BSBOPS504

Manage business risk

 2

Topic 1: Overview of risk management

BSBOPS504 Manage business risk

 3

WHAT DOES “RISK MANAGEMENT” MEAN?

Managing risk in business is about using sound judgement and decision-
making skills to reduce the consequences of risk while still making the
most of the opportunities available to you.

Topic 1: Overview of risk management

Topic 1: Insert topic title
BSBOPS504 Manage business risk
 4

ACTIVITY: REFLECT
Think about some of the risks in your personal and work/study life.
• Have you deliberately taken any risks that have been a success?
• Have you taken any risks that have caused you to fail?
• Have you taken any steps to avoid or manage any of the risks you’ve thought
about?

Topic 1: Overview of risk management

BSBOPS504 Manage business risk
 5

WHAT IS RISK?
A risk in business management can be seen as anything that:
• could prevent the organisation from achieving goals it has set for itself.
• could result in a negative outcome for the enterprise.

Topic 1: Overview of risk management

Topic 1: Insert topic title
BSBOPS504 Manage business risk
 6

WHAT IS RISK?
Types of risks include:
• Strategic risk
• Compliance risk
• Financial risk
• Operational risk.

Topic 1: Overview of risk management

Topic 1: Insert topic title
BSBOPS504 Manage business risk
 7

ACTIVITY: BRAINSTORM
In small groups:
• brainstorm more examples for each type of risk.
• explain what their impact might be on an organisation.
• say whether the risks are direct or indirect.
Your trainer will facilitate a group discussion to create a complete list of examples.
Take notes and keep them for future reference.

Topic 1: Overview of risk management

BSBOPS504 Manage business risk
 8

ACTIVITY: REFLECT
Do you have any personal experience of any of the types of risks listed above?

Topic 1: Overview of risk management

BSBOPS504 Manage business risk
 9

WHAT ARE COMMON SOURCES OF BUSINESS RISK?

• Regardless of the type of business risk you are identifying, there are
common sources of risk.
• These can either be internal or external sources.

Topic 1: Overview of risk management

Topic 1: Insert topic title
BSBOPS504 Manage business risk
 10

ACTIVITY: RESEARCH AND DISCUSS

Work in a group and answer the questions:
• What is meant by “internal” sources of risk in a business or organisation? Provide
examples.
• What is meant by “external” sources of risk in a business or organisation? Provide
examples.
Your trainer will facilitate a discussion to summarise your research. Take notes and
keep them for future reference.

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 11

WHAT ARE COMMON SOURCES OF BUSINESS RISK?

The three most common categories of business risk sources are:
• natural causes
• human causes
• economic causes.

Topic 1: Overview of risk management

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 12

ACTIVITY: PRACTICAL
Look at the examples of risk sources and answer:
1. Classify each risk as internal or external.
2. Which category does each risk fall into (natural, human, economic)?
3. Who would be responsible for the risk?

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 13

WHY IS RISK MANAGEMENT IMPORTANT?

ACTIVITY: DISCUSS
Consider the quote.
• In a group, discuss this quote.
• Do you agree with it?
• How is right? How is it wrong?

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 14

WHY IS RISK MANAGEMENT IMPORTANT?

Depending on the consequences of the risk, risks should be taken or
avoided. When the consequences of risks we take are negative, we can
learn from the outcome and plan for the future.

Topic 1: Overview of risk management

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 15

WHAT PROCESS SHOULD I FOLLOW TO MANAGEMENT RISK?

Given the importance of risk management (including the legal
obligations), a deliberate and consistent approach is required to identify,
mitigate and respond to risk. In many businesses a risk management
team is put together and charged with heading up the process.

Topic 1: Overview of risk management

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 16

WHAT SOURCES OF INFORMATION SHOULD I CONSIDER FOR RISK

MANAGEMENT?

ACTIVITY: REFLECT
In the ICT industry “Garbage in, garbage out” (GIGO) is the concept that flawed or
incorrect input data produces flawed or incorrect output or "garbage".
Reflect on how this concept applies to sourcing reliable information when managing
risk in a variety of contexts in an organisation.

