The Scope of Risk Management - Doc

Running head: RISKS OF TAKEOVERS
Risks of Takeovers
Name of the Student:
Name of the University:
Author Note:

1
RISKS OF TAKEOVERS
Task 1:
Answer 1:
MacVille was an Australian café serving high quality coffee and gourmet food based in
Queensland. The layout of the restaurant was that of café style environment where its staff
members served the customers. The vision of the café was to provide high uqlaity food products
and superior services to its customers to enhance their satisfaction. This focus on customers in
fact, formed a part of the values of the café alongside safety, teamwork and excellent
performance. The firm was expanding in Queensland and New South Wales. Paula Kinski was
the CEO of the firm. The firm had a very stringent risk management policy which functioned
under the supervision of the directors and senior managers (McNeil, Frey and Embrechts, 2015).
Answer 2:
Part a:
The risk management policy of MacVille Café was designed, managed and operated the
risks the café could encounter. The risk management policy of the firm functioned according to
the guidelines ISO 31000:2018 which replaced ISO 31000:2009. The policy embraced the apex
management, the store managers and the subordinate employees of the café. The risk
management policy of MacVille included WHS Policy, Harassment Policy and Return to Work
Policy. The purpose of the ISO 31000:2009 was to ensure risk management among organizations
functioning in Australia (iso.org 2018).

2
RISKS OF TAKEOVERS
Part b:
The scope of risk management in the role of assistant manager consisted of assessment of
the risk concerning newly acquired subsidiaries like the Hurley’s Café. The scope of risk
management of store managers then expanded to meeting and discussing the present risk
management standards in those subsidiaries with the finance, audit and risk management
(FARM) team. It also involved Goldsmith Partners in the capacity of legal advisors to MacVille
pertaining to risk management (Chance and Brooks 2015).
Part c:
The critical success factors of the risk management at MacVille Proprietary Limited
stood on two pillars. The first pillar consisted of strong support the junior managers and the store
managers received from the senior managers. Moreover, the firm had a FARM committee which
looked after the risk management both within the present business operations of the MacVille
and in the future acquisitions like Hurley’s Cafe. The second pillar of success of risk
management of MacVille was its strong communication network which allowed smooth
communication of risk related between superior and subordinate employees (Bromiley et al.
2015). The support and involvement of Paula Kinski provided a more profound base to risk
management of the company. The goals of the risk management of MacVille consisted of
minimizing of risks within its present business operations and also in case of future business
operations like Hurley’s Café.

3
RISKS OF TAKEOVERS
Part d:
Stakeholder Internal/external Role in process Stake in process
Management Internal Forms risk
management
policies
High
Employees Internal Executes the
strategies formed by
the management
High
Government bodies External Forms the risks
management laws
and policies which
are applicable on all
business
organisations
High
Subsidiaries External Contributes to the
revenue generation
of the company
Medium
Customers External Purchase food
products from the
café and generate
revenue
High

4
RISKS OF TAKEOVERS
Suppliers External Provides raw
materials to the café
for production of
finished goods
(food products)
High
Part e:
PEST analysis of Australia:
Political:
1. The government of Australia is
politically stable and makes laws for
the industries like food industry, to
which MacVille belongs.
2. The government forms laws pertaining
to areas like risk management and
acquisition of subsidiary companies
which provides guidelines to all the
business organisations.
3. The government provides support for
expansion of business by providing
facilities like footpath dining and
internet connection.
Social:
1. Australia has a large population of
aged and retired people who enjoy
dining at expensive café style
restaurants.
2. The Australian society is experiencing
increase awareness for environmental
aspects like wastage of water in
restaurants which in turn is
encouraging the government to form
laws to curb the practices.

5
RISKS OF TAKEOVERS
Economical:
1. Australia is economical strong which
means the Australians people,
including the retired people have
sufficient disposable income to afford
dining in café style restaurants.
2. The economy of Australia provide rich
network of banks which provides
financial support to the business
operations of companies.
3. The country provides sufficient
business expansion opportunities to
the business organisations by
acquiring other firms which increases
the assets in turn.
Technological:
1. The market of Australia is
technologically advanced which in
turn support the risk management
operations in the business
organisations.
2. The country provides the business
organisations with internet facilities
which enable them to develop a strong
information and communication
network to hold conferences between
the geographically distant locations.
3. The country provides scopes for
innovations even in the small
restaurants like Hurley’s Café.
SWOT analysis of MacVille:
Strengths:
1. MacVille has operations in
Queensland and New South Wales
which means the restaurant serves a
huge customer base which contributed
it with high revenue generation.
Weaknesses:
1. Its subsidiaries like Hurley’s did not
maintain high risk management
practices and their acquisition would
require huge investment on
MacVille’s part to beef up the risk

6
RISKS OF TAKEOVERS
2. Its acquisitions of Hurley’s Café
proved its strong capital base.
3. The company had strong risk
management system.
management of the former.
Opportunities:
1. MacVille can expand into new areas.
2. Introduce innovative food products to
suit the preferences of the different
customer segments like Australian
retired customers and tourists.
3. The restaurant firm can enforce its
own high risk management standards
on its subsidiaries as well.
Threats:
1. New laws like environmental laws to
check wastage of water in restaurants
enacted by the Toowoomba Council
would require the subsidiaries of
MacVille like Hurley’s Café to reduce
their wastage promptly. Non-
compliance of the subsidiaries would
ultimately attract penal charges for
MacVille since it is the holding
company (tr.qld.gov.au 2018).
2. New restaurants including
international chains are seeking to
enter its markets. They would
challenge the revenue generation and
customer share of the subsidiaries like
Hurley’s Café.

