Assessment Task 1 - Identify risk and plan risk

management
Performance objective
This assessment task requires candidates to demonstrate the skills and knowledge necessary for
identifying risk and planning risk treatment in the context of a simulated business.

Assessment description
To complete this assessment task, you will need to review a simulated business and associated
documentation, identify and document risks, analyse and evaluate risks to determine level of risk for
the organisation, and plan to treat risk. You will need to perform these activities in accordance with
organisational requirements and the international and Australian Standard for risk management,
AS/NZS ISO 31000:2009.

Procedure
1. Read the following scenario:

You have recently been assigned to work in a project team charged with the implementation of
the new business endeavour for MacVille. Your duties within the project team include:

● risk identification
● analysis
● evaluation
● implementing and monitoring risk treatment, particularly in own areas of specific
responsibility: communications, training, demonstrating procedures for affected managers
and staff.

As the project leader, you will need to identify possible risks, particularly risks with strategic
impact for MacVille. Some research (for example, internet research of PNG conditions or
legislative requirements) may be necessary to identify risk and establish context. In accordance
with the relevant risk management standard, you will need to analyse and evaluate risks,
ensuring you consult with stakeholders to assist you with this important task.

In accordance with MacVille requirements, you will need to follow MacVille risk management
policy and framework and reporting requirements. MacVille requires the completion of a risk
register for each venture or project and a risk treatment action plan.

It is now the beginning of the first quarter of the financial year. MacVille expects risk
management activities to have begun (or be ongoing) simultaneously with implementation of
production by end of second quarter.

SIBN College V1.0 Nov 2018 Page 1 of 11

 2. Review the MacVille simulated business information provided on Moodle.
3. Review the MacVille scenario in the appendix 1 of this assessment task.
4. Identify the internal and external context for risk management with respect to the MacVille
scenario, including organisational policy, procedures and processes for risk management.
5. Create risk identification, analysis and treatment report covering all the points below:
a. Identify three risks using tools (for example, checklists, research notes, notes of
meetings with stakeholders). Write the tools you used and explanation of your use of
tools to identify risks
b. Analyse each identified risk to determine the likelihood and consequence of each risk
c. Determine the level of risk for each risk. You may use risk matrix to determine level of
risk.
d. Complete the Appendix 2 - risk register template.
e. Consult with stakeholders (assessor and team members) to assist your analysis and
evaluation of risk, using questioning and listening techniques to gather information from
stakeholders.
f. Weigh possible control measures for each risk, assessing strengths and weaknesses of
each measure. You can use Appendix 3
g. Determine final control measures for each risk.
h. Determine resources and responsibilities and timeline for control of risks. Resources
may include financial resources, human resources, or any equipment to implement
control of risks. You can use Appendix 4: MacVille risk treatment action plan
template
i. explain how your process was consistent with organisational requirements and AS/NZS
ISO 31000:2009, and comment on the purpose and key elements of current risk
management standards, including audit requirements

Submission:
You must submit:

● Risk identification, analysis and treatment report including Appendix 2, 3 and 4.

SIBN College V1.0 Nov 2018 Page 2 of 11

Your assessor will be looking for:

● reading skills to understand documents and texts of varying complexity to extract and analyse
relevant information
● writing skills to use specific, industry-related terminology and logical organisational structure
in workplace documents that identify and analyse risk and report management outcomes
● oral communication skills to participate effectively in interactions with stakeholders by using
questioning and listening to elicit opinions and clarify understanding, and using appropriate
communication protocols and conventions
● ability to comply with organisational and legislative requirements
● ability to take responsibility for identification and management of risk within own work context
and refer matters to others as required
● ability to select appropriate communication protocols and conventions when conferring with
others to establish risk management requirements
● ability to determine job sequence and work logically and systematically to undertake defined
tasks
● ability to use analysis and consultative processes to inform decisions about selection and
implementation of risk control measures
● ability to use familiar digital technologies and systems to access information, prepare plans and
communicate with others
● demonstrated knowledge of key provisions of relevant legislation from all levels of government
that may affect aspects of business operations, such as: ethical principles, codes of practice,
privacy laws, health and safety etc..

