Risk Analysis and Management Plan †Free samples for Students

Question: Discuss About the Risk Analysis and Management Plan? Answer: Introducation The risks facing the Store has been identified as banking risk, compliance risk, and Mangers risk. The next step is to classify them in the probability/ likelihood of their occurrence. According to the probability of occurrence, risks are classified as; Rare risks Unlikely risks Possible risks Likely risks And, frequent risks Our case can be classified as shown below; Banking Risk- This is considered as possible risks because the $4000 was kept in the cash register every day without being banked. Thieves can break into the Caf and steal the money (CMC, et al., 2003, p. 45). Travel Risk- This is an unlikely risk. Although the manager will be driving in a steep and narrow road used by trucks as well, it is difficult for an accident to occur during the day. Note that the manager travels during the day. Compliance By-Law Risk- Manger and employees cannot be fined for using more water than estimated or breaching the existing by-laws. Therefore, this is an unlikely risk (Rejda McNamara, 2013, p. 67). Consequences Failing to control/ solve these risks, would lead to inconveniences besides grave danger to the Company. Consequences are classified as Insignificant, Minor, Major, and Catastrophic (Kamiya, et al., 2007, p. 109). The risks facing the Company can be classified as shown below (based on their merits). Banking Risk- Not banking the money every day, is likely to attract thieves to the Store. If theft occurs, the lives of the employees would be endangered. Therefore, this is a major risk if not addressed. Travel Risk- There is a probability for an accident to occur when the manager is traveling to attend the meeting. The possibility of the accident occurring is high when navigating the steep and narrow road. The can would insure the manager in the occurrence of an accident (Coleman, 2011, p. 78). Likewise, the Company will have to find another personnel plays the role of a manager which would slow its operations. Therefore, the risk arising from traveling is a major one. Compliance By-Law Risk- According to the current water compliance by-laws, the company can pay a fine of up to $500,000 if it does not use water effectively Likewise, the company will suffer a loss which is a drawback to its profitability. This is a minor risk (Crouhy, et al., 2014, p. 93). Priorities Priorities are used to rate the risks by creating a risk matrix. To create a risk matrix, likelihood is multiplied with the consequences. Based on our situation, the risks are prioritized as; Extreme for banking risk Leaving a total of $4000 days sales at the Cafs safe should be treated as an extreme risk. This creates a possibility for theft as well as endangering the lives of the employees. High for managers travel risk The traveling risk for the manager is considered to be a high risk. If an accident occurs, the company will spend money to insure the manager as well as temporary filling the position of the manager with another person leading to extra expenditure (Rejda McNamara, 2013, p. 93). And, medium for failing to comply with water usage by-laws. Using water efficiently is crucial. If the company fails to comply with the current by-laws, it might attract a fine of $50,000. Therefore, this is a medium risk. Management Options The next step is to come up with effective management options to mitigate the risks. The risk management plan for the Company comprises of the risk under consideration, rating, control, stakeholders responsibilities and roles, timeline, and monitoring (Newton, 2013, p. 145). Risk Risk Assess Controls Monitoring Timeline Role Player Banking Risk Extreme The Company should one a bank account and deposit the $4000 every day. Obtaining a weekly statement from the bank. Between 2 to 3 weeks Financial manager. Travel Risk High The meetings attended by the manager should end by 3pm. This would allow him time to travel back and avoid travelling at late hours Check the time the manager finishes the meetings and try to adjust the time he finishes his shift before attending the meeting. Between 1 to 2 weeks New policy CEO. Compliance with bylaws Medium The employees need to be educated on current bylaws and the importance of compliance. Check the monthly bill on water usage. 2 weeks Store Manager Goldsmith Partners. Efficient water usage Medium The Company should educate its employees about the procedures and policies governing its operations. Specific attention should be put on right water usage. Supervising the employees while performing their work. Check the monthly water bills Between 1 to 2 weeks CEO Store Manager. References List CMC, CPCM Conrow, P. E., 2003. Effective Risk Managemen. New Jersey: AIAA; 2nd edition. Coleman, T. S., 2011. A Practical Guide to Risk Management. New York: Research Foundation of CFA Institute. Crouhy, M., Galai, D. Mark, R., 2014. he Essentials of Risk Management. New York: McGraw-Hill Education. Kamiya, S., Shi, P., Schmit, J. Rosenberg, M., 2007. Risk Management Terms. University of Wisconsin-Madison: Actuarial Science, Risk Management and Insurance Department. Newton, P., 2013. Managing Project Risk. New Jersey: Bookboon.com. Rejda, G. E. McNamara, M., 2013. Principles of Risk Management and Insurance. Paris: Pearson Series.