Detailed Risk Analysis and Treatment Report: Mcville's Toowoomba Store

This report provides a detailed risk analysis and treatment plan for the opening of a new Mcville store in Toowoomba. The report, addressed to the CEO and Board of Directors, identifies four key risks: banking risk, manager's traveling risk, risk of by-law compliance, and loss of brand recognition. It as...Read More

TASK-2
Analyse and Treat Risk

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Report to CEO.............................................................................................................................1
Action plan for implementing risk treatment..............................................................................4
Reporting to Board of director....................................................................................................5
PART B............................................................................................................................................6
Implementation of risk management treatment of banking risk.................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
PART A
Report to CEO
To: CEO – Paula Kinski
From: Assistant Manager – Ash
Re: Risk management process
Dear ma'am
After completion of reviewing risks that are associated with the opening of New
Toowoomba store, this report is to address you further process that includes analysis and
treatment of risks that are identified in the process of review. Main four risks that are had been
identified are and their likelihood are as follows:
S. No. Identified risk Likelihood
1 Banking risk Most likely
2 Manager’s travelling risk unlikely
3 risk of By-law compliance possible
4 Loss of brand recognition risk likely
All the risks that had been identified would have various consequences to the
organisation. These consequences can be summarised as below:
Banking Risk: theft of cash will cause lack of liquid resources, wrong impact on the reputation
of cafe, lack of trust in employees, lack of transparency among junior staff and management.
Manager's travelling risk: this can cause a serious injury to the key personnel of the
organisation or even a loss of person. Further any of such consequence will also affect the
smooth running of functional operations.
Risk of By-Laws Compliance: Organisation may had to pay fines, negative impact on
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reputation of cafe and also loss of brand image.
Loss of brand recognition: Staff not wearing proper uniform or alteration of various processes
and service expectation will cause a huge impact on the loss of brand image of Mcville.
All these consequences will ultimately affect the efficiency and effectiveness of
employees and regular operations of the restaurant which would cause decline in revenue and
profits of the organisation.
In order to understand consequences and happening of risk in a better manner, risk matrix has
been prepared that will enable us to identify the sensitivity and likelihood of all the identified
risks.
Sensitivity Frequent Probable Occasional Remote
Likelihood
Most likely 5 4 4 3
Likely 4 3 3 2
Possible 3 2 1 1
Unlikely 2 1 1 1
This risk matrix will provide us in prioritising the risks, so that these can be focused for
determining the solutions.
In order to treat each of the identified risks following are the options:
Risks Option 1 Option 2
Banking risk For managing overnight cash,
a high security safe can be
installed in cafe, security
password of which will be
known by an only key
Implementing policy of
banking cash on daily basis.
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personnel.
Manager's travelling risk This risk can be reduced by
organising meetings only at
headquarters.
Meetings that are happening at
new Toowoomba store, should
be ended till 3 P.M.
Risk of By-Laws compliance Installation of water tanks and
reducing relying upon council
water
Implementing new processes
on water usage and
conservation system.
Loss of brand recognition Staff members who are
denying to comply with
Mcville uniform, management
can impose fine on them.
Designing such kind of
uniform that would look like
new trend
For the purpose identifying risks, process that has been used is, Ash has visited the site
few days back and has also conducted deep research of the operations and factors that can
influence the regular operations of the cafe. Further, detailed conversation has been done with
the person in charge there who is James Mansfield and landlord of the existing Hurley's cafe
who is Ron Langford and also with senior management team. Overall analysis of site and the
information that has been provided by all the concerned people, major risks that are associated
with the opening of new store have been identified.
Further, for assessing the likelihood of happening of risk, probability method has been
used on the basis of factors like, collecting data regarding number of casualties that has been
occurred on the long route that managers would have to take to reach new store, actions of the
government and amount of fines that could be imposed on cafe for non compliance of By-
Laws, frequency of thefts happened in that area in past month, etc. and timeliness has also been
considered in assessing the likelihood of risks (Glendon, Clarke and McKenna, 2016).
Options that has been suggested for the treatment of risk should considered as those
options would provide the best impact as per knowledge and belief. Implementing policy for
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banking cash on daily basis or installing a high security safe would be effective, as no cash will
be left in the cafe overnight if banked and if kept in safe, risk of theft would be rare. Likewise,
finishing of Managerial meeting upto 3 P.M. Will allow managers to leave Toowoomba in the
day light and less traffic time. Installation of water tank would be feasible option for cafe as
investment required for installation is not high and will also provide with sufficient water
requirement. Designing the dress that will match new trend will also affect positively to the
organisation, as this will improve the presentation of all the staff members and no staff member
will hazitate to comply with code of conduct. This will also improve the brand image of Cafe.
Action plan for implementing risk treatment
Risk Assess
risk
score
Control and
monitoring
Action
priority
Timeliness responsible
Banking risk 3 Regular checking of
cash at the end and
start of the day
2 Opening week Financial
controller
Manager's
travelling risk
4 Allowing the
managers to not to
attend and leave any
meeting at no later
than 3.00 pm every
day or by providing a
high skilled driver
along with installing
GPS system in their
car.
1 Pre- settlement CEO and Board
of Directors
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Risk of By-
Laws
compliance
2 Regular checking of
regulations and
legislations, and
taking approval by
local authority in
delay of any
compliance.
3 Within one week Goldsmith
partner
Loss of brand
recognition
1 Monitoring staff on
daily basis, checking
their uniform and
appliance of code of
conduct.
4 Within three
weeks
Store manager
Reporting to Board of director
To: Board of Directors
From: Assistant manager – Ash
Subject: Report on risk analysis
Respected members,
This is to communicate you all, the conclusions that we have reached upon the analysis
of risk. These are the key points that have been discovered in risk analysis:
Major four risks that have been identified along their likelihood are:
S. No. Identified risk Likelihood
1 Banking risk Most likely
2 Manager’s travelling risk unlikely
3 risk of By-law compliance possible
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4 Loss of brand recognition risk likely
Consequences and options to overcome these risks have also been identified that are
likely to be:
 For managing overnight cash, a high security safe can be installed in cafe, security
password of which will be known by an only key personnel.
 Meetings that are happening at new Toowoomba store, should be ended till 3 P.M.
 Installation of water tanks and reducing relying upon council water.
 Implementing new processes on water usage and conservation system.
 Theft of cash will cause lack of liquid resources, wrong impact on the reputation of cafe,
lack of trust in employees, lack of transparency among junior staff and management.
Along with all these informations, an action plan has also been prepared which is being
attached with this report.
Thanks and regards
Assistant Managerial
Ash
(Mcville)
PART B
Implementation of risk management treatment of banking risk
In order to implement risk management treatment of banking risks following steps can be
undertaken (5 Risk Management Steps in a Sound Risk Management Process):
 Identifying the reasons of why cash is not banked on regular basis.
 Analysis of average amount of cash that is left behind in the premises overnight.
 Analysing the risk of theft on numerical basis.
 Initiating the process of opening a new bank account in the nearest bank.
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 Delegating authority to a senior staff member to look after daily cash and to deposit cash
in bank account daily evening.
 Installing a high security safe at cafe.
 In case, any cash amount left till the end of the day, keeping the amount in safe.
 Responsibility of safe to be also given to a senior staff member.
 Reviewing the process on regular basis.
This process of implementing risk management of banking risk will enable the
management in educing the consequences of risk and also the likelihood of risk. Likewise, risk
management process for the treatment of other risks can also be implemented and risk can be
reduced in future (Pritchard and PMP, 2014).
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