SIBN College V1.0 Nov 2018 Page 3 of 11

Appendix 1: Scenario – MacVille
MacVille is an Australian coffee supply business. The company imports coffee and supplies cafes and
restaurants with top quality coffee, which is produced and distributed in line with the highest social
and environmental standards. Within five years, MacVille intends to have established itself as the
number one coffee supplier for fine coffee shops and restaurants in Australia. To achieve the company
vision, MacVille’s strategic directions include:

● engaging clients with excellent service to increase sales volume

● reducing expenditure and achieving financial control over expenses
● establishing MacVille as employer of choice through supporting innovative thinking,
performance management and leadership skills through training, and exemplary health and
safety performance
● monitoring supplier quality and triple bottom line impact.

These strategic directions are reflected in sales and operational targets at every level of the company
and are also reflected in individual performance measures. The organisation must effectively identify
and manage risk to strategic goals.

MacVille strategic assets

In general terms, MacVille possesses the following strategic assets which may be considered at risk in
any venture, project or aspect of day-to-day operations:

Asset Description
Workforce The MacVille workforce is loyal, expert and motivated. The workforce includes:

● sales teams and managers

● roasters and managers of production and packaging team

● distribution team and managers.

MacVille’s reputation as employer of choice is a key strategic asset. MacVille

trains its workforce and management team and commits to staff development and
advancement. MacVille pays extremely competitive wages and commits to staff
wellbeing through wellness and health and safety management programs.
MacVille’s commitment to staff extends to involving staff and seeking feedback on
organisational strategic directions and activities, particularly activities directly or
potentially affecting staff.

SIBN College V1.0 Nov 2018 Page 4 of 11

Asset Description
Technology MacVille possesses expert, proprietary roasting equipment and techniques.
Techniques are most important and are a closely guarded secret. Using MacVille
in-house equipment and techniques allows MacVille to tightly ensure production
quality and supplies of product for sale.

Supplier MacVille maintains a tightly knit network of suppliers to ensure supply and
relationships advance notice of potential supply issues. Suppliers are loyal to MacVille.
MacVille encourages such loyalty by paying fair prices for raw beans and making
regular purchases.

Reputation The MacVille business model is underpinned by its commitment to triple bottom
line reporting and responsibility: social, economic, and environmental
responsibility. A key to MacVille’s success with customers has been its
commitment to fair trade practices.

Identifying particular risks to individual projects or ventures will require research and information
gathering on the internal and external context of risk concerning MacVille. Such information
gathering may include research into local, domestic and international political, environmental, social
and technological conditions, standards, and codes of conduct. It will necessitate direct or indirect
consultation with internal and external risk stakeholders.

Note that, in analysing risk consequence, MacVille adheres to the following guidelines:

● Insignificant: Less than 5% of revenue

● Minor: 5–10% of revenue
● Moderate: 10–20% of revenue
● Major: 20–40% of revenue
● Catastrophic: above 40% of revenue.

A new venture
MacVille has established a relationship with a small village in the highlands of Papua New Guinea
(PNG) that grows coffee beans. MacVille is committed to providing equipment and high-level skilled
training to the village so that the local villagers can harvest and roast the beans in-country, rather than
exporting the green beans, as they currently do. MacVille will develop the village’s capacity in
exchange for cheaper roasted beans. The costs of development are budgeted to be less than or equal to
the savings gained. The village will incorporate, with every villager a shareholder in the new venture.
The village will eventually become a completely independent supplier.

It is anticipated that PNG could potentially supply up to 20% of MacVille’s roast bean supplies.

SIBN College V1.0 Nov 2018 Page 5 of 11

This endeavour is a major marketing coup for MacVille, as they can strongly market the Fairtrade
certification aspects of this, due to the large investment they are making into the village and the
skilled-trade ability they are giving to the villagers.

It will have additional benefits to MacVille, which include saving considerable amounts of money in
both energy and water use, not to mention domestic labour costs and cost of sales.

The venture is not expected to have any effect on domestic production, jobs, advancement, etc., due to
increased efficiencies, expansion into new markets, and increased sales made possible by the venture.

