Manage risk
Risk areas of Macville
The following are the main risk areas identified by Macville. Examples of risks are detailed under every area.
Organizational/operational
- Market needs
- Customer interaction
- Infrastructure, equipment, and plant
- Communications
- Product quality
- Marketing
- Logistics
- Resources; physical, human
- Insurance
- Technology
- Regulatory and legal compliance[create_order]
Financial
- Loss of income, finance/funding
- Interest rates
- Capital investment
- Theft or fraud
- Accountability
Governance
- Conflict of interest
- Conduct of board members
Project management
- Financial resources
- Human resources
- Stakeholders-conflict of interest/strength of the relationship
- Tools/procedures for project management
- Risk management plan of Macville ltd
- Macville understands that the management of risk is a vital component of effective management practice. Hence, the company is committed to having a clear plan in risk management in every level of organization. The plan is meant to
- Identify the risk, then evaluate it, thereafter control and manage it
- Make sure all the opportunities and likely threats are not only identified but also managed.
- Enlighten staff members, senior management, and also the directors on their responsibilities.
- Ensure management of risk is a key part of planning in every single level of organization
Authority and responsibility
Members of the board have a duty to ensure there is the management of risk in the company
Audit and risk management and finance team have a duty to review the risk management plan in place after every 6 months
The senior management team and CEO have to not only manage risk but advised the board on control measures to take
Key risk pointers must be identified, monitored very closely and necessary action undertaken by directors and the staff
Management framework
Procedures and policies: procedures and policies guide the risk management plan
Reporting: Decision to correct mistakes are arrived at in regular meetings attended by the management.
Budgeting and business planning: The Budgeting process, as well as business planning, is utilized in setting business objectives, action plan to take and allocate the resources. Contingency planning is carried out as needed. Progress towards attaining the set business objectives is regularly monitored by directors and senior management team at board meetings.
CEO: Company CEO has a mandate to inform directors regularly and when necessary on new developments in the company and strategies in place to manage the risk as well as their implementation.
External audit: Audit carried out in the company gives the management and board of directors a clear picture of what is taking place in the company.
RISK 1 – Irregular Banking
| Plan –An highlight of risk and plan put in place to manage the risk.
| Implementation – A highlight of all that needs to be done so as to manage an identified risk.
| Evaluation – An analysis of whether the plans put in place to manage identified risk is effective. This is done by comparing outcomes and implementation.
| Outcomes- A statement that points out persisting or reduced risks.
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| Money was never banked on a daily basis, and in most cases, about $4,000 was retained in the store buildings in cash register overnight. Banks are always opened. And with the bank two shops, there is always sufficient time to the bank. About the possibilities of a break-in into the shop, research shows a 50% possibility of occurring annually. Below is a risk management plan.The plan is aimed at managing this risk. 1.procedure and policy requirement to the bank daily 2. Have an account opened in a closed bank 3. Secure insurance cover for the money left on the premises.
| The person in charge of finance had spent $5,000 to secure insurance cover for the money kept on the premises overnight. This was done according to plans. The plan was that the bank account is opened in the 1st week. However, this was done 4th week after the launch of the cafe. In addition, the account was opened at the bank two doors, not far from the store. Since this is not the common bank of Macville, there exist challenges of not similar service level that Macville usually gets in Brisbane stores. The plans to have training about banking on a daily basis appears to have been completed successfully. An audit carried out on bank deposit books indicates that it is only on two occasions where there was no banking entry for daily sales in the past six months.
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The plans put in place to manage the risk were implemented successfully, and it worked effectively in minimizing of loss of money left on the premises as well as baking regularly. Only frequent monitoring and evaluation is necessary.
| Plans on ensuring cash that stays overnight on the premises were implemented accordingly. A bank account was opened four weeks after the launch of the cafe. Moreover, the bank is the most closet to the cafe. However, its level of services does not match those received by Macville in Brisbane stores. |
RISK 2 – Manager’s Travel
| Plan –An highlight of risk and plan put in place to manage the risk.
| Implementation – A highlight of all that needs to be done so as to manage an identified risk.
| Evaluation An analysis of whether the plans put in place to manage identified risk is effective. This is done by comparing outcomes and implementation.
| Outcomes- A statement that points out persisting or reduced risks.
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-The distance between Brisbane and Toowoomba is big. Hence, it is a big challenge for managers traveling from Toowoomba to Brisbane for weekly meetings. Moreover, in many cases, the meetings don’t finish till late evening. After refreshments, assistant managers and managers attend training sessions, which must be completed within six months. Navigating narrow, steep climb up with several trucks and lorries blocking the way is not only challenging at night but also during daylight hours. Although experienced drivers feel that they are not likely to be involved in an accident in the climb, however, it stills concerns them. Plans that may be implemented to manage it include
Install teleconferencing
Have management meetings end by 3 pm
Training of the managers to be done in the morning.
| There was a plan to have teleconferencing installed 6months from launch. However, that was never done. This was because the federal government delayed in rolling out its National broadband network. The plan to have weekly management meetings end by 3 pm is going as planned. However, in some instances, the head office team requests managers to stay past 3 pm. The manager in the head office has not received a circular from the chief executive officer, indicating that the meetings should end by 3 pm. Moreover, managers feel that they cannot just walk out of the meeting at exactly 3 pm. Training of the assistant managers was moved to morning hours. This enabled the manager to as early as 1 pm as per the plans. So far, the store has arranged for an internal audit to be carried out, and as per the plans, there should be a call after every two months. The infrequency is mainly because of the big distance the auditors have to travel. Moreover, the auditor has a lot of work with Brisbane stores.
