Plan for enterprise risk management
Organisation current risk management policies, procedures, and processes
In a business environment, sustainability is affected by the forces in the market, decision science, business structure, and real financial management both in short and long term (Horine, 2012). In the quest for competitive advantage, the Hun Chinese Restaurant has opted for specialization in Chinese meals besides offering a variety of menus. The company has a risk monitoring and oversight system which tracks the market dynamics within the Birmingham market.
Also, the restaurant has a policy for tracking the market trends against the activities of its competitors. These processes have the strengths of ensuring the sustainability of the business since they operate within the business operations strategies. However, the current risk mitigation system lacks an integrated structure to absorb company goals and those that favour business in Birmingham city.
Scope for the risk management process
The scope of this risk management plan for the Hun Chinese Restaurant will revolve around examining the market trends to know where the market gap is for capitalization. Besides, the risk plan will provide the necessary information that will clearly show possibilities of success and what needs to be done to achieve this success (Horine, 2012).
By identifying the trends within the immediate environment, the restaurant will be able to set the risk management procedures and aspects right. The study will enable the Chinese restaurant to focus on the aspects that have been neglected by the other restaurants in terms of disaster preparedness and security of the business. This is because the Birmingham city is prone to fires. Vandalism may also occur, especially given the rising unemployment rates in the city.
Impacts of the following on risk management
Political environment
Given the agitation from the rising number of unemployed youths within Birmingham, a certain level of political risk is anticipated in this business environment.
Economic climate
Better economic climate translates into lower business risk in terms of sustainability. The reverse is also true, especially in the business environment of the Hun Restaurant, which is very sensitive to changing customer preferences.
Social factors
Any disruption on the social and cultural traditions may increase the probability of a risk. For instance, misuse of certain resources may lead to rejection of a business when the locals feel disrespected by the actions of the Hun Restaurant business.
Legal factor
Laws and regulations are governing the establishment and operation of a business in any market. Compliance or non-compliance to such regulations may increase or reduce the probability of the business risk.
Technological advancements
Technological advancements determine the competitiveness and sustainability of a business. In the case of the Hun Restaurant business, technology will determine its business model of serving and communication to customers.
Policy context
If the Hun Restaurant business adopts a proactive policy in its business activities, the business will be sustainable. On the other hand, the poor policy will increase the probability of failure of the business.
Critical success factors, goals or objectives
The restaurant has a comprehensive plan to make sure that members of the staff are trained in constant watch over the CCTV captions. The strategy ensures that any potential risk is noted in advance and dealt with within a reasonable time. The financial department of the company has been mandated to take into consideration all the necessary provisions when planning to ensure that all the potential risks are catered for.
Internal and external stakeholder groups
The directors hold the key to the future of the restaurant. They have a mental picture and a vision of how they want the company to become after a given period. The clients of the company should understand that the company policy is on security. This will ensure that they cooperate in terms of being checked at the door to make sure that persons with ill intent do not pose as clients or patrons. This will also ensure that they are secure during their time at the restaurant.
Members of the workforce are an integral aspect of the implementation of the risk management procedure. They are the hands that carry out the actual duty. If properly trained, they are the strengths that ensure the success of the new procedures (Heldman, 2005). The surrounding community is the leadership and stakeholders who are key figures in helping the restaurant achieve the goal. They ensure an effective risk management plan and a harmonious working relationship between the two.
Communicating with stakeholder groups
Directors
Key messages: Risk mitigation and monitoring for the sustainability of the business
Delivery strategies: Open meetings and consultative forums.
How to encourage input/participation: Preplanning of the meetings and micromanaging each stage.
Level and type of support for the risk management plan: Technical support.
Employees
Key messages: Risk mitigation and monitoring for the sustainability of the business
Delivery strategies: Open meetings and consultative forums.
How to encourage input/participation: Preplanning of the meetings and micromanaging each stage.
Level and type of support for the risk management plan: Constant group involvement.