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 17

WHAT SOURCES OF INFORMATION SHOULD I CONSIDER FOR

RISK MANAGEMENT?
Relevant information sources include:
• Stakeholders • Organisational documentation
• Legislation • Best practice examples
• Regulations and codes of practice
• Industry standards

Topic 1: Overview of risk management

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 18

ACTIVITY: RESEARCH AND DISCUSS

Research legislation relevant to your workplace or industry of interest (such as mining,
manufacturing, transport, building, education or health) that may be associated with
risk management.

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 19

ACTIVITY: RESEARCH
Work together in small groups to:
• choose an industry or work area you work in or are interested in (e.g. mining, ICT,
finance, education, sales etc.).
• research any regulatory bodies and codes of practice associated with the work area
or industry.
• share your findings with the larger group (your trainer will provide guidance on how
to do this e.g. PowerPoint presentation or document sharing etc.).

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 20

ACTIVITY: READ
Read more about the AS/NZS ISO 31000:2018:
Website:
https://infostore.saiglobal.com/preview/332265330632.pdf?sku=1134720 _SAIG_AS_A
S_2680492

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 21

ACTIVITY: DISCUSS
As a group discuss the purpose and key elements of the standard.
Take notes and keep them for future reference.

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 22

ACTIVITY: EXPLORE
Explore a few of the policies and procedures that may apply to a risk management.

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 23

HOW CAN RISK MANAGEMENT BE SUPPORTED IN AN

ORGANISATION?
• A variety of information sources should be consulted throughout the
risk management process.
• As the risk process is being established, time must be taken to ensure
there is support for the process and for the activities.
• If mistakes are made, it’s vital to learn from these and to identify ways
to minimise future risk.

Topic 1: Overview of risk management

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 24

ACTIVITY: READ
If you’re not familiar with the details of the explosion, read more in the news report
below.
News report:
https://www.nytimes.com/2020/08/04/world/middleeast/beirut-explosion-blast.html

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 25

ACTIVITY: PRACTICAL
Consider the article you’ve just read about the Beirut explosion. To complete this
activity, work in small groups.

Topic 1: Overview of risk management

BSBOPS504 Manage business risk © 2020 RTO Works
 26

Topic 2: Establishing risk management in an

organisation

BSBOPS504 Manage business risk © 2020 RTO Works

 27

In the previous topic, we looked at the four general steps in a risk

management process. This topic addresses the first two steps in the
process (identify and analyse risk).

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 28

WHAT DOES “RISK CONTEXT” MEAN?

Risk context is the totality of the business environment (both internal and
external) in which the organisation operates.
It can be determined by a combination of:
• undertaking an internal protocols review • analysing the external environment
• defining the risk management scope of the business

• identifying stakeholders and their related issues • assessing internal conditions.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 29

ACTIVITY: PRACTICAL
Think back to the practical activity you did at the end of Topic 1 (Beirut explosion -
https://www.nytimes.com/2020/08/04/world/middleeast/beirut-explosion-blast.html).
Assume the explosion has not yet occurred.
1. Analyse the external environment of the business
2. Analyse the internal environment of the business for strengths and weaknesses.
3. Define the scope for risk management at the warehouse.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 30

HOW DO I DETERMINE GOALS AND OBJECTIVES?

To establish the risk management goals and objectives, first review,
identify and record the strategic and operational goals and objectives of
the organisation.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 31

ACTIVITY: REFLECT
How can the strategic and operational goals and objectives can be identified?
Hint: Look back to the section on “Sources of information” in topic 1.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 32

HOW DO I DETERMINE GOALS AND OBJECTIVES?

Once strategic and operational goals and objectives have been
established, specific risk management goals and objectives can be
created.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 33

HOW DO I ESTABLISH CRITICAL SUCCESS FACTORS?

• Critical success factors (CSF) are the things the business must do
correctly or ‘get right’ in order for the organisation to succeed.
• CSFs need to be comprehensively documented so that everyone
understands what success requires.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 34

ACTIVITY: WATCH
Watch the video about critical success factors.
Video: https://www.youtube.com/watch?v=0kApm47ClzQ (01:44)
Takes notes and keep them for future reference.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 35

ACTIVITY: PRACTICAL
Think back to the practical activity you did previously in this topic (Beirut explosion -
https://www.nytimes.com/2020/08/04/world/middleeast/beirut-explosion-blast.html).
Assume the explosion has not yet occurred:
1. List at least two possible strategic and/or operational goals of the warehouse.
2. For each strategic and/or operational goal, write a risk management goal or
objective.
3. What are potential CSFs for managing risk at the warehouse?