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Risk management not implemented as planned. Moreover, there is still the risk of injury that may result from traveling. The risk needs more analysis as well as evaluation.
| .Teleconferencing system was not installed as per the plans. Management meetings being held weekly end by 3 pm as planned. However, the manager still stays after 3 pm in some instances, since the head office management has not received official communication that all meetings should end by 3 pm. The training of the assistant manager is now being done in the morning as planned, and the manager leaves before 1 pm. However, in some instances, they stay past 1 pm because the manager in charge of the head office has not received communication from the chief executive officer about the timeliness of training and meeting.
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RISK 3 – Compliance of bylaw Risk
| Plan –An highlight of risk and plan put in place to manage the risk.
| Implementation – A highlight of all that needs to be done so as to manage an identified risk.
| Evaluation – An analysis of whether the plans put in place to manage identified risk is effective. This is done by comparing outcomes and implementation.
| Outcome- A statement that points out persisting or reduced risks.
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Water was being wasted in the Toowoomba cafe. This was as a result of dishwasher occasionally run when not full; all toilets use a single flush system, vegetables and fruits are cleaned using fast-running tab water. The manager was instructed by the CEO to ensure employees constantly water non-active flowers in the courtyard. Dishwasher water was ever in the full washing setting mode. Its water efficiency level was three stars. Dishwashers whose water efficiency is 5 star and above cost over $6,000. The cost of upgrading a dual flush system is approximately $7,500 Currently, the store uses 41,500 liters of water every week. Plans that need to be implemented so as to manage it Procedure and policy to change work practices Have water saving devices installed e.g., tanks, native plants, toilet dual flush system, as well as 5-6 star water efficiency dishwashers Use time to make it good
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CEO and board members came up with a new policy that supports compliance with the water conservation bylaw of Toowoomba. This was done as per the plans. However, so far, there is no written, specific procedure. Nonetheless, it appears that there is compliance with the bylaw. To minimize wastage of water, plants have been changed to native as planned. It was also planned to have dual toilet flush installed after 6months. Although they are yet to be installed, it’s already bought and is in store. The delay in installations is occasioned by huge work the city plumbers have. City plumbers are the only ones mandated to do plumbing.5 star dishwasher was installed before the lapse of six months by the supplier. The request to “make good” was accepted by the city council of Toowoomba, “make good” was carried out by Goldsmith partners in place of Macville. Nonetheless, the allowed time to comply with bylaws end in fourteen days. The café is above an acceptable mark for water use. The policy had directed to have employees trained on how to save water, although the written procedure is yet to be completed by the assistant manager, the staff has been told verbally, and they continue to follow. The water tank already built in the courtyard. However, plumbing is yet to be done. No connection so far. There is the monitoring of water usage every week. However, information has so far been not updated in the last three weeks.
| Risk management not implanted as per the plans. There is still the risk of noncompliance since the store is struggling to meet water usage requirements, and the time allowed to comply with the laws will soon lapse. Therefore, this risk needs urgent action from the senior management team as well as further analysis and evaluation.
| Compliance has so far been achieved Management introduced a policy that supports compliance of Toowoomba city council bylaws on conservation of water. However, due to the busy schedule of assistant manager specific procedure is yet to be written by him. Plants have been changes to native More water-efficient dishwasher has been installed
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RISK 4 – Loss of Brand Recognition
| Plan –An highlight of risk and plan put in place to manage the risk.
| Implementation – A highlight of all that needs to be done so as to manage an identified risk.
| Evaluation – An analysis of whether the plans put in place to manage identified risk is effective. This is done by comparing outcomes and implementation.
| Outcomes- A statement that points out persisting or reduced risks.
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| It consumes a lot of time to move from Toowoomba to Brisbane. This makes it a bit challenging for managers who go for meetings in Brisbane on a weekly basis. And in most cases, the meetings end in the evening. There are also training lessons for managers that need to be finished within six months. Managers are trained along with the assistant managers. Driving up a steep and narrow climb with several trucks and lorries obstructing the way is not only challenging at night but also during daylight hours. Although experienced drivers feel that they are not likely to be involved in an accident in the climb. However, it stills concerns them.
1. Give employee handbook to every staff 2. Have occasional meetings with all employees to highlight the significance of maintaining the image of the Macville brand. 3 Have warning system implemented to deal with the noncompliance
| -All old employees put on Macville uniform. These original employees have a duty to manage and supervise new employees. Old employees have not informed new workers of the requirement to wear uniforms. Moreover, they have never warned them of uniform noncompliance. Hence, many staff members don’t put on macville uniforms
| The management of risk is not implemented as planned. The company risks losing the brand since old employees have never taken the initiative to explain to new workers the significance of wearing uniforms. Moreover, they have not explained to them the consequence of not wearing uniforms. This risk needs urgent action from the senior management team and more analysis and evaluation.
| All old employees of Macville wear the company’s uniform. However, they are not informing new employees of the need to wear a uniform, hence increasing uniform noncompliance. Moreover, they have not warned them of the consequences of not wearing a uniform. |