7
RISKS OF TAKEOVERS
Part f:
The research method to gain information on the SWOT and PEST analysis was
secondary research. It involved study of legislations, regulations and business environmental
factors including risks. The researcher has consulted a wide range of books, articles and official
websites of the Government of Australia to gain substantial information pertaining to the
mentioned areas (CODE 2014).
Part g:
An analysis of the risk management of Hurley’s Cafe reveals that there is gross lack of
concern from the side of the management of the café in the area. First, the café was run by family
members which also included the staff members. The restaurant lacked written employee
policies which left chances of future disputes over employment conditions and wages. The
wasted a lot of water which attracted environmental risks and left avenues open for attracting
penal actions from the Toowoomba Council. The family owing the Hurley’s Café did not
practice regular depositing of cash into the bank and there have been thefts. This exposed the
café before financial risks. The staff of the café did not market the products. Considering the fact
that new restaurant chains were eyeing Toowoomba, lack of marketing among the staff of Hurley
presented risk of restaurant losing its customers to these new restaurants (Oh and Oetzel 2017).
Thus, this situation presented sustainability risks before the Hurley’s Café.
Risks Particulars Stakeholder concerned
Financial risks The earnings were not
dropped into banks on regular
basis.
Employees, management of
MacVille Café and Hurley
Cafe
Wastage of water Water was wasted The Toowoomba Council,

8
RISKS OF TAKEOVERS
MacVille Café, society
Employment policies not
written
The family held no written
records of the employment of
its employees as many of
them were family members
MacVille on acquiring
Hurley’s Café would require
to form new employment
contracts which may lead to
conflicts.
Sustainability risks Lack of marketing from the
Hurley’s Café against newly
arriving restaurant chains
MacVille would have to
spend immense amount of
money to market the products
of Hurley in the initial stage.
Answer 3:
New Message
September 2, 2024
From: Ash
To: James Mansfiled, Ron Langford
CC: CEO - P. Kinski
Subject: Risk conditions at the Hurley’s Café
Dear Sir/Madam,

9
RISKS OF TAKEOVERS
Please find attached a table highlighting the risk management conditions at the
Hurley’s Café, which MacVille is looking forward to acquire.
Risks Particulars Stakeholder concerned
Financial risks The earnings were not
dropped into banks on
regular basis.
Employees,
management of
MacVille Café and
Hurley Cafe
Wastage of water Water was wasted The Toowoomba
Council, MacVille Café,
society
Employment policies
not written
The family held no
written records of the
employment of its
employees as many of
them were family
members
MacVille on acquiring
Hurley’s Café would
require to form new
employment contracts
which may lead to
conflicts.
Sustainability risks Lack of marketing from
the Hurley’s Café
against newly arriving
restaurant chains
MacVille would have to
spend immense amount
of money to market the
products of Hurley in
the initial stage.
It can be pointed out that present risk management methods at the Hurley’s Café

10
RISKS OF TAKEOVERS
is not up to the mark and would attract future business implications. It is an
earnest request to you to go through the same and contribute towards further
development of the same with your valuable inputs.
Regards,
Assistant manager, Queen Street Store
Answer 4:
New Message
September 2, 2024
From: Ash
To: CEO - P. Kinski
CC:
Subject: Request for a meeting to discuss risk conditions at the Hurley’s
Café
Dear Madam,
It is an earnest request to your good self to allow me an appointment to discuss

11
RISKS OF TAKEOVERS
with you the risk management conditions at the Hurley’s Café which MacVille
is looking forward to acquire. It would be of tremendous business significance
for MacVille as well and hence it is a kind request to your good self to allow me
an appointment with you to discuss the risks identified and the further risk
management process.
Regards,
Assistant manager, Queen Street Store
Answer 6:
Part a:
As per the findings of the risk analysis table of the Hurley’s Café discussed above, the
critical success factors of the acquisition would be the position of café and the availability of
retired Australian customers and the tourists. The strategic location of the cafe would enable
MacVille Café generate immense revenue by serving these two groups of customers (Com
2016).
Part b:
As pointed out in the risk management table, the Hurley’s Café followed a low quality
risk management process. This strategy in its present standard poses serious financial,
environment, human resource and sustainability threats as already discussed. The low quality

12
RISKS OF TAKEOVERS
risk management would have serious implications on MacVille if it acquires Hurley’s Café in its
present risk management status (Deresky 2017).
Part c:
The stakeholders of both MacVille and Hurley’s Café should be communicated regarding
the risk management level at the latter. They should invited to participate in discussions
regarding the risk management standards at Hurley’s and put ethical pressure on them to improve
their risk management.
Part d and e:
The CEO of MacVille Café should support the risk management activities and provide
his valuable suggestions and inputs in identifying new risks.
Answer 7:
 The CEO has contributed towards identifying the risk of acquiring Hurley’s Café.
 It has also been recommended that the stakeholders should put ethical pressure on Hurley
Café to improve their risk management.

