Introduction to Risk Management
Risk assessment procedure regards to the process of assessing the likelihood of different risk contributing factors and measuring its possible impact on business operations. It helps manager to prioritize their risk which can bring extreme level of negative impact towards regular functioning. The present project report highlights the risk assessment procedure and its analysis for CoffeeVille. It will be done by preparing risk matrix and accordingly necessary decisions will be taken to combat possible threats and solid action plan.
Risk Analysis report, action plan and risk treatment
Companies just not only need to identify factors for arising risk but also need to analyze its likelihood or occurrence so as to identify their consequences on business operations. With the help of effective analysis, managers can take superior decisions and necessary actions to combat risk and meet targets. Effective ways to treat risk in the best possible manner helps to minimize hurdles and ensure successful operations (Poolsappasit, Dewri and Ray, 2012). With references to CoffeeVille, its managers, directors and executives are responsible to evaluate factors responsible for business risk and undertake several actions and decisions to treat risk in the best possible manner. There are various steps involved in risk assessment procedure such as setting objectives, identifying possible impact of risk on CoffeeVille’s business performance, setting key prioritizing and taking actions to overcome such risk contributing factors. Moreover, at the end, management must examine that what step they took did really worked or not to minimize risk and accomplish targets. This step proves beneficial for CoffeeVille’s executives to identify required modifications in the risk control planning and process so as to overcome barriers and ensure successful operations.
Assessing likelihood of the risk occurring
Risk assessment is the process of analyzing the possibility of risk occurrences to assess its likelihood and thereby taking appropriate actions to overcome this. In corporate world, companies are facing different kind of risk due to number of internal as well as external variables that are uncontrollable. Adverse or unfavorable changes in the market forces give rises to corporate risk, however, positive changes helps to conduct operation successfully (Teller, Kock and Gemünden, 2014). There are ranges of techniques available to the CoffeeVille for risk assessment such as brainstorming, inspective and audit, flowchart, dependency analysis, FMEA approach, SWOT and PESTLE analysis as well. With reference to CoffeeVille, there are number of risk contributing factors exists in the market such as banking risk, travelling risk, risk due to non-compliance and threat of negative corporate image or brand reputation. At the inaugural step, CoffeeVille requires to assess likelihood of risk occurrence so as to identify the reasons or factors that can arises risk to the business and affect operations adversely (Glendon, Clarke, and McKenna, 2016). Internal reports, expert’s opinion, competitors’ analysis, historical company records and so on are several tools available to assess likelihood or occurrence of risk.
Risk likelihood descriptors
|Rating||Description||Likelihood of occurrence|
|1||Almost certain||Risk that incur frequently or very often|
|2||Likely||Strong possibility that event may occur or may cause loss to the CoffeeVille|
|3||Possible||Risk contributing event may incur based on casual occurrences in historical period.|
|4||Not likely||Events that generally do not incur but there is very little possibility of risk occurrences.|
|5||Rare||Extremely unlikely but due to certain circumstances or uncertain situation, event might be happen probably.|
Risk consequences or likelihood analysis
|Risk||Rating||Descriptors||Reasons for risk occurrence|
|Banking risk||4||Not Likely||CoffeeVille’s cash handling authority is given to a responsible or experienced person who carries out their work accountability in the best manner. Proper cash management, documentation, keeping money in safe and lockers and regular monitoring helps to minimize business risk due to cash theft and stolen activities.|
|Manager’s travel risk||3||Possible||Physical injuries can be caused to manager while travelling at various destinations for the business purpose like marketing and advertisement and others (Bromiley and et.al., 2015).|
|By-law compliance risk||5||Rare||CoffeeVille follow all the legislations and regulatory framework like taxation policies, environmental principles, minimum wages, equal opportunity law, debt covenants and many others. Moreover, it is not involved in illegal and restrictive business practices which might impact return adversely.|
|Loss of brand recognition||1||Almost certain||Many-times, staff do not wear proper uniforms or do not carry out functions accordingly to the set operational processes and activities, which in turn, may results in loss of brand recognition risk.|
Assess consequences of risk occurrence
After identifying business risk, manager has to forecast its potential consequences on business operations and activities so as to judge its future impact (Rampini, Sufi and Viswanathan, 2014). Consequences of risk can be measured in different aspects such as financial, reputational, legal, and operational and many others. With reference to CoffeeVilley, consequences of identified risk contributing elements or factors are identified here as under:
Risk can be prioritized on the basis of risk metrix level, taking into consideration above risk metrix, it can be seen that by-law compliance risk identified extreme level of risk henceforth, it must be prioritized. However, risk for banking risk exists at moderate level so second priority will be given to it. Thereafter, manager’s travelling risk and risk of other likelihood events exists at low level henceforth, considered less preferable over others. While, on the other hand, loss of brand recognition is moderate henceforth, regular monitoring is considered sufficient to minimize the occurrence of such events (Cole and et.al., 2013). After pre-settlement of key priorities, it must be reviewed again within three or six month duration so as to make necessary changes in the priorities to minimize the risk possibility.
Explanation of the risk assessment procedure
At the initial step, I identified all the risk contributing factors by generating required information from different sources. Thereafter, its potential consequences whether minor, major, catastrophic, high and extreme has been identified. On the basis of likelihood and potential consequences, risk matrix has been developed (Market timing, investment and risk management, 2016). Factors that identified extreme level of risk has given priority, however, all the other elements that are considered less risky has given less priority. After it plan has been revised according to the revised notes from the meeting so as to minimize risk and meet business targets.
After making risk management action plan, it must be implemented effectively so as to reduce business and carry out operations successfully. With reference to CoffeeVille, if company is facing brand recognizing issues, then this risk can be eliminated by conducting training sessions and developing uniform policy and other employment requirement by which employees are adhere. This policy will assist business to maximize the consequences of decreased brand recognition and results in less risk and improved performance. Moreover, manager will monitor and review the progress of the risk mitigation strategy on a constant basis helps to take necessary actions and initiatives to minimize the risk occurrence. This in turn, company can carry out operations successfully without any hazard.
Report on CoffeeVille. CCTC arrangements, controller committee, safety programme, audit and special training events will be definitely assist CoffeeVille to curtail the risk contributing factors, which in turn, company can easily meet their target and ensure long-run sustainability.
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- Glendon, A.I., Clarke, S. and McKenna, E., 2016. Human safety and risk management. Crc Press.
- Poolsappasit, N., Dewri, R. and Ray, I., 2012. Dynamic security risk management using Bayesian attack graphs. IEEE Transactions on Dependable and Secure Computing. 9(1). pp. 61-74.