BizOps Enterprises

Report and Risk Management Plan

for

BSBRSK501 Manage risk

Student name: Amanda Pires
Student ID: 46476
 Report & Risk Management Plan

Table of Contents

Introduction Page 3

Results and Findings Page 3

Task 3 Question 1 Page 4

Background: Page 4

Context: Page 4

Identification and analysis Page 7

Risk categorisation matrix Page 7

Risk categorisation table Page 8

Risk control/treatment Page 9

Task 3 Question 2 Page 15

Task 3 Question 3 Page 19

Risk categorisation table Page 19

Recommendation and Conclusion Page 20

References Page 20

2|Page
 Report & Risk Management Plan

Introduction
BizOps Enterprises started as a small company and has grown into a national retail business
specialising in a range of exclusive products. BizOps has more than 150 retail, online and phone order
outlets across Australia. Business has been good but management is always wary of risks on the
horizon, especially given the situation during the past three months. Over this period, there have been
significant international, national and organisational incidents that have affected the business.

Results and Findings

On the international front, five key suppliers of our top-selling range of products have received global
condemnation about using toxic or banned chemicals in their products and polluting the environment
through their unsustainable production methods. Floods have affected some Asian suppliers so that
the manufacture and transport of numerous top-selling lines has been interrupted for the past three
months. This is affecting online sales.
On the national front, Australian consumers are spending less due to the uncertain global financial
situation and rumours of government tax increases that are likely to decrease household disposable
incomes. Furthermore, there has been recent political uncertainty with leadership challenges and
allegations of corruption. These issues and the impending federal election are leading customers,
businesses and investors to take a wait-and-watch approach. Federal consumer legislation was
introduced in 2011 so there is a need for all states to be brought up to date, especially with increased
consumer knowledge of rights such as the product safety law. Uniform WHS laws have also been
introduced by most of the states.
There are some issues arising within the organisation. There has been an increase in complaints from
customers about online purchasing system problems/disconnections, goods not being delivered on
time and allegations that confidential customer information is being passed on to other companies.
Customers have complained that the company website and online purchasing links are ‘glitchy’. There
is also rising social media pressure about claims that BizOps’s major suppliers use sweatshops, child
labour and manufacturing processes that cause environment destruction.
Information systems and warehousing/logistics systems are more than 10 years old. Management is
contemplating downsizing and adopting rigorous budgetary cuts across all sections of the organisation.
Staff morale has dropped, with many conflicts between staff and complaints about hours worked and
lack of training.

3|Page
 Report & Risk Management Plan
Task 3 Question 1

Background:

BizOps follows for all their operations through standard risk management processes.

According to BizOps Enterprises risk management policy includes the

following risk:

- Risk Identification.

- Risk Rating.

- Risk Controls.

- Risk Monitoring and Reporting.

Context:

BizOps Enterprise has a budget and risk and contingency plans. Therefore, the management can
make decisions to do adjustments, assist the issues, apply new operations depend of the risk.

Through the identification process, one of the first steps is to identify the financial risks, how these
would affect the company and how they will implement the possible risks controls and
contingencies.

a. Summarise key risks facing BizOps under the following scope headings. Refer to the
case study and the relevant documents in the zip folder.

Political

- Government tax increases;

- leadership challenges;

- corruption.

Economic

Global financial situation.

4|Page
 Report & Risk Management Plan
Social

Key suppliers have received global condemnation about using toxic or banned chemicals in their
products and polluting the environment through their unsustainable production methods. Customer
information is being passed on to other companies.

Floods affected suppliers, affecting our online sales.

Legal

Introduction of WHS laws in most of the states.

Technological and policy

Online purchasing system problems/disconnections, good not being delivered on time. Information
systems and warehousing/logistics systems are more than 10 years old.

The staff including employees and management are responsible of applying the risk management
principles and practices in their specific areas.

b. Review and list organisations policies and procedures

Current Policies

- AS/NZS ISO 31000:2009 Risk Management - Principles and Guidelines

c. Identify links between current risks and organisations stated ethos

Ethos: Risks: Links:

Staff Moral /training/conflict Social / Mental Health Mental Health / values

Equipment more then 10yo Technical Not achieving mission

Toxic and banned chemicals Environmental / Legal Mission / WHS

5|Page
 Report & Risk Management Plan
d. List examples of legislation, regulations, standards and codes relevant to the current
situation

- SO/TR 31004:2013 Risk management – Guidance for the implementation of ISO 31000

- ISO/IEC 31010:2009 Risk management – Risk assessment techniques

- ISO Guide 73:2009 Risk management – Vocabulary, which provides a collection of terms and
definitions relating to the management of risk.

