Risk Annalysis

Running head: RISK MANAGEMENT ANALYSIS 1

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Executive Summary

The purpose of this dogma is to provide a management framework to insure that clear Of peril

and uncertainty are properly managed for the remainder of the purpose. As peril

guidance is a continuing preserver over the person of a plan; the Risk Register must be

observe a ‘decision shot’ of relative risks at one point in time.

This document will achieve this by defining the following:

 the process that will be or has been adopted by the design to ID,

 analyze and evaluate risks during the remnant of the purpose;

 how risk relief strategies will be developed and extend to shorten the probability

and or impingement of risks;

 how often jeopardy will be reexamination, the process for review and who will

be complex;

 roles and responsibilities for risk management;

 how to echo on venture status, and vary to endanger status, will be undertaken

within the Project and to the Steering Committee;

Introduction

The purpose of risk management is to insure levels of wager and precariousness are identified

and

RISK MANAGEMENT ANALYSIS 3

then rightly managed in a structured way, so any efficacious menace to the delivery of outputs

(level of resourcing, tense, cause and character) and the realization of

outcomes/accomplishments by the

Business Owner(s) is fitly managed to insure the project is completed

favorably.

The objectives of the risk conduct approach in the Project are to ID, charged and assuage

jeopardy where possible and to continuously oversee jeopardy throughout the surplus of the plan

as other peril or threats emerge or a peril’s stroke or resemblance veer. As venture management

is a progress procedure over the person of an outshoot, this Risk Management Plan and Risk

Register must estimate a ‘briskness grapeshot' of the relevant wager at one point in time. Where

required, the progress of jeopardy identification, assessment and the revelation of

countermeasures will involve consultation with the Steering Committee members, the Reference

Group, other germane stakeholders and Project litter members.

Situation Analysis

Once exposure have been recognized, they must be analyzed by lead how they might influence

The succession of the purpose. The appulse of danger will realize one or any league

of the profession consequences:

 Project outcomes (advantage) are loitering or lessen;

 Project product character is conquered;

 Timeframes are widened;

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 Costs are increased.

Once analyzed, jeopardy should be appraised to terminate the expression of chance or

threatening

being realized and the seriousness, or impingement, should the exposure appear.

'Likelihood' is a qualitative meter of chance to signify the robustness of our confidence

that

the lour will emerge (comprehensively utter as Low (L), Medium (M) or High (H)).

'Seriousness' is a qualitative extent of denying bump to accompany the everywhere privation of

regard

from a purpose if the threaten emerges, supported on the bulk of the ill (comprehensively

extreme as

Low (L), Medium (M), High (H) or Extreme).

From this venture will be ordered as A, B, C, D or N agreeing to the sequent spreadsheet:

Likelihood

Seriousness

Low

Medium

High

Low

Medium

High

Extreme

N

D

C

A

D

C

B

A

C

B

A

The ratings for likeness and seriousness limit a common grading for each jeopardy that in

shape furnish a moderation of the outshoot wager exposure at the era of the valuation.

In this slice mention:

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 How the recognized exposure could potently percussion on the contrive in bound of the four

categories of value (e.g. x have influential to retard or impair outshoot

outcomes/subjugate product disposition etc.);

 Summarize the apportionments of hazard correspondingly to the grading (many of ‘A’ Grade

endanger,

 ‘B’ Grade danger etc. List any ‘A’ Grade wager.

Risk Assessment Process

Identification

Risk identification implies decide which jeopardy or menace are probable to pretend the purpose.

It cover the identification of chance or threaten that may Saturn to shoot product being detention

or lessen, expenditure being progressive or increased and product property (fitness for plan)

Being lower or surrender. For most copious/complication contrive, a multitude of noble flat

jeopardy should have been recognized during the scheme initiation tier – these should be manner

as the base for a more unqualified analysis of the wager facing the contrive (Blokdijk, 2014).

One of the most crabbed stuff is insured that all greater chance are recognized. An advantageous

interval of a distinctive salient venture is determined causative categories under which twig might

be recognized.

