Semester 1 Risk Management Project: Bounce Fitness

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Risk management
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Table of Contents
Introduction......................................................................................................................................3
Assessment 1...................................................................................................................................4
Assessment 2...................................................................................................................................5
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Introduction
The process of risk management includes the identification of risk, its analysis and respond to the
identified risk. It is done to eliminate the negative impact on the project. This is a very important
process in project management as it helps to minimize all kinds of risk. The report is based on
the risks that are identified on the project, what will be its impact, and what actions will be taken
on these risks so to minimize them. The report also contains the code of practice, legislation, and
standard of risk management. The discussion is also done on the stakeholders who are involved
in this process of risk management.
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Assessment 1
1. Outline the purpose of key elements of current risk management standards.
The key elements of the program for risk management are:
 Process
 Culture
 Infrastructure
 Integration
The elements are flexible for risk management. These need to be flexible because
organizational structures, risk profiles, operating philosophies, and strategies vary in
complexity across various firms and industries (Bromiley, et. al., 2015).
2. Outline the legislative and regulatory context of the organization concerning risk
management.
The regulatory and legislative requirements include:
 Privacy
 Emergencies, disasters
 Occupational safety and health
 Equal employment opportunity
 Environment
 Traffic management
 Noise limits
 Land use planning (Hopkin, 2018)
 Community interaction
 Planning and building permits
 Emergency procedures
 Safety standards
 Management procedures
 Operating procedures
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The organization’s requirements will be defined at the time of establishing the context of
emergency risk management (Fenner-Crisp and Dellarco, 2016.). All the staff including
suppliers, contractors, employers, clients, etc. should know the regulatory, organizational,
and legal requirements and should work within it.
3. Outline organizational policies, procedures and processes for risk management either for
the simulated business Bounce Fitness or for your own organization.
The organization's procedures and policies for risk management include the creation of a
marketing plan in detail which involves the ahead plan of scenarios that are related to
business. The marketing plan for Bounce Fitness includes:
 Significant economic downturns
 Problems developing a large client base
 Equipment are liquidated to cover the liabilities
 Determining that business can’t support itself (McNeil, et. al., 2015)
Assessment 2
1. Review the processes, procedures, and requirements for undertaking risk management
and discuss each for the organization you have chosen. Identify and explain how the
AS/NZS ISO 31000:2009 Risk Management – Principles and Guidelines could be used as
part of the plan.
The procedure or process for risk management includes:
 Risk identification
 Analysis of risk
 Evaluation of risk
 Risk control and mitigation
The two elements of the process are communication and consultation, and monitoring
and review. Communication and consultation include communication with external or
internal stakeholders. It is important to understand the objectives of the stakeholder to
plan their involvement and their views in the setting of risk criteria (Mojtahedi, and Oo,
2017). The risks need to be prioritized so that the effective controls can be taken on time
for preventing severe negative impact.
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2. Determine the scope for this risk management project. Review the strengths and
weaknesses. Include hardcopies as evidence.
The scope of the risk management is that by running this process, the identification of
strength, opportunities, and weakness of the project can be easily done. This
identification can be helpful in achieving success. The goal of the project depends on
preparation, planning, results, and evaluation.
Strengths:
 Risks can be treated and minimized
 Risks can be identified and can be assessed
 Saves time and cost
 Resources can be protected (Peltier, 2016)
 Strategies can be implemented for successful business
Weakness:
 Complex calculations
 Ambiguity
 Potential threats
 Unmanaged loss
 Difficulty in implementing
3. Identify the internal and external stakeholders and the possible issues that they may have.
Stakeholders of the company are the people who can affect the business or can be
affected by its actions. Internal stakeholders are referred to as entities in a business,
whereas external stakeholders are referred to as entities outside the business but are
concerned about the business (Slovic, et. al., 2016).
Internal stakeholder includes:
 Owners
 Managers
 Employers
External stakeholders are:
 Society
 Suppliers
 Shareholders
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 Creditors
 Customers (Wang, 2015)
 Government
4. Review the political, economic, social, legal, technological, and policy contexts in
relation to managing risk for this risk.
