1.3. Impact on Risk Factors
Though some of the risk factors could not be properly mitigated yet, some of the risks like
environmental consequences are now in better control.
5.1.4. Research Gap
Practical loopholes like delays in certification processes were overlooked, which can be
controlled by adhering to environment-friendly guidelines.
5.1.5. Recommendations
The risk management plan needs to be more inclusive of practical loopholes and
environment-friendly guidelines (Kulczycka & Smol, 2016). They should better analyze
future threats.
5.1.6. Risk Plan Effectiveness Analysis
The Risk Plan was partially effective in the given scenario, as some of the issues remained in
the processes, which caused considerable loss of time and resources.
5.1.7. Evaluation of Risk Management Process
The chosen evaluation process was conclusive of particular risk management strategies but it
failed to achieve the objectives completely due to certain gaps and loopholes in the analyzing
process.
6. Conclusion
To conclude, the development of a Risk Management Plan for the Town and country Services
in NSW required to undertake several processes in order to thoroughly understand its context,
critically analyze its opportunities and threats, and finally devise relevant strategies and
action plan to implement the required changes in the set-up, to control the impacts of these
threats. A PESTEL analysis on the contemporary market environment has been conducted to
understand the business market, its consumers and their expectations.
The derivations from the PESTEL analysis helped in deriving the particular Strengths,
Weaknesses, Opportunities and Threats (SWOT) of the Company, completing a thorough
analysis of internal factors. By using the derivations from the PESTEL and SWOT analyses,
this research aimed to look at the given scenario from the perspective of a risk manager,
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venturing in new projects in four different cities. The identification of the particular risk
factors helped in devising appropriate strategies that can mitigate or control the risk and their
impact on business. The risk assessment procedure arranges the risks on a basis of priority.
Finally, an action plan is laid out and discussed with the stakeholders for evaluation of the
plan and further amendments.
However, during the implementation process, a number of loopholes could be found in the
strategies, which led to dire consequences. Therefore, the research identified the particular
gaps in the assessment and provided further recommendations to make it full-proof.
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