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 36

WHAT DOES “IDENTIFYING RISKS” INVOLVE?

Once you have established the context of risk management and set goals
and objectives for the risk management process, risks should be
identified within in the pre-defined scope.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 37

HOW DO I COMMUNICATE WITH STAKEHOLDERS?

The method used for communication used will depend on:
• the type/role of the stakeholder
• the policies and procedures of the organisation
• geographic location of the stakeholder
• legislative requirements (e.g. written notice may be required).

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 38

ACTIVITY: BRAINSTORM
Look back to the list of stakeholders identified in Topic 1 (go to the “Sources of
information” section). Work together with a partner to brainstorm:
• how each stakeholder may contribute towards identifying risks.
• the best way to communicate with the stakeholder.
Your trainer will facilitate a group discussion to summarise your findings.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 39

ACTIVITY: WATCH
Watch the video about questioning.
Video: https://www.youtube.com/watch?v=ImfU12epYcI (03:20)
Take notes and keep them for future reference.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 40

HOW DO I IDENTITY RISKS?

• A structured and formal approach is needed to help ensure no risks are
overlooked.
• The approach may involve stakeholders or require research.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 41

ACTIVITY: DISCUSS
As a group, discuss:
• which of the above methods involve stakeholders?
• which methods involve research?
• what sources of information can be used for the methods that involve research?
Take notes and keep them for future reference.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 42

ACTIVITY: READ
Are you interested in industry specific risks? The links given provide helpful insight for
further reading.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 43

ARE THERE SPECIFIC TOOLS OR TECHNIQUES TO HELP IDENTIFY

RISKS?

ACTIVITY: READ
Read the articles that explain tools and techniques to help identify risks.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 44

ACTIVITY: RESEARCH AND DISCUSS

Work together in a small group. Choose ONE tool or technique that can be used to
identify risks in an organisation or work area. Do research to:
• explain the tool in more detail
• provide an example to show how the tool is applied to risk management
• present your work to the larger group.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 45

HOW CAN I LEARN MORE ABOUT THE IDENTIFIED RISKS?

Once risks have been identified, find out as much as you can about the
risk.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 46

ACTIVITY: PRACTICAL
Think back to the practical activity you did previously in this topic (Beirut explosion -
https://www.nytimes.com/2020/08/04/world/middleeast/beirut-explosion-blast.html).
Undertake the tasks provided.

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 47

WHAT HAPPENS AFTER I’VE IDENTIFIED AND RESEARCHED

ALL POSSIBLE RISKS?
Next, a detailed analysis of each risk is required to determine:
• potential outcomes
• the likelihood of the potential outcome occurring
• the impact or consequence if the outcome occurs
• prioritising risks
• establishing potential risk treatments.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 48

HOW DO I DETERMINE THE LIKELIHOOD OF A RISK

OCCURRING?
For all risks the business elects to manage, the likelihood of each risk
occurring must be estimated.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 49

ACTIVITY: READ
If you’re interested in a more detailed explanation of calculating likelihood, read the
article below:
Article:
https://www.dummies.com/careers/project-management/assessing-the-likelihood-of-a-r
isk-in-your-project/

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 50

HOW DO I ESTABLISH THE IMPACT OR CONSEQUENCE OF A

RISK EVENTUATING?
The ‘likelihood’ and ‘impact’ are normally worked out at the same time.
The same principles described above for deciding ‘likelihood’ apply again
here.

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 51

ACTIVITY: READ
If you’re interested in a more detailed explanation of developing consequences, read
the article below:
Article: https://paladinrisk.com.au/risk-tip-3-developing-consequence-matrix/

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 52

HOW DO I PRIORITISE RISKS?

Once the likelihood and impact have been establishing, a risk rating can
be calculated by multiplying them together.

Risk = impact x likelihood

Topic 2: Establishing risk management in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 53

ACTIVITY: PRACTICAL
Continue working on the practical activity you did previously in this topic (Beirut
explosion -
https://www.nytimes.com/2020/08/04/world/middleeast/beirut-explosion-blast.html).