Stakeholders and project team members:

Name Position Duties/importance to operations/reason for stakeholder

interest
John Wu Operations
● Chair of FARM Committee and project owner: full
Manager
decision-making powers for project
● overall responsibility for ensuring supply, production,
supplier relationships
● monitoring supplies

● monitoring production expenses.

Cindy Communications
● responsibility for overseeing, planning, implementation
and Training
and risk management
Officer
● particular responsibilities for implementation include
Project Leader communications and training for project team members,
board of directors, FARM Committee and Australian
staff and managers
● you will be reporting to the MacVille board of directors
and the Finance and Risk Management (FARM)
Committee.
Oliver Hughes Australian
● monitoring production to achieve production targets
Human
Resources and ● maintaining and overseeing staff performance and
Training morale.
Manager

Yosef Malouf PNG Fairtrade

● ensuring and monitoring safety standards, and the social,
Consultant
economic and environmental impacts of MacVille
(contracted to
operations in PNG
MacVille)
● does not speak local dialect.

SIBN College V1.0 Nov 2018 Page 6 of 11

 Name Position Duties/importance to operations/reason for stakeholder
interest
Geoffrey PNG Quality and
● ensuring and monitoring MacVille standards of quality
Blanche Production
and rate of production to meet MacVille requirements
Officer
(MacVille ● point of contact between MacVille and PNG supplier
employee) ● does not speak local dialect.

Connie Black Sales and

● responsibility for monitoring and meeting sales targets,
Marketing
understanding customer and client needs and concerns.
Manager

Harold Jones Consultant in

● speaks both pidgin and the local village dialect, so he
PNG
can liaise with clan chief, Dikana
(contracted to
MacVille on ● high-level contacts and influence within PNG
monthly basis) government.

SIBN College V1.0 Nov 2018 Page 7 of 11

Assessment Task 1 BSBRSK401

Appendix 2: MacVille risk register template

Risk Risk consequence Risk likelihood Risk level

(Low, Medium, High, Extreme)

1. Health and safety issue Moderate Unlikely Medium

2. Technology: Moderate Unlikely Medium

Techniques and technology on roasting coffee are most

important and are a guarded secret which might be stolen
by other company

3. Financial issue: Minor Moderate Medium

Expenses is bigger than expected

4. Product quality: Moderate Unlikely Medium

Quality of the goods from PNG didn't meet MacVille

expectation

SIBN College V1.0 Nov 2018 Page 8 of 11

Assessment Task 1 BSBRSK401

Appendix 3: Weigh possible control measures

SIBN College V1.0 Nov 2018 Page 9 of 11

Assessment Task 1 BSBRSK401

Identified risks Possible control measures Strength Weakness

1. Health and safety issue Translate health and safety policy in Better understanding of policy Cost
PNG language

Adjust the policy to PNG regulations Better understanding of policy Cost

Policy meets PNG culture and Policy different from MacVille's

standards practices

2. Technology Implement policy to protect technology Promote protection of technology Cost

Sign confidentially agreement for Incentives to not steal technology Cost

technology
Protect company in case of risk Technology still at risk
happen

3. Financial issue Implement a monitoring system Better financial control in Cost

performance
Time

4. Product quality Train villager on good agricultural Improve quality of product Cost
practice
Time

SIBN College V1.0 Nov 2018 Page 10 of 11

Assessment Task 1 BSBRSK401

Appendix 4: MacVille risk treatment action plan template

Risk treatment activity/control Resources required Person responsible Timelines
1. Health and safety issue:

Translate health and safety policy in PNG language Translator needed Yosef Malouf 4 weeks

Adjust the policy to PNG regulations Harold Jones

2. Technology

Implement policy to protect technology Technology IP protection Cindy 4 weeks

Sign confidentially agreement for technology Confidentially agreement Oliver Hughes

3. Financial

Create and implement a monitoring system Monitoring procedures Cindy 6 weeks

4. Product quality Oliver Hughes

Train villager on good agricultural practice Presentation documents Yosef Malouf 8 weeks

Room to present Harold Jones

Review and maintenance requirements:

Regular monitoring and evaluating is needed.

SIBN College V1.0 Nov 2018 Page 11 of 11