Minimize Agency and Consumer Risk
Introduction
Wizz Bang Real Estate is experiencing an array of problems with its long-time plumber owing to obliviousness and failure to meet his obligations. Failure to undertake appropriate measures will cause Wizz Bang to lose business to its competitor, Evansdale Realty. In order to help Wizz Bang address its issues, the learner will prepare a risk register identifying potential risk from the provided case study. The researcher will assess every risk using a risk matrix and provide a rating while determining the most appropriate option for every risk. In order to overcome the identified risks, the researcher will provide a risk treatment action plan that will focus on reducing the identified risks in relation to the agency and consumers.
Risk Register
| Risk Description | Likelihood of Occurrence | Impact if the Risk Occurs | Person managing the | Mitigation Action | Treatment Action (in the event of occurrence) | Treatment Effect |
| Pedro’s may connect the system incorrectly again | High | High | Julian (property manager | Have Pedro change the connection and confirm that proper installation has been done | Replace the connection and check for any issues that may have occurred in the system Quality testing and assurance | Replacing the connection would have a positive effect. |
| Failure to have an insurance policy could have detrimental effects on the agency and Stewie | Moderate | Moderate | Col (Insurance agent) | Follow up with Stewie to make sure that the insurance policy is issued | In the event of an issue that causes Stewie to get sued, the company would cater for the costs. -Ensure a credible insurance policy to avoid legal and financial liability | -Negative effects on the agency’s finances. Could suffer the risk of losing business to Evansdale Realty -Financial catastrophe |
| Pedro’s obliviousness could cause the company to lose business to Evansdale Realty | High | High | Julian(Property manager) | Hire a more qualified plumber (Stewie) and ensure that he is up to the task. | Hold a meeting with the company’s clients and promise to make changes to improve service provision. Have the new plumber cater for all the presented plumbing issues Provide repairs free of charge | Providing assurance to the clients will help to protect the company’s reputation hence positive effects. |
| Stewie turning out to be incompetent | Moderate
| High | Julian | Analyze Stewie’s work and certifications to ensure that he is the best choice for the company | Take Stewie for training. Provide necessary materials to execute his work with the utmost efficiency. Promise extra rewards as a form of motivation | Training and motivating Stewie will have positive effects on the company’s reputation and output. |
Risk Matrix
| Likelihood | Low | Moderate | High |
| Rare | |||
| Possible | Stewie turning out to be incompetent | Failure to have an insurance policy could have detrimental effects on the agency and Stewie | |
| Likely | Pedro’s may connect the system incorrectly again | ||
| Almost Certain | Pedro’s obliviousness could cause the company to lose business to Evansdale Realty. |
Strategies Developed During the Risk Management Process
During the risk management process, the researcher adopted various strategies to assess the risk in order to come up with the most viable solution. The strategies included: Don't use plagiarised sources.Get your custom essay just from $11/page
- Risk identification – Identifying the risk and events that can cause the problems (Kapliński 2013)
- Risk analysis – The effects of the risks were analyzed on the consumers, the agency, and workers
- Risk evaluation – Risks were evaluated on the basis of the ranks of the quality of risk outcomes. This strategy helped to understand the threat of the risk to the agency’s success
- Risk treatment – after gaining a grip on the risks and severity, the researcher treated all possible risks with the most viable solution to increase the probability of a positive outcome.
- Risk monitoring – The risks were monitored by tracking all variables and possible threats to the treatment actions.
Part 2 – Risk Treatment Action Plan
The risk treatment plan of the risks identified in the Wizzy Bang company should entail the selection and implementation of measures that modify risks. The measures undertaken should include the avoidance, optimization, transfer, or retaining of the risks identified. However, this study will focus on minimizing the risks identified that relate to consumer’ satisfaction and the success of the agency relative to its competitors.
The Risk of Poor Connection
Julian, the property manager, is concerned that Pedro has become oblivious and has shown incompetency in his operations. He has become forgetful and ended up making a significant mistake that could be a threat to the company and the customers. However, the management should work towards minimizing the risks by ensuring the plumbers are well trained to design, install effectively, and maintain the entire plumbing system (Kaplińskim, 2013). Identifying risks is important to avoid possible contamination and discomfort in the company.
In order to minimize the identified risks, the company should engage in the training and education of the codes of best practice of the quality assurance systems. Apart from training, the company should implement various codes of best practice by enforcing laws and regulations that promote the highest level of standards. However, even with good operational standards, there is a high likelihood of poor plumbing installations. When people become ill as a result of the plumber carelessness, the plumber should be held responsible for their actions.
Failure of Insurance Policy
Failure to take an insurance cover would cause the transference of the financial liability to the company. The impact would be catastrophic in that legal liability would affect the company’s financial stability and reputation in the real estate market. It is thus necessary to reduce this risk beforehand by transferring the risk to an insurer through the continuous payment of the annual fees. Plumbing is a dangerous undertaking that can injure workers and cause the accumulation of massive medical bills (Menapace, Colson, & Raffaelli, 2013). It is thus necessary for the company to ascertain the proof of credible insurance policy before they allow the employee to work in the company. An insurance policy will help the company to manage the worst likely risks in order to shift its focus on essential activities. This strategy will help to minimize the requirement of transferring the financial and legal liability to the company incase the plumber gets sued, which would have significant effects on the company’s operations and reputation. Wizzy Bang should ensure the insurance of the plumber and the business from legal damages and accidents. Insurance can also help to replace broken or lost equipment, thus reducing the likelihood of poor company reputation.
Competition from Evansdale Realty
In order to reduce consequential risks and reduce the likelihood of losing business to Evansdale Realty, the company should ensure that Stewie’s actions are guided by the code of practice. The company should minimize the risk associated with incompetency in the new employee by promoting the creation and implementation of the desired practice guidelines and codes of practice. As Kapliński (2013) explains, the implementation of an effective plumbing code of practice will enable the design plumbing system and the plumber to protect themselves and the public. This will ensure that the company presents the highest quality of services to the public in order to reduce the chances of losing business to its competitors.
Risk of Incompetency in the New Recruit
When evaluating the new recruit’s qualifications, the company should ensure that he is competent to ensure compliance with the established codes. The plumbing installation requirements should be maintained in order to ensure continued effectiveness and safety of operation. Quality assurance and testing is an essential measure that should be undertaken to avoid the likelihood of poor connection in the future (World Health Organization & World Plumbing Council, 2006). It is the responsibility of the plumber to ensure that all plumbing activities are executed efficiently by complying with the stipulated conditions thoroughly. After completion of the plumbing work, the plumber should provide a notice for testing to ensure water tightness and accuracy of operations.
References
Kapliński, O. (2013). The utility theory in maintenance and repair strategy. Procedia Engineering, 54, 604-614. https://doi.org/10.1016/j.proeng.2013.03.055
Menapace, L., Colson, G., & Raffaelli, R. (2013). Risk aversion, subjective beliefs, and farmer risk management strategies. American Journal of Agricultural Economics, 95(2), 384-389. https://doi.org/10.1093/ajae/aas107
World Health Organization, & the World Plumbing Council. (2006). Health aspects of plumbing. World Health Organization.