Political factors such as tax policy, environment law, safety, and health law, etc. affect
the business. The main effect of such factors is the mitigation of risks. The best way to
managing the risk is to buy political insurance (Bromiley, et. al., 2015). Organizations
that operate internationally use political insurance to minimize the exposure of risk.
Economic factors such as exchange rates, economic growths, interest rates, and inflation
rates affect business in a huge way. It can affect the product's cost and supply.
Social factors include age distribution, rate of population growth, health consciousness,
and cultural aspects. Such factors affect the demand for the product of the company. The
aging workforce can be less willing and the cost of labor also increases. Also, the
organization has to change the strategies of the management to match the social trends
(Hopkin, 2018).
Legal factors such as consumer law, discrimination law, antitrust law, etc. affect the
organization's operation, the product's demand, and the cost.
Technological factors include aspects like automation, R&D activity, etc. These factors
are helpful in determining the entry barriers and minimum level of production (Fenner-
Crisp, and Dellarco, 2016).
5. Create a list of critical success factors, goals, and objectives in the area included in the
scope
The critical success factors include:
 People: it includes factors like learning, development, staff, and personnel.
 Strategic focus: it includes management, planning, and leadership.
 Operations: it includes work and process.
 Finances: it includes equipment, assets, and facilities.
 Marketing: it includes sales, customer relations, and responsiveness (Petlier,
2016).
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6. Discuss who you will request for support and how you will do this. Include hardcopies as
evidence.
The support is requested by the persons who are working on this project. They get
support from the risk analyst. The support can be asked through communication directly
or indirectly.
7. With whom will you communicate and invite to participate in this risk management
process? How will you achieve this? Include hardcopies as evidence.
In the process of risk management, the communication is done with the manager,
stakeholders, sponsors, investors and the involved staff through meetings, conferences or
mails. The risk analyst should be invited in the process so that the risks can be analyzed.
8. How will you invite relevant parties to assist in the identification of risks? Include
hardcopies as evidence.
The parties that are relevant in assisting the identification of the risk are invited through
mails or meetings.
9. What are the risks that may apply to the scope? How did you research these? Include
hardcopies as evidence.
The main risks are:
 Strategic risk: this risk is related to the strategies made by the company. In this,
the strategies become less effective and the organization has to struggle a lot to
achieve its goals. This could be because of the reasons such that new competitors
entering the market, technological changes, the spike in cost, etc.( Mojtahedi, and
Oo, 2017).
 Compliance risk: with the changing laws every time, there's a risk that has to be
faced in the future because of the additional regulations. Even the company is not
geographically changing its location, compliance risk can incur by expanding the
line of product. This type of risk can affect the future of the business.
 Operational risk: it is an unexpected failure in the organization. It could be a
failure caused by the process or people or can be a fault in technology (Slovic, et.
al., 2016). This risk has a great and huge impact on the company which can lead
to damage to the reputation of the company and also the loss in revenue.
Operational risk can also be due to the power cut, natural disaster, or website
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host's problem. Operational risks are those risks that interrupt the core operation
of the organization.
 Financial risk: many categories like lost revenue and extra cost impact the
organization financially. It refers to the money flowing out and in of the business
which results in sudden loss financially (Wang, 2015). It is mostly due to
international business.
 Reputational risk: reputation is everything for the business and if something
happens to the reputation, there is a loss of revenue. This will demoralize the
employers and even they can leave the organization. This risk can be dangerous
because it can lead to negative publicity, embarrassing product recall, or high
profile criticism (McNeil, et. al., 2015).
10. What tools and techniques did you use to generate the list of risks that apply to the scope
and with whom did you consult regarding this?
The techniques and tools that can be used for the identification of scope risks are:
 Interview: after the selection of stakeholders, the interview should be planned.
Specific questions like assumptions, exclusions, constraints, deliverables, etc.
should be defined. Then, the interview’s result should be documented.
 Checklist: the company should have a list of the risks that occur commonly. After
the completion of this project, this list should be checked. The same list can be
used projects subsequently (Hopkin, 2018).
 Brainstorming: the questions for brainstorming should be planned in advance. The
most common questions are the common risks related to the deliverable of the
project, coding, testing, requirements, implementation, and training.
 Nominal group technique: this is a powerful technique and many managers of the
project are not familiar with this. Inputs are gathered and then prioritized.