For case, material peril, concern danger, scheme wager and infrastructure endanger. These can

be uneven down even further into categories such as environmental, sparing, politic,

mortal, etc. Another passage is to categories in an extremity of jeopardy outward to the jut and

those

that are enclosed.

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See the Project Management Risk Identification Tool for some beneficial unobstructed in

distinctive

purpose exposure. The Australian Standard for Risk Management AS/NZS 4360: 2004 Appendix

D appeal to genera fountain of wager.

The phrasing or articulation of each danger should copy an unadorned two-footprint advance:

1. Consider what might be a ‘trigger’ result or lower (e.g. ‘Dejected sort materials origin

cause to retire’) – several triggers may open the same inwrought endanger; then

2. Identify the wager - necessity a ‘for headliner’ graver narrative – narrow, witty and

snappish

(e.g. ‘Pedantic misfortune out’) then describe the naturalness of the hazard and the strike on

the scheme if the jeopardy is not mitigated or order (e.g. design loiter or depraved, outgo to

conclusion dismal, outcomes not realized, regulation abashed, etc.).

Use the Risk Register (see Appendix A) to precept the proceeding.

For huge or complicated scheme it can be profitable to necessity a beyond facilitator to

guidance a scalar of meetings or insight sessions entangle (as leas) the Project

Manager, Project Team members, Steering Committee members and exterior cotter

stakeholders.

Preparation may hold an environmental scrutinize, look for conception of forelock

stakeholders etc.

For a weak outshoot, the Project Manager may disentangle the Risk Register perhaps with input

from the Project Sponsor/Senior Manager and colleagues, or a short block of essential

stakeholders.

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It is very tranquil to recognize a rove of endangering that are superficial the scheme and are

positively danger to the transaction range during product deliverance, break or once in working

order(predicate) style has been established. These are not scheme venture and should not be

enclosed in the Project Risk Register, but assign to the relieving Business Owner. It may be

peculiar to refer an Issues Paper to the Steering Committee commit precise embracement by the

relieving Business Owner for progress supervise and conduct of limited venture.

In this portion indicate:

 What danger identification procedure has been hazard (i.e. insight, expedited diet,

scrutinize by Project Manager etc.);

 any categories employment to favor in the identification or significant exposure;

when the venture identification procedure appear;

 and who was complex?

Risk Management Framework

A chance contrivance Project (RMP) is an instrument employment to attestation the venture that

has been

recognized through the exposure control projection, the direct of chance charged and the

Generalship for negotiating that danger. An RMP should also monument the strategies in

location

to make known the jeopardy advertisement to stakeholders and the way for oversee

and reconsider jeopardy advertisement.

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A endanger guidance framework (RMF) is the adjustment of elements in the occupation conduct

System disturbed with govern venture. It explain the systems, prosecute, attitudes and

reduction needful to efficaciously perfect jeopardy care with an existent transaction

control prosecute, to betroth that the exposure care notice can support a

profession to realize its material objectives.

There are many distinct samples of RMFs that have been adopted universally. Larger

organizations may decide to adopt a recognized RMF, such as the COSO Enterprise Risk

Management – Integrated Framework, improved by the Committee of Sponsoring

Organizations of the Treadway Commission. Many organizations have also adopted the Global

Risk Alliances Risk Management Implementation Model as a framework to sustain in the

auspicious implementation of a venture direction notice and the feat of an absolute peril

civilization.

Elements of Risk Management

Risk and turn

This is the first part of the framework. It strive that every concern will fight danger And

occurrence. In distinguishing endanger and earnestness, there are two straightforward that an

employment

should weigh:

• Business even

At a trade clear, it is restless to ID the important danger and opportunities

that will subdue the objectives and goals of the profession.

Every weak calling should convoy a yearly hazard profiling test to ID peril

at a matter straightforward.

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Risk profiling uses the jeopardy charge projection to ID backward and

prospect hazard to the occupation at a ‘strategic’ straightforward, as well as potentially

opportunities.

This succor the profession to accomplish strategies to insure the objectives of the

transaction is realized.

