Risk Management Framework For MacVille Cafes

Purpose of MacVille Risk Management Framework

The concept of risk management in any organization need to be addressed so as to mitigate risks that can result to losses as well as poor performance of workers. For the case of MacVille Risk Management Framework, it is very important to indicate the main purpose of risk management. To start with, it is very important to identify risks that can bring loses to MacVille Cafés.  Through identification of risk, the company will be in apposition to lay down strategies so as to mitigate those risks (Arnold, 2010). In that case, the process of risk identification become the initial phase of MacVille Risk Management Framework. Another concept that need to be addressed in this framework is risk evaluation. This is done by assessing the extent to which risks result to losses. I that connection, MacVille Risk Management Framework require qualified personnel to evaluate risks. It is also a core purpose of this framework to control and manage risk. It is advisable to the new outlet in Toowoomba to avoid cases that result to risks. Managing risks is the overall purpose of risk management framework. 

Another purpose of risk management framework is to identify the main threats that can affect the operations of the company. Threats in this case would include unfavorable policies, practices and procedures applied in Mac Ville. It also involves competition from other business operators. It is therefore important to ensure that potential threats are identified and managed (Kanungo & Manuel, 2014). In that connection, the purpose of risk management framework would as well include identification of opportunities. Through identification of opportunities, it is possible to fill in gaps that exist in the market for MacVille to fully exploit.

The other purpose of risk management framework is to offer education to internal and external stakeholders of the company such as staff members, directors and senior management team. They will be in a position to adjust to their duties, roles and responsibilities. It also enhance reporting of procedures with regard to management of threats and risks.

Lastly, it is the purpose of risk management framework to integrate planning policies and procedures at all levels of organization. This purpose will promote risk mitigation across all levels of the organization.

The key elements in risk management that can be applied in MacVille risk management framework include.

1. Proper risk identification.
2. Proper risk evaluation.
3. Proper risk control
4. Proper management of risks.
5. Identify and describe the scope of risk management required in your role.
6. Policy implementation. As a manager ofthe new outlet in Toowoomba, I have various obligations to satisfy. These obligations lies under my scope as a manager to mitigate risk. First, I am mandated to initiate implementation of policies and procedures to manage risks. In that connection, I am required to initiate internal control process so as to fully mitigate risks that are likely to affect outlets such as Toowoomba.
7. Risk identification and evaluation(Marylene, 2014). As a manager of the new outlet in Toowoomba, I am required by law to identify as well as to evaluate risks in areas of core value that are likely to affect MacVille Company. In that case, I am require to get assistance from directors so as to fully mitigate potential risks.
8. Identification of weak areas. There are areas where the risk management fail to address adequately. As a manager, I am required to identify those areas and offer suggestions to directors on what need to be done in those areas to as to reduce adverse effects of risks.
9. Review and update strategies applied in risk management. Based on the level of risks, strategies applied to solve the risks keep of changing due to dominancy of various risks. Thus, as a manager, I am required to undertake annual reviews so as to update these strategies.
10. Identify and describe the critical success factors, goals or objectives for areas included in the scope.

The success factors in risk management include reduction of risks, prevention of risks from occurring, controlling of risks from bring further damages and management of risks to reduce cases of low performance and losses (Maslow, 2013). From that concept, as a manager of the new outlet in Toowoomba, I have to set goals or objectives that will be initiate the process of risk management and creation of opportunities. These goals are strategic in nature.

1. To increase output of the new outlet in Toowoomba. This will be achieved if all risking factors are mitigated.
2. To promote growth, development and expansion of MacVille business. If risk are mitigated at the new outlet in Toowoomba, then the whole part of MacVille business will experience growth and development. 

Key Elements in Risk Management

1. Setting standard risk mitigation policies, practices, procedures and strategies that can be applied in all outlets of MacVille business not just in the new outlet in Toowoomba.
2. Identify relevant internal and external stakeholders, their role in the risk management process, and any issues or concerns they have raised. Complete the Table of Stakeholders Template (provided in Appendix 3 of this task) and attach to your report.

stakeholder	Internal/external	Role in process	Stake in process
1. Directors	Internal	Determining the types of risk which are acceptable and those unacceptable. Setting of policies, procedures, practices, strategies, standards and expectations of staff with respect to conduct. Initiate approval of core decisions affecting MacVille’s risk profile or exposure	Receive feedbacks from senior management team and outlet managers.
2. Senior management team/store managers.	Internal	Identification of risks. Evaluation of risks Controlling risks. Managing risks.	Oversee the progress of outlets of MacVille business.
3. Café employees	Internal	Familiarize themselves with the content of the Risk Management Policy.  clarify any aspects necessary with a senior team member   Consider any risks they feel could impact on them meeting their objectives. manage the risk if it is in their control to do so, or inform a management team member of their concerns	Offer advice to senior management.
4. Human resource manager.	Internal	Recruit risk management teams. Recruit other employees of MacVille business.	Head of recruitment department
5. External auditor.	External	Assess MacVille records so as to evaluate levels of risks.	Acts as controller and regulators of records of MacVille business.
6. Government	External	Licensing business operations. Processing policies and procedures enacted by risk management teams in MacVille Business.	Overall regulator and controller.