 Effect and cause diagrams: these diagrams are powerful and can be used by the
project managers to identify the cause of risk. If the cause can be addressed, then
reducing risk can be easy (Petlier, 2016).
 Work breakdown structure: the WBS should be facilitated for the identification of
the scope risks. The lowest elements should are checked to identify risk.
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 Affinity diagrams: this technique is creative, beneficial exercise, and fun.
Participants should be asked to brainstorm risks. The risks are collected and
grouped in different categories and the title is given to each group (Slovic, et. al.,
2016).
11. How did you assess the likelihood of a risk occurring? How did you assess the impact or
consequence if risks occur? Include hardcopies as evidence.
Five steps for assessing the risks are:
 Step 1: identification of hazard (that can cause harm). Classifications of hazards
are commonly done as:
 Physical: it includes examples like slips and trips, lifting, dust, noise,
awkward postures, etc.
 Mental: it includes examples like long hours, workload, bullying, etc.
 Biological: it includes hepatitis, tuberculosis, etc. which are faced by
home care staff, workers of healthcare, etc.
 Chemical: it includes an example like cleaning fluids, asbestos, aerosols,
etc.(Bromiley, et. al., 2015).
 Step2: decide the things that may cause harm and also how it will. Employers
must observe the routines of working in different situations and locations of the
employed staff.
 Step3: assess the risks and proper actions should be taken on them. This means
that what is the risk and what will be its impact.
 Step4: a record of the finding should be maintained. The main finding related to
the risk and its impact should be contained in a record. This record can be used as
evidence for the carrying of assessment.
 Step 5: risk assessment’s review should be done to consider the new practice for
working, work targets, and new machinery (Fenner-Crisp, and Dellarco, 2016).
This can also be reviewed to ensure the safe practice for working, which can be
applied for the continuation of work.
12. How did you evaluate and priorities risks for treatment? Include hardcopies as evidence.
After the identification of the risk, these risks are analyzed and evaluated on the basis of
its impact on the growth of the business. The evaluation of the risks is done so that all the
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risks can be arranged and prioritized according to its impact. The impact is measured in
three critical values namely, high, medium, or low. This is done so that important risks
can be provided with the treatment (Hopkin, 2018).
13. How did you determine and select the most appropriate options for treating the risks that
you have chosen to work with? Identify which insurer and insurance policies you could
engage and purchase and explain how they could assist with any risk minimization.
Include an insurance proposal from your nominated insurer.
Risk treatment is used to manage the risks; the process includes identification,
assessment, and treatment. Types of risk treatment are:
 Avoidance: the risks can be avoided by taking such actions that are helpful for the
avoidance of risk.
 Acceptance: it is also called as the risk retention. This means the risks are
accepted and are faced.
 Reduction: the actions can be mitigated to minimize the risk (Fenner-Crisp, and
Dellarco, 2016).
 Transfer: the risks can be transferred to a third party. The two transfer types are
outsourcing and insurance.
 Sharing: in this, the risk is shared with multiple different individuals or
organizations. This is because of the reasons like self-insurance strategies and
insurance products.
14. Include a hard copy of your action plan for implementing the risk treatment. The action
plan must include:
• What actions are required?
• Who is taking responsibility?
• Timelines
• Monitoring processes.
S.No. Risk Required
actions
Responsible
person
Timelines Monitoring
process
1. Insufficient
resource
Sufficient
resources must
be provided
Investors 4 days The supply of
resources
should be
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timely
monitored.
2. Technical fault Proper tools
and technology
should be
provided. No
Wi-Fi and
internet
connection
issues.
Management
team
4 days The faults
should be
regulated and
monitored on a
regular basis.
3. Unhealthy
environment
The
environment
should be kept
clean and tidy.
Team
members
3 days The monitoring
of the
environment
can be done by
an individual by
keeping his/her
surroundings
clean.
4. Lack of
communication
Proper
communication
with the
stakeholders.
Manager 3 days The
communication
between the
people should
be done on a
regular basis to
know the
progress of the
project.
5. Location issues A proper
survey should
be done to
choose the
Site visiting
team
5 days The site is
required to be
monitored for
any further
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