13
RISKS OF TAKEOVERS
Task 2:
Part A:
Answer 1:
MacVille Café Pty Limited was café style restaurant located in Queensland, Australia
which served gourmet food and coffee to its customers. The company followed a very stringent
risk management policy which came under the purview of apex management and senior
directors. The firm was expanding its business in New South Wales and looking forward to
acquire Hurley’s Café.
Answer 2:
Risks Likelihood Consequences Suitable treatment
options
Reason for
effective and
feasible
Financial risks High Major risks 1. Depositing
all cash in
bank on
regular
basis.
2. Installation
of safe for
keeping
petty cash.
Decrease in
theft and
proper
management
of cash,
improved
financial
management.
Wastage of High Major risks 1. Installation Reduction of

14
RISKS OF TAKEOVERS
water of water
reservoir.
2. Efficient
usage of
dish washer.
water
wastage
would save
the amount
the café
spends to
acquire
water supply
services and
also save it
from future
legal charges
that the
Toowoomba
Council was
likely to
impose.
Employment
policies not
written
Low Minor risks 1. Written
employment
policies.
2. Setting up
of an HR
department
Less disputes
and reduced
turnover of
employees

15
RISKS OF TAKEOVERS
Sustainability
risks due to lack
of marketing
High Catastrophic
risks
1. Marketing
of products
of Hurley in
advance.
2. Introduce
more
innovative
products.
More revenue
generation and
profitable
exploitation of
Toowoomba
restaurant
market.

16
RISKS OF TAKEOVERS
Classification Low [1] Medium [2] High [3] Extreme [4]
Insignificant
[1]
1 2 3 4
Minor [2] 2 Employment
policies not
written
4 6 8
Major [3] 3 6 Financial
risks
9 12
Catastrophic
[4]
4 8
Wastage of
water
12
Sustainability
risks due to lack
of marketing
16

17
RISKS OF TAKEOVERS
Answer 3:
Risk
Assess
risk
(score)
Controls Monitoring
Action
priority
(1–5)
Timeline
s
Responsible
Financial
risks
1 1. Depositing all
cash in bank on
regular basis.
2. Installation of
safe for keeping
petty cash.
Accounts
department
1 6 months Accounts
department
Wastage of
water
2 1. Installation
of water
reservoir.
2. Efficient
usage of
dish
washer.
Floor
manager
2 1 month Floor
manager

18
RISKS OF TAKEOVERS
Risk
Assess
risk
(score)
Controls Monitoring
Action
priority
(1–5)
Timeline
s
Responsible
Employment
policies not
written
3 1. Written
employmen
t policies.
2. Setting up
of an HR
department
HR 3 1 month HR
Sustainabilit
y risks due to
lack of
marketing
1 1. Marketing
of products
of Hurley in
advance.
2. Introduce
more
innovative
products.
Apex
management
4 12
months
Apex
management
Answer 4:
The risk analysis report should be communicated to the board of directors aklong with
the risk analysis report shown above.

19
RISKS OF TAKEOVERS
Part B:
The Hurley’s Restaurant should promote and market its food products in and around
Toowoomba to encounter the sustainability risks the restaurant would face from the international
restaurant chains which were eyeing to enter the region.

20
RISKS OF TAKEOVERS
Task 3:
Answer 1:
MacVille Café was a Queensland based café style restaurant offering gourmet style food
and high quality coffee. The restaurant chain was expanding into new markets like New South
Wales and as a part of its expansion strategy, MacVille was eyeing to acquire Hurley’s Café in
Toowoomba. The restaurant followed a very strict risk management strategy while Hurley did
not.
Answer 2:
Part 2a (i):
The risk management implementation plan would take into account the four initial risks
recognised namely, financial risks, wastage of water which caused environmental risks, lack of
written employment contract which left scope of dispute between employees and employer
(MacVille Café after acquisition) and sustainability risk stemming from the lack of marketing
efforts on behalf of Hurley’s Café.
Risks Consequences Plan
implemented
Outcomes and evaluation
Financial risks Major risks Depositing all
cash in bank on
regular basis
Installation of
safe for keeping
Decrease in theft and proper
management of cash,
improved financial
management.

21
RISKS OF TAKEOVERS
petty cash.
Wastage of water Major risks Installation of
water reservoir.
Efficient usage
of dish washer.
Reduction of water wastage
would save the amount the
café spends to acquire water
supply services and also
save it from future legal
charges that the Toowoomba
Council was likely to
impose.
Employment
policies not
written
Minor risks Written
employment
policies.
Setting up of an
HR department
Less disputes and reduced
turnover of employees
Sustainability
risks due to lack of
marketing
Catastrophic
risks
Marketing of
products of
Hurley in
advance.
Introduce more
innovative
products.
More revenue generation
and profitable exploitation
of Toowoomba restaurant
market.