- Duty of care: Work Health and Safety Act 2011 (Cth)

- Environmental law: Environment Protection and Biodiversity Conservation Act 1999 (Cth)

- Freedom of information: Freedom of Information Act 1982 (Cth)

- Access and equity legislation: Disability Discrimination Act 1992 (Cth); Age Discrimination Act
2004 (Cth); Racial Discrimination Act 1975 (Cth); Workplace Gender Equality Act 2012 (Cth)

- Company and contract law, and competition and consumer protection: Competition and
Consumer Act 2010 (Cth)

- AS/NZS ISO 31000:2009 Standard.

e. List the key stakeholders that should be involved in the risk management process and
their positions in the company

Chief executive officer: Rose Hargreaves

Managing director of Financial operations: Mike Booth

Managing director of Business operations: Sean Bamford

Managing director of Retail operations: Nancy Tooket

Managing director of Human resources: Sayo Yoshida

f. Indicate the key stakeholders that you need to gain support from

Rose Hargreaves

Nancy Tooket

Mike Booth

6|Page
 Report & Risk Management Plan
g. Use the information gathered to complete the risk management plan templates over the
page:

Identification and analysis

Grade Level of likelihood

A Expected (will occur regularly)

B Probable (will occur at some stage)

Risk likelihood legend

C Possible (could occur)

D Improbable (could occur but unlikely)

E Rare (may occur but in limited situations)

Grade Level of impact

1 Insignificant

2 Minor
Risk impact/
consequence legend
3 Moderate

4 Major

5 Catastrophic

Risk categorisation matrix

Level of Level of impact

likelihood
1 2 3 4 5
(Insignificant) (Minor) (Moderate) (Major) (Catastrophic)
A (Expected)
Medium Medium High Extreme Extreme 25

B (Probable)
Medium Medium Medium High Extreme

C (Possible)
Low Medium Medium High High

7|Page
 Report & Risk Management Plan
D (Improbable)
Low Low Medium Medium High

E (Rare)
Low Low Low High Medium

Risk categorisation table

Priority Risk Likelihood Impact Level of risk

International Incidents

2 Using toxic or banned chemicals in their products B 4 Hight risk

and polluting the environment.

3 Floods affected suppliers, affecting our online A 4 High Risk

sales.

National Incidents

4 Global financial situation. C 3 Intermediate Risk

5 Government tax increases, leadership challenges B 3 Intermediate Risk

and corruption.

Organisational Incidents

1 Online purchasing system A .4 High Risk

problems/disconnections, good not being delivered
on time

6 Information systems and warehousing/logistics A 2 Low Risk

systems are more than 10 years old.

8|Page
 Report & Risk Management Plan
Risk control/treatment

Activity: Online purchasing system problems/disconnections

Risks
• good not being delivered on time.

• dissatisfied customers

• control management

Control measures/ Control measure Strength Weakness

treatments
Weekly data analysis Meeting the Lack of time to update and fix the
changing needs of online site.
customers.

Customer feedback Hearing from them Lack of time to collect all of the
about their feedbacks
experiences

Annual systems IT Website to control Most of the devices need to be

the devices. renovate
revision

Impact of risk/s on Customer Service - Increase of customer issues.

areas outside your
responsibility Production - Doing and delivery the product.

Personnel Directors.
involved
Employees.

Owners.

Community.

Vendors.

Expected Increase sales

outcomes of risk
treatment plan Excellent reviews about clients

Achieve the BizOps’s objectives

Activity: Using toxic or banned chemicals

Risks ● polluting the environment.

● change the product

● against legislation

9|Page
 Report & Risk Management Plan
Control measures/ Control measure Strength Weakness
treatments
Change the Reduce toxic 50/50
chemicals

Use chemicals Use the maximum More expensive products

approved by allowed toxicity
legislation

Adopt environmental Reduce pollution Lack of time to make the changes

friendly conducts caused by the
company

Impact of risk/s on Production - Doing and delivery the product.

areas outside your
responsibility Marketing and sales: how to promote products

Administration: process different kinds of documents

Personnel Directors.
involved
Employees.