Complete a PEST analysis and a SWOT analysis to identify risks associated with the scenario. Outline the relevant legislation, regulations and standards (including those at a local level, i.e. Toowoomba Council).

PEST analysis

Political 1. The licensing policies for Toowoomba need to be favorable. 2. Trading policies and procedures should not be limiting.	Economic 1. The business should have favorable terms of trade. 2. The business should mitigate risks associate to unfavorable balance of payment.
Socio-cultural 1. The business should incorporate the local community in business operations. 2. It is important to recruit local community in various job positions such as Café employees.	Technological 1. Technology should be used in product innovation. 2. Technology should be applied in process innovation to mitigate risks associate to adverse legislation procedures.

SWOT analysis

Strengths 1. Ability to satisfy customers. 2. Ability to adjust to risks. 3. Ability to control and manage risks.	Weakness 1. Lack of adequate manpower in the outlets. 2. Delays for fund from MacVille as the head office.
Opportunities. 1. Able team to identify and evaluate risks. 2. Adjustments in regulations and standards so as to update strategies for risk management.	Threats 1. Competition from outsiders. 2. Inadequate resources.

Describe the methods of research that you used to complete your PEST and SWOT analysis. For example, how you approached the simulated business information; legislation, regulations, etc.; and any other information or research on risk that applies to the scope of your report.

Methods of research applicable is use of qualitative and quantitative data. Political factors can be gathered from case studies. Economic factors can be assessed through comparative paradigm.

For the case of SWOT analysis, primary data can be collected to assess mechanisms to mitigate weaknesses and threats and how to contingent strengths and opportunities.

Complete the analysis of risk for the scenario by summarizing the scenario and identifying a list of risks to the project.

In summary, it is very important to understand that risks in any business organization can be mitigated. The best way to do this is to initiate risk management frameworks so as to identify, evaluate, control and manage potential risks that are likely to affect MacVille business (McGregor, 2012).

The risks areas identifiable in MacVille business include:

1. Financial area
2. Organizational area
3. Project management
4. Governance

Email communication to stakeholders.

Email from Ash, the managers of outlet in Toowoomba From: Ash Manager of Toowoomba outlet To: stakeholders Re: input of stakeholder in management of risk in Toowoomba outlet. I write this email with an aim of initiating a program for advancing business operations in Toowoomba outlet. Thus the managing teams will undertake Identification of risks, Evaluation of risks, Controlling risks and Managing risks. The café employees will familiarize themselves with the content of the Risk Management Policy and clarify any aspects necessary with a senior team member. The individual input played by each stakeholder will be of great importance to Toowoomba outlet. I have managed to identify several risks that are likely to affect Toowoomba outlet. They include: 1. Financial risks 2. Organizational risks 3. Project management risks 4. Governance risks I hereby request any stakeholder who have managed to identify other risk to liaise with my department for further course of actions to mitigate these risks. Regards Ash Manager at Toowoomba outlet

Summary of meeting with CEO.

1. The goals that need to be achieved so as to bring success factors include:

• To increase output of the new outlet in Toowoomba.
• To promote growth, development and expansion of MacVille business.
• Setting standard risk mitigation policies, practices, procedures and strategies that can be applied in all outlets of MacVille business not just in the new outlet in Toowoomba.

1. MacVille Risk management process involves the following steps.

• Identification of risks.
• Evaluation of risks.
• Controlling risks.
• Management of risks.

1. I am planning to email all the stakeholders so as to work as a team. We will discuss issues pertaining risk management processes.
2. the CEO gave support to the team so as to manage risks.
3. I requested the CEO to as well offer a hand in mitigation of risks and he promise to support the entire process. He also managed to point out more risks such as financial and theft cases.

Part A

1. For each risk (i.e. the four identified in the scenario for this task), assess the likelihood of the risk occurring.
2. Financial risk- the risk of financial issue is very likely to occur as money change hands.
3. Organizational risk-the organizational risks is likely to occur during operations from head office to other outlets.
4. Project management risk-the probability of this risk occurring is also high due to conflict of interests in the projects under consideration.
5. Governance risk- this risk will occur during delegation of duties. 