Topic 2: Establishing risk management in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 54

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works

 55

In the previous topic, we looked at the first two steps in the risk
management process. This topic explores the last two steps: control and
monitor.

Topic 3: Addressing risks in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 56

WHICH ACTIONS CAN I TAKE TO ADDRESS RISKS?

• Once risks have been prioritised, address each risk according to the
priority it was given.
• Treatment of risk refers to the way the business will handle the risk.

Topic 3: Addressing risks in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 57

ACTIVITY: BRAINSTORM
As a group, brainstorm risk examples of where each the actions “avoid risk”, “prevent
risk”, “contain risk” and “transfer risk” are applicable.
Can you think of any situations when you should accept a risk?
Your trainer will facilitate a group discussion to create a comprehensive list of
examples. Take notes and keep them for future reference.

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 58

ACTIVITY: REFLECT
Prior to COVID-19, most organisations would not have anticipated and planned for the
impact the pandemic has had.
How do you think COVID-19 has changed or shaped future risk management?

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 59

ACTIVITY: REFLECT
What do you think of when you hear the word “negotiation”?

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 60

ACTIVITY: WATCH
Watch the video showing a negotiation scene.
Website: https://www.youtube.com/watch?v=0CdixDzE7I0 (01:00)

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 61

ACTIVITY: DISCUSS
As a group, discuss how the video you’ve just watched is similar AND dissimilar to
workplace negotiation.

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 62

ACTIVITY: READ
Read the articles on negotiation skills and techniques:
Article 1: https://www.skillsyouneed.com/ips/negotiation.html
Article 2:
https://www.pon.harvard.edu/daily/negotiation-skills-daily/top-10-negotiation-skills/
Take notes and keep them for future reference.

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 63

WHAT DOCUMENTATION IS REQUIRED?

Once risks have been identified, researched, analysed and prioritised the
risks that apply to the scope should be documented according to the
organisation’s policy and procedure.

Topic 3: Addressing risks in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 64

ACTIVITY: READ
Read the example of a sample risk management plan.
Website:
https://www.northam.wa.gov.au/documents/708/sample-risk-management-plan

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 65

ACTIVITY: PRACTICAL
Create a list of everything contained in a risk management plan.

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 66

ACTIVITY: DISCUSS
As a group discuss examples of situations where stakeholder consultation is
necessary before risks are documented.
Take notes and keep them for future reference.

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 67

HOW DO I IMPLEMENT THE CHOSEN RISK TREATMENT?

• Standard practice is to develop an action plan for every risk that has to
be treated.
• Implementation of risk action plans must be prearranged, intentional
and scheduled.

Topic 3: Addressing risks in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 68

WHAT DOES THE MONITORING AND EVALUATION OF RISK

MANAGEMENT ACTIONS INVOLVE?

ACTIVITY: BRAINSTORM
Work together in small groups. Make a list of data that may result from an action plan
being implemented and that is relevant for monitoring risk.
Your trainer will facilitate a group discussion to create a comprehensive list of data that
may be used to monitor risk management.

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 69

WHAT DOES THE MONITORING AND EVALUATION OF RISK

MANAGEMENT ACTIONS INVOLVE?
Action plans need to be monitored to:
• capture information that can be used in the evaluation phase
• demonstrate due diligence
• identify new or modified risks
• determine when/if corrective or remedial action needs to be taken
relating to planned activities.

Topic 3: Addressing risks in an organisation

Topic 1: Insert topic title
BSBOPS504 Manage business risk © 2020 RTO Works
 70

ACTIVITY: PRACTICAL
Continue working on the practical activity you did at the end of topic 2 (Beirut explosion
- https://www.nytimes.com/2020/08/04/world/middleeast/beirut-explosion-blast.html).

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 71

ACTIVITY: SUMMARY
Congratulations! You have now completed all the content required to successful apply
your knowledge.
Create a mind map to summarise what you’ve learnt.

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works
 72

ACTIVITY: DEVELOP
It’s time to put what you’ve learnt into practice.

Topic 3: Addressing risks in an organisation

BSBOPS504 Manage business risk © 2020 RTO Works