Owners.

Government.

Suppliers.

Expected Increase sales

outcomes of risk
treatment plan Achieve the BizOps’s objectives

Improve product quality

Reduce environmental effects

Activity: Floods affected suppliers

Risks ●. product quality

● affecting online sales.

● increase of expenses

● management

● labour

Control measure Strength Weakness

10 | P a g e
 Report & Risk Management Plan
Control measures/ Training Improve working Spend too much time and money
treatments
skills

Expend supplier Reduce cost Uncontrolled trusty of suppliers

range

Follow high Less future risk Spend too much time and money
standard

More stock Have enough Cost too much

products

Impact of risk/s on Purchasing: negotiate with new suppliers

areas outside your
responsibility ICT: update the information of products

HR: find out training people

Administration: process different kinds of documents

Personnel Training managers

involved
HR managers

Accountants

ICT department

Expected Excellent reviews about clients

outcomes of risk
treatment plan Reduce cost

Improve customer service skills

Improve product quality

Find out reliable suppliers in 3 months

Have enough stock

Activity: Global financial situation

Risks Managers

Financial

Employees

Regulation

Technologies

Legislations
11 | P a g e
 Report & Risk Management Plan
Control measures/ Control measure Strength Weakness
treatments
Improve equipment Reliable efficient Increase running cost
and control system timely

Hire more experts Advantage on More cost on training respects and

training staff, more human resources management
skilled staff

Training Improve working Spend too much time and money

skills

Modify the company More consistent May cause conflicts with others
policies and
procedures

Attract investors Sufficient fund and The process of finding on investors

better cash flow to can cost time and money
support development

Impact of risk/s on Modify procedure might cause chaos to different department, bring up temporary
areas outside your
low efficiency or several issues
responsibility
Personnel Directors.
involved
Employees.

Owners.

Government.

Community.

Managers
Expected outcomes of
risk treatment plan Increase sales

Strong relationship with the stakeholders.

Achieve the BizOps’s objectives

Further modify will be processed

Consistency improvement

Activity: Internal crises

Risks
• Government tax increases;

• leadership challenges;

12 | P a g e
 Report & Risk Management Plan
• corruption;

• media disclosure.

Control measures/ Control measure Strength Weakness

treatments
Hire reliable and Deal with challenges Lack of time to hire the team
experienced staff properly

External audit Experienced team Lack of time for delivery

Revaluate costs Avoid loss Costumers may not be happy

according to tax
increase

Impact of risk/s on Training managers

areas outside your
responsibility HR managers

Accountants

Personnel Directors.
involved
Employees.

Owners.

Government.
Expected outcomes of
risk treatment plan Increase sales

Excellent reviews about clients

Strong relationship with the stakeholders.

Achieve the BizOps’s objectives

Activity: Outdated information systems and warehousing/logistics systems

Risks System

Logistics

Man

Control management

After sales services

Control measure Strength Weakness

13 | P a g e
 Report & Risk Management Plan
Control measures/ Introduce policy Warranty and Spend much time and money
treatments
guaranty

More warehouse Reduce delivery time Cost too much

Update website and Effective, more Need cost and time

links humanised

Improving tracking Make product safer, Cost in setting up new system

system know where product
is

Annual systems IT Website to control Most of the devices need to be

the devices. renovate
revision

Impact of risk/s on Customer Service - Increase of customer issues.

areas outside your
responsibility Production - Doing and delivery the product.

IT Team - Change most of the systems and devices.

Personnel Directors.
involved
Employees.

Owners.

Community.

Suppliers.

Vendors.
Expected outcomes of
risk treatment plan Increase sales

Achieve the BizOps’s objectives

Safety and security

Quality of product

Service are optimized

14 | P a g e
 Report & Risk Management Plan
Task 3 Question 2
a. Write a summary of the strength and weaknesses of the existing arrangements to
adequately address the identified risks:

Risk STRENGTHS WEAKNESSES

Toxic or banned chemicals Reduce toxic 50/50

Online purchasing system Meeting the changing needs of Lack of time to update and fix the
problems/disconnections customers. online site.

Floods affected suppliers Find another supplier during this More investment, lack of time to find
period one that reach all the requirements.

