Risk Analysis Report: Assessing Likelihood and Consequences

This report provides a comprehensive risk analysis and management plan, addressing the risks identified in a case study. The analysis begins with risk identification through methods like brainstorming and stakeholder interviews. It then assesses the likelihood and consequences of identified risks, categorizing them as high, medium, or low. The report prioritizes risks using a risk matrix, determining extreme, high, medium, or low priorities. It explores various risk treatment options, including internal control methods and early identification. The report includes a detailed risk management plan with action plans, controls, monitoring procedures, timelines, and responsible parties for each identified risk. The plan covers banking risk, manager's travel risk, and by-law compliance risk, providing a structured approach to mitigate potential threats. The document concludes by referencing the sources used for the analysis.

Risk Analysis1
Risk Analysis
Students’ Name
University
Course
Date

Risk Analysis2
Introduction
Risk analysis and management plan practices are essential for any project because it ensures that
there are few risks surprises. Risk identification can be done through brainstorming or
interviewing some members like stakeholders and project experts (Carvalho, and Rabechini
Junior 2015). The process used to identify risks in assessment task 1 is interviewing managers
and other stakeholders. Another identification process used was brainstorming ideas from the
senior management team meeting. This paper covers the likelihood, consequence, priorities, and
options of the risks which had been identified in the company.
Likelihood
Once a risk identified, it's essential to determine the probability of the occurrence of those risks.
To assess risks likelihood, consider factors such as the origin or source of the risk, source
capability, and finally, the risks motivation (Willumsen et al, 2019). Probability is the level of
vulnerability and can be low, medium, or high.
 Banking risk- there is a high possibility of banking risk occurring because money can get
stolen at any time. Likelihood of theft is very high because from the case study, no daily
banking. Thus approximately $4000 are left on the premises overnight; therefore,
banking risk is a possible risk.
 Managers travel risk- Road accidents are widespread, and even if managers are skilled
drivers, they enter into crashes. Accidents mostly occur because of roadblock created by
big trucks. Thus the chances of this risk occurring are medium.
 The By-law compliance risk- in organization laws can be broken maybe by managers or
employees. The company has been paying a lot of taxes due to water usage fines.

Risk Analysis3
Managers and employees sometimes go against the current by-law. Therefore by-law
compliance is an unlikely risk.
Consequence
Risks have a significant impact on business operations; therefore, they get addressed before they
cause harm. Some of the effects of threats are on revenue and profits. Risk consequences can be
catastrophic, major, minor, and insignificant (Cagliano et al, 2015). According to the case study,
banking risk and manager's travel risk are major risks while by-law compliance is a minor risk.
Banking is a major risk because the likelihood of it occurring is very high. Managers travel every
day to and from work; that's why it's a major risk. Taxes rise operations costs; therefore, the
company set some rules which control usage of water; therefore, by-law compliance is a minor
risk.
Priorities
Priorities are made using a risk matrix, a method which classifies risks depending on their
likelihood and consequence. Risk priorities can be extreme, high, medium, or low. Banking is a
severe risk as there is a high likelihood of occurrence. Manager's travel risk has top priority
because managers’ travel almost daily, and by-law compliance has a medium priority.

Risk Analysis4
Options
Risks have to be resolved and treated as they may cause adverse effects. The options for risk
treatment are internal control methods and early identification. Before determining which option
to take it’s essential to consider factors such as acceptability, efficiency, cost-effectiveness,
equity, freedom, objectives, continuity of effects, economic and social environment. On the first
option, plan early by identifying and treating risk before they emerge (Giannakis, and
Papadopoulos, 2016). An early plan option controls and reduces the effects which could have
been caused by hazards. Internal control procedures are the other option which involves all
stakeholders. Stakeholders should be committed in identification, monitoring, and management
of risks. Some of the internal control procedures are annual budgeting, set of business conduct
standards, and accountability of each stakeholder. These options are efficient and feasible for the
company because they are cost-effective, very acceptable, and compatible.
The company’s Risk management plan
Risk Assess Risk
(L, M, H, E) Controls Monitoring Timelines Responsible
Banking Likely, major,
and extreme
Action plan
Internal
procedures
Interviewing
Brainstorming
Day one – the first
operations week
Financial
controller
Manager’s
travel
Unlikely,
major, and
high
Internal
procedures
Brainstorming • Within 3
months –
opening week
Company CEO
By-law
compliance
Low, minor,
and medium
Internal
procedures
Interviewing Opening week- 6
months
Goldsmith
Partners

Risk Analysis5
References
Cagliano, A.C., Grimaldi, S. and Rafele, C., 2015. Choosing project risk management
techniques. A theoretical framework. Journal of Risk Research, 18(2), pp.232-248.
Carvalho, M.M.D. and Rabechini Junior, R., 2015. Impact of risk management on project
performance: the importance of soft skills. International Journal of Production Research, 53(2),
pp.321-340.
Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management
approach. International Journal of Production Economics, 171, pp.455-470.
Willumsen, P., Oehmen, J., Stingl, V. and Geraldi, J., 2019. Value creation through project risk
management. International Journal of Project Management, 37(5), pp.731-749.