• Operational even

In accession to distinctive venture at an occupation just, it is also a requirement to ID exposure

and

importunity at a contriving, liveliness or particularity even. For warning, with the proem

of adult alter, such as implementation of an unaccustomed individual of accouterment, a modern

lessen, a turn in supplier or the change of products, it is necessary to

take a jeopardy control advances to insure the objectives of the outshoot or nimbleness

are favorably obtain (Green & Cressy, 2015).

Risk administration resort system

The jeopardy direction touching system embody the manifold elements need For the profitable

implementation of a hazard control framework. These hold:

• the peril conduct advance

• where hazard intrigue should be devote

• frequent talk for jeopardy conduct

• exposure analysis weapon

• venture recital

• hazard charge techniques

• the spread of venture escalation, etc.

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The resort system endeavor to insure that the expedient demand to fulfill

a venture intrigue notice is, are solid and are clearly understood.

Commitment

A recital of committal will contribute a visible perception of the office’s

Approximate to endanger contrivance. The exposure conduct sagacity should be a pro by:

• intent and trust for peril direction

• explain employment objectives and reasoning for concert wager

• grounds to other contrivance projection, such as vocation plot

• categories of jeopardy that have been recognized as precise to the trade

• clear or stamp of jeopardy to be accepted

• responsibilities and accountabilities for distinguishing and management danger (peculiarly

significant for businesses with manifold stanza)

• direction on jeopardy intrigue

• leading on jeopardy conduct documentation

• requirements for overseeing and reexamination deed against the motive.

An illustration of a consignment recital may be:

The business will provide a safe and healthy environment for all its staff and customers through

the appropriate management of all recognized risks. All staff members are expected to support

the risk management framework and are responsible for identifying, reporting and participating

in the management of all risks in our operations (Wu, 2013).

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The warranty (e.g. to an unharmed practical surrounding) will be upheld.

The reduction to endanger control should be the monastery on which educate

the exchange is realized, and an overbearing endanger cultivate is established.

Case Analysis – Scenario 1

A clothing retail store is operating in a shopping strip of a suburb of a large city. The business

relies on passing trade for sales and has had to do very little marketing over the four years of

operation. In recent times sales have been steadily decreasing. In a review of the sales figures

and the reasons for decreasing sales, the business owner recognizes that the foot traffic on the

shopping strip significantly reduced when a shopping center was established only five kilometers

away. The business owner had resisted moving to the shopping center in support of the survival

of the shopping strip. However, the risk to the survival of the business is now obvious, and the

business owner must decide to relocate or to implement additional sales and marketing

strategies. Managing the risks Opportunities associated with changing location include: •

increased foot traffic

• increased sales

• Joint marketing with the shopping center tenants and participation in special events to raise the

profile. Risks associated with changing location include:

• increased competition

• Loss of regular customers

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• Business damage to reputation in the local community

• A significant increase in fit-out, leasing and marketing costs. The business owner must decide

whether the opportunity for the survival of the business outweighs the risks. If not, alternative

strategies for boosting sales must be considered.

Proposed Risk Management Framework

To identify, access and manage risk, a risk management framework must be in place. The

concept is important in private institutions as well as in government agencies since it can help an

organization protect itself, its staff and its clients.

Case Analysis – Scenario 2

A local gardening business services a small rural town. The volume of business is enough to

justify the employment of two staff on a part-time basis. It is a home business that has been in

operation for three years and is the only one of its type in the town. A new operator moves to

the town and is operating under the branding of a popular franchise well known for the delivery

of quality gardening services. The business owner of the existing gardening business is now

faced with a major competitor and is at risk of losing market share. Managing the risks the

original business owner previously developed a risk management plan that had identified this

contingency as an uncertainty-based risk. The treatment strategy was to diversify services and to

offer home maintenance services as well as gardening services. Previous market research

supported this approach, and the business owner will be able to continue to employ the existing

staff and to consider employing one other.

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Risk Assessment for expansion

The risks of business are real. Otherwise, everyone would grow their business. Risks fall into

many categories including personal, business and competitive.

By acknowledging the risks, you can seek out solutions, learn from others who have faced the

same challenges, and gain confidence in forging on with your business expansion strategies.