Global financial situation. Maintain a good service to keep Lack of time to make all the
selling and overcome the crisis necessary improvements

Government tax increases, Experienced team Lack of time for delivery

leadership challenges and
corruption.

Information systems and IT Website to control the devices. Most of the devices need to be
warehousing/logistics systems renovate
are more than 10 years old.

b. Critical success factors that ensure the risks are addressed:

In 2015–2020 BizOps will consolidate its position in the market as a lead retailer for ‘green’ and
sustainable solutions for high quality exclusive products.

To do this, BizOps will focus on the following business goals:

• Financial stability:

Increase revenue by 15% (compared to the previous 12 months) by the end of the financial year

Maintain annual profit levels of 15% of revenue for all products and services, calculated at the end of each
financial year

Reinvest 75% of profit back into the business at the end of each financial year

• Market position:

Maintain the number one rating in the annual national industry customer service awards

Launch new high quality exclusive consumer products to meet customer demand, ahead of competitors,
within budget and by the agreed deadlines

• Right people:

15 | P a g e
 Report & Risk Management Plan
Provide induction training at the commencement of employment to train new employees to be
knowledgeable, helpful and enthusiastic

Provide the physical, human and time resources to support an annual professional development program
for all BizOps employees

Success will be dependent upon:

• Exceptional product and service quality

Each store will maintain its establishment base of full-time equivalent employees. All of these staff will
have formal retail qualifications and be provided with internal product and service knowledge training.

The product delivery service provided is recognised as part of the BizOps brand.

• Time-efficient and cost-effective development processes

Communication systems are in use to reduce travel and time commitments of outlet managers.

• Expert and knowledgeable staff

BizOps employs multiskilled retail sales staff capable of providing after sales product support to
customers.

c. Strategies you will use to consult with stakeholders to identify and assess risks, invite
participation and explain the risk management processes:
1. Risk identification
Risk identification is a structured approach to identifying the events that, if they were to occur,
could have a negative impact on the organisation.
2. Risk rating
Risk rating is a process to analyse and understand each of the risks, including understanding what
causes the risk to occur and what controls are already in place to manage the risk. Risk
assessment also determines:
• how severe a potential impact could be
• the likelihood of the organisation being negatively impacted in this way.

Once the potential impact and likelihood have been assessed, the risk assessment process
considers whether the risk is acceptable to BizOps, or whether further treatments are required to
reduce the level of risk.
All identified risks shall be assessed to determine the overall ranking for the risk. Risks are ranked
in the following four categories:
• Extreme
• High
• Medium
• Low

The ranking of a risk determines:

• the nature of further action that is required
• the urgency with which further action should be undertaken
16 | P a g e
 Report & Risk Management Plan
• the reporting requirements for the risk, including who the risk is reported to
• how the risk is monitored.

All risks within BizOps are ranked using a common scale that assesses:
• the potential consequences if the risk were to occur
• the likelihood of BizOps being impacted in that way.

A common approach to risk ranking is necessary to ensure that the largest risks to BizOps can
readily be identified and risk management can be prioritised in a way that has the greatest overall
benefit to the organisation.

3. Risk controls
Controls represent a whole range of actions, measures and strategies taken by management and
employees to eliminate or reduce risks. The process of determining risk controls includes
assessing the consequences and likelihood of the risk and evaluating how to treat the risk. This
could include:
• avoiding the risk
• mitigating the risk
• transferring the risk
• accepting the risk.

A process should then be followed to identify efficient and effective ways to mitigate the risk. This
can occur by either:
• removing the risk
• reducing the likelihood of the risk impacting BizOps
• reducing the consequences if the risk were to occur
• a combination of these approaches.

Consider the hierarchy of control:

• Elimination
• Substitution
• Engineering controls
• Administrative controls
• Personal protective equipment

4. Risk monitoring and reporting

Risk monitoring and reporting involves a process of regular review to ensure that:
• new risks are identified and considered as they arise
• existing risks are monitored to identify any changes that may impact the organisation
• new risk controls are being implemented
• existing risk controls are still in place and working effectively
• information about risks is adequately communicated.