1. For each risk, assess the consequence of the risk occurring.

Financial area- MacVille business will losses revenue through cases such as fraud.

Organizational area- this risk will delay operation due to lack of innovation.

Project management risk- there could arise cases of insider trading.

Governance risk- meeting targets and deadline will not be possible.

Develop a risk matrix to assist in prioritizing the treatment of the identified risks, including numerical values (e.g. risk matrix in the Student Workbook).

Risk matrix                                                 

probability	Severity	Financial risk	Organization risk	Project management risk	Governance risk
Low		Low (1)	Medium (4)	Medium (7)	High (10)
Medium		Low (2)	Medium (5)	High (8)	Extreme(11)
High		Medium (3)	High (6)	High (9)	Extreme(12)

Once you have prioritized the risks, for each, outline at least two suitable options for treatment.

Financial risk

Ensure that resources are handled well.

Keep proper records of finances.

Organizational risk

Empower other workers.

Initiate innovation.

Project management risk

Work towards targets and objectives.

Monitor individual performance.

Governance risk

Empower other employees.

Cater for issues that affect workers.

Include an explanation of the process you used to identify risks and assess likelihood, consequence and priority. Also include an explanation of why the options you have suggested for treating the risks are:

The process of identifying risk was determine from recurrent operations taking place in the organization. Thus, a risk matrix assessed the probability of a risk occurring by considering severity of a particular risk.

Likely to be effective

These mitigation are likely to be effective because they promote win-win situation.

Feasible for the organisation.

They are also feasible for the organization since they do not consume a lot of resources.

Appendix 3: Risk Management Action Plan Template

Risk	Assess risk (score)	Controls	Monitoring	Action priority (1-5)	timelines	Responsible
Financial risk	Low (1) Low (2) Medium (3)	Ensure that resources are handled well. Keep proper records of finances.	Monitor records.	1	2 months	auditor
Organization risk	Medium (4) Medium (5) High (6)	Empower other workers. Initiate innovation.	Monitor performance	3	10 months	Management team
Project management risk	Medium (7) High (8) High (9)	Work towards targets and objectives. Monitor individual performance.	Monitor individual and key performance indicators	4	6 months	Project coordinator
Governance risk	High (10) Extreme(11) Extreme(12)	Empower other employees. Cater for issues that affect workers.	Monitor response for workers	2	8 months	Senior management team

Part B

The key risk management treatment to be considered will be keeping records to mitigate financial risk. This is because money comprise the main resource that propel the progress of a business. Keeping proper financial records will ensure that all events are put into consideration. In that case, money loss and misappropriation will be mitigated.

The initial risk in MacVille Business involve management of new outlet at Toowoomba. Thus, the new outlet was likely to face other risks such as financial risks, project management risk, governance risk and operational risk. Integrating all these risk, we form the initial risk. To mitigate this risk, a clear plan was suggested and needed to be implemented (Richard, 2013). This plan involved advising all stakeholders on their key inputs towards initiating the new outlet at Toowoomba. 

There has been actions suggested to be implemented to mitigate risks in MacVille business at Toowoomba. They include:

Ensure that resources are handled well.

Keep proper records of finances.

Empower other workers.

Initiate innovation.

The risk of finances are reduced significantly after proper records have been kept by MacVille management team. The diagram below demonstrate how markets A, B and C behave after these identified risks have been eliminated

Different risks have different level of likelihood of occurrence. I that connection, a risk matrix was appropriate in determining the likelihood of risks to occur.

If we evaluate risk ranking:

1. Low/Medium- if activity or risk is medium, then risk mitigation efforts should be made.
2. High- if the likelihood of a risk to occur is high, it is advised to seek further event planning support to mitigate risks.
3. Extreme- if the likelihood of a risk to occur is extreme, it is advised that you do not hold this event without consulting risk management before initiating mitigation process. 

References.

Arnold, J. (2010). Coaching Skills for Leaders in the Workplace: How to Develop, Motivate and Get the Best from Your Staff. How to Books.

Kanungo, R.N., & Manuel, M.  (2014). Work Motivation: Models for Developing Countries. Sage Publication put.

Marylene, G. (2014). The Oxford Handbook of Work Engagement, Motivation and Self-Determination Theory. OUP USA.

Maslow, A.H. (2013). A Theory of Human Motivation. Start publishing LLC.

McGregor, D. (2012). The Human Side of Enterprise. New Yolk, 21.

Richard, A. (2013). Job Satisfaction from Herzberg’s Two Factor Theory Perspective. Grin publishing.