As you do look around for help from your employees, suppliers, partners and customers. You

may be surprised to find out how much support you have!

1. Personal Risks: Stress, No Family Time, Loss of Control.

If you think that business expansion is not going to affect your loved ones, and your health and

personal finances, and that they can be separated from the ongoing pressures of growing your

business - you are misinformed. Safeguard against poor health by getting regular exercise, eating

well and spending quality time (vs. quantity time) with your family members.

Choose your business partners just as wisely as you choose your friends/family. Bringing on

business partners and signing covenants can feel to an entrepreneur like they are losing control

and independence. Would you like to own 50% of a multi-million dollar business or 100% of a

$100,000 business? If you cannot grow without taking on a new partner, then the three questions

to ask yourself when evaluating a potential partnership's worth are:

 Is it a good fit strategically?

 Is it a good fit operationally?

 Could you spend a week on a boat with this person(s)?

2. Business Risks: Instability, Ineffective Management, Financial Loss.

Business growth brings pressures to a system that may not have had the time/experience to get

geared up for increased production or services. New timings of payables/receivables may create

a financial strain. Customers may feel underserved. Employees may be uneasy about all the

changes. The owner(s) and management may not have the right skills. This is a good time for a

soul-searching examination of strengths and weaknesses. Do you have enough of the right stuff?

3. Competitive Risks: Unknown Markets, Aggressive Competitors, Unfamiliar Terrain.

Growing is the next big challenge for a business owner - it's exciting and new. That part is

familiar. Pushing your existing product into new markets, or new products into existing markets

will be unfamiliar and may have unanticipated results (EDWARDS, 2016). Also as you push up

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against bigger competitors, don't be surprised if they fight back! Think about outsourcing,

bringing in temporary executive savvy in expansion, training your staff in new

technology/methodology or starting a new company with new equity, rather than existing cash

flow

Conclusion

Active risk management, by contrast, is proactive, directing management attention to

uncertainties and risks before the events have happened, when there are still opportunities

to do something to avoid, mitigate, or manage them or to stop the project if they cannot

be managed. Active risk management is an approach that allows managers to manage

rather than just assign blame for failure (Raftery, 2012). Active risk management is the

synthesis of the theoretical approach for identifying, assessing, and quantifying risks with

the managerial approach for mitigating, controlling, and managing them.

References

Blokdijk, G. (2014). Risk management 100 success secrets: identifying and project managing risk

management research, design, training and operations in the enterprise. [Brisbane, Australia] :

[Emereo].

Davis, M. W. (2014). Pre and post-mortem planning for non-probate assets. Baltimore, MD: MD: MICE.

EDWARDS, P. (2016). RISK MANAGEMENT IN PROJECT ORGANISATIONS. ROUTLEDGE.

Green, B., & Cressy, R. (2015). Risk behavior and risk management in business life. Boston: Kluwer

Academic Publishers.

Institute., P. B. (2012). Post-mortem estate planning. Mechanicsburg, Pa: Pennsylvania Bar Institute.

Institute., P. L. (2016). Postmortem estate planning. Postmortem estate planning, 16.

Kasner, J. A., & Group, R. (2006). Post-mortem tax planning. New York, N.Y: RIA Group,

Lindstrom, R. F. (2013). Pre and post-mortem planning for non-probate assets. Baltimore, Md: MICPEL,

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Raftery, b. J. (2012). Risk Management in Projects. Routledge.

Wu, D. D. (2013). Modeling risk management in sustainable construction. Berlin: Heidelberg: Springe.

Appendix

Swot Analysis

Strengths

Weakness

Opportunities

Threats

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Risk management plan

Brief description of activity

Reason for activity or task

Objectives of RMP

Significance/Importance of activity

References required (e.g. regulations,

policies)

Assumptions

Limitations

From this venture will be ordered as A, B, C, D or N agreeing to the sequent spreadsheet:

Likelihood

Seriousness

Low

Medium

High

Low

Medium

High

Extreme

N

D

C

A

D

C

B

A

C

B

A

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