All risks rated as moderate, significant or high in the risk identification process will be reviewed by
the risk management policy committee regularly. This review will be via either:
• the risk manager reporting on new risks identified by staff during the course of their work since
the last committee meeting
17 | P a g e
 Report & Risk Management Plan
• risk owners providing a report on the status of their assigned risk to the committee (see below)
• the risk manager reporting on reviews of the risk register following a Structured Risk Identification
Workshop each year, or any review of the risk register by the Executive.

The risk owner’s reports to the committee should outline that the risk controls are to indicate:
• causes of the risk
• implication of the risk with amendment to existing controls (if they exist)
• what any existing mitigating controls are
• what actions are being undertaken to put further controls in place, or maintain existing controls,
and by when
• who is responsible for ensuring the controls are in place.

d. Other possible sources of data that may apply to the scope of this project: for
example, market research, information from other businesses.

Market position

BizOps offer quality, high-end, innovative and exclusive consumer products. We provide a quality
service to our customers, focusing on ‘green’ solutions. We participate actively in trade fairs to
ensure we have the latest high-end consumer products available for our customers.
Unique selling position
Our distribution of retail outlets across Australia allows us to provide the personal level of service
customers expect with exclusive products, but we also provide service through online and phone
stores in each state. Our customer service is knowledgeable and friendly. We reward our
customers for their loyalty.

Anticipated demand
A large number of customers purchase our lower priced items, valued at $500–750. We sell
approximately 16,000 items in this price range every month across our 150 stores. Our large
corporate clients purchase on average twice a year, spending approximately $10,000–15,000 per
purchase. Our VIP individual customers (approximately 1,000 nationally) purchase on average one
larger/high-end item per year and between 5 and 10 lower priced items. Their spend averages to
approximately $10,000 per annum.

Pricing strategy
BizOps applies standard industry mark-ups for lower priced items. Our high-end items are often
unique in the market and are priced accordingly, based on our purchase price and understanding
of the market.

Value to customer
BizOps individual customers view us as a destination for quality goods with a ‘green’ bias. Our
corporate clients trust us to provide high quality products and services that will perform above
18 | P a g e
 Report & Risk Management Plan
expectation and impress their clients. Our VIP customers are discerning and rely on us to keep
them up to date with the latest in exclusive consumer products.
Growth potential
BizOps is aiming for 15 per cent growth in revenue per annum. This growth will come in part from
technology improvements and innovation resulting in better products with a lower impact on the
environment. As this happens, our environmentally conscious customers will want to upgrade their
products. Growth will also occur naturally as the population in Australia continues to increase and
accumulate more wealth. The home is one area that Australians take great pride in furnishing and
exclusive products are increasingly sought after.

Task 3 Question 3
Risk categorisation table

Risk Analysis Priority level

of risk

Online purchasing system Weekly data analysis, be aware of costumer’s 1 Hight risk
problems/disconnections, goods not feedback.
being delivered on time

Toxic or banned chemicals Reduce toxicity and change the chemicals used. 2 Hight risk
Swap for approved and with no dangerous of
intoxication.

Floods affected suppliers, affecting our
online sales.
Look for another supplier that will be able to 3 Hight risk
provide the supplies. Meanwhile, explain to the
costumers the late deliveries and add a notice
on the online sales platform to let them know
about the situation before they purchase.

Global financial situation. Improve everything that is affecting the sales to 4 Medium
make it increase, invest in the national market.

19 | P a g e
 Report & Risk Management Plan

Government tax increases, leadership External audit, hire experienced and reliable 5 Medium
challenges and corruption. team

Information systems and Annual systems revision and renew everything 6 Low
warehousing/logistics systems are more that is outdated
than 10 years old.

Recommendation and Conclusion

Finalize your strategic plan after obtaining input from all invested parties; Align your budget to annual
goals based on your financial assessment; Produce the various versions of your plan for each group;
Establish your scorecard system for tracking and monitoring your plan; Establish your performance
management and reward system; Roll out your plan to the whole organization; Build all department
annual plans around the corporate plan; Set up monthly strategy meetings with established reporting
to monitor your progress; Set up annual strategic review dates, including new assessments and a
large group meeting for an annual plan review.

References

1. BizOps Enterprises Business Plan (extract) 2015–2020

2. BizOps Enterprises vision, mission and values statement
3. BizOps Enterprises Operational Plan
4. Project: Managing risks at BizOps Enterprises
5. BizOps Risk management procedures

20 | P a g e