Identify the risks
SWOT diagram, identify the risk that faces the company
(Source: self-generated)
The identified risks and background
The Birmingham city is prone to fires even though there is a functional fire department. Thus, accidental fires are a conventional risk. Due to the rising cases of unemployment, vandalism is a risk. The high unemployment rate may translate into a high rate of crime, just like in any other city in the world.
When the campaign season is approaching in the UK, there is a boom in many businesses. The politicians will need venues for rallies, especially in cities like Birmingham, despite the threats political violence risk (Hollman, 2012). In the long run, these risks may negatively affect the business activities within the Hun Chinese Restaurant.
Other tools and techniques for generating a list of risks
- Delphi technique
- Interviewing
- Root-cause analysis
- Assumption analysis
- Diagramming technique
- Expert judgment
Analysing the risks
Likelihood and impacts of the risks occurring
After identification, these risks were classified in terms of their overall impact on the project and probability of their occurrence. The basis for classification was in terms of the magnitude of impact such as (LI) low impact, (MI) medium impact, and (HI) high impact. In terms of probability of occurrence, the risks were broadly classified as (LP) low probability, (MP) medium probability and (HP) high probability of possible occurrence (Sai, 2012).
(Source: Self Generated)
The risk matrix
Evaluation and prioritisation of the risks
Select and implement treatments
Appropriate option/s for treating the top 3 risks
The main risk responses include avoidance of risk, transfer of risk, mitigation of risk, and acceptance of risk as to the underlying ways of organizing appropriate responses in project implementation. This broad-spectrum classification of risks is critical in the identification of the various risks, reviewing their impacts on the project, and offering mitigation to the risks to make the project viable and successful.
Specifically, the risks are rank in terms of their magnitude, that is, low risk, medium risk, and high risk to make the responsive strategies specific in addressing the risk concerns (Sai, 2012). For the case of the Hun Chinese Restaurant, the first three risks identified are vandalism, political violence, and fires. The appropriate actions are summarized in the table below.
Action plan for implementing those risk treatments
The plans need to be adaptable. At this point, the risk mitigations plan is ready in action. Though weekly analysis and monitoring of the progress, the plan will be able to classify the success of the risk management within the Hun Chinese Restaurant.
The action plan can be effective by following the risk procedure to check the progress. The plan will be broken to monitor one risk activity at a time (Timans, 2006). The results of each activity will be merged to identify any overlap or conflict within the action plan. The plan will run for two weeks.
Communicating the action plan
The plan will be communicated through face to face meetings and official emails. The progress will be communicated after every three days.
Documentation needed, completion, and storage
The documentation needed is training pamphlets, risk monitoring books, and storage file for each mitigation strategy proposed.
Steps in implementing the risk management action plan
The first step will be prioritising the risks. This is followed by grouping the risks in terms of materials needed for implementation. The third step will be to conduct employee awareness and participation training. The fourth step will be internalising the suggestions through open and consultative meetings with all the stakeholders (Timans, 2006).
Monitoring the action plan
The action plan will be monitored every day during the first month. Reports on its progress will be made after every two days. After completion of the complex parts, the plan will be assimilated into the restaurant’s employee training module for it to become part of the Hun Chinese Restaurant’s organisational culture.
Evaluating the process of managing the risks
The success will be measured in terms of responses from the stakeholders after every stage of implementation. Since the whole process is flexible, the evaluation will be based on the key parameters of operations management strategies such as the level of awareness, consciousness, and participation among the stakeholders (Timans, 2006).
Reference List
Heldman, K 2005, Project manager’s spotlight on risk management, Jossey-Bass, San Francisco.
Hollman, J 2012, Total cost management framework, an integrated approach to portfolio, program, and project management, Wiley and Sons, New York
Horine, G 2012, Project management absolute beginner’s guide, Que Publishing, New Jersey.
Sai G 2012, Risk management: Principles and guidelines. Web.
Timans, K 2006, Risk assessment, Wiley and Sons, New York.