Introduction
This report aims at identifying business risks which All Work No Play Pty Limited is likely to face, and the appropriate risk management practices the company can use to address the identified risks.
Risk management planning is essential in determining how to approach and resolve risks anticipated in business operations (Adams 2007). On the other hand, risk identification helps business owners tackle uncertainties (Lech 2008).
An Overview of the Company
All Work No Play Pty Limited is involved in the provision of advisory and consulting services including organizational restructuring, research and development, and product marketing support for a range of start up companies. The company offers its services both online and offline.
The company has five departments. They include the administration department, which is headed by the company’s managing director, and his assistant, the deputy MD, the sales and marketing department, the support team department, the human resource and finance department, and the research department.
The research department is the most important department because it handles the actual projects. Potential clients can send their queries through online portals or they can physically drop them at the company’s offices. The marketing team is responsible for recruiting potential clients.
Thus, it markets the company’s products through the mass media. The most common mass media thorough which the company markets its services include TV, print media, bill boards, and the internet.
Potential clients are required to submit their queries to the support team department. Upon receiving the client’s query, the support team identifies what the client wants to be done. After that, the support team provides a price quote depending on the extent of the project to be undertaken.
Thereafter, the support team calls or sends the client an email detailing the requirements for his or her project. The customer is supposed to confirm whether he or she is satisfied with the requirements. If not, the client has to explain what he or she is disputing.
After, a consensus has been reached, the company works on the client’s project. The customer has to pay a 50% down payment, before the work begins. The customer is required to pay the remaining 50% before the completed projected is delivered.
Clients can get in touch with the support team at any time to monitor the progress of their project. The company has developed a web based software whereby the client can monitor the work progress.
Potential Risks
Lack of Employee Retention Policy
Having gone through the company’s employment policies, a number of flaws have been identified. Currently, all employees are given only entertainment and travel allowances. On top of that, the company has not highlighted any plans it has with regard to salary increment, incentives, promotions, and medical cover.
When compared to its main competitors, it is evident that those competitors have better employment retention polices. For example, Hi-Tech Limited provides a medical cover to its employees. The medical allowance covers the employee’s immediate family for those employees who are married.
Thus, husbands or wives, and three children of married employees are covered in the medical scheme. Hi-Tech Limited also offers house allowances to its employees. On top of that, employees of the best performing department are given a holiday package at the end of the year.
Furthermore, best performing employees are awarded a company car. This program is necessitated by the existence of an employee appraisal department. HI-Tech Limited has an annual turn over that almost matches that of All Work No Play Pty Limited.
Having interacted with several employees from various departments, I realized that some of them are not satisfied. A few of them even quoted Hi-Tech’s customer retention policy. Thus, it the company does not improve its customer retention policy, it risks losing its reliable employees.
Cyber attack
Another potential risk is a cyber attack. The company’s chief operations rely on the internet. For example, marketing, payments, communication with clients, and the actual research process depend on the internet. Most of the clients’ projects require conducting an internet search of their competitors.
In addition, our researchers rely on the internet to design web based solutions for clients. Moreover, the company receives payment from customers mainly through online transactions. When customers register with our company, they provide their business information.
Such information includes their contacts such as phone numbers, email addressees, names, and payment details. This information is very confidential.
Recently, the company’s website was shut down for a few hours following a malware attack. The malware overpowered the anti malware software present on the company’s website. In another incident, a client’s contact information was accessed by a competitor through our website.
The client launched a complaint to the administration. Furthermore, another client tried to pay by using a fraudulent method. The website was not able to detect the fraudulent transition The finance department had recorded the payment as a genuine transaction.
The finance officer was shocked when the company’s online payment partner notified him that the payment was fraudulent. These incidences highlight the vulnerabilities present in the company’s website. This shows that the company risks losing essential information through cyber attacks.
Money Back Guarantee Policy
The company‘s money back guarantee is not clear. Under the current payment procedure, clients are supposed to pay 50% of the agreed fee prior to the start of the project. Once the project has been completed and the customer is satisfied, the customer has to pay the remaining balance before the completed project is delivered.
Records from the finance department indicate that all competed projects have been paid for without any major issues including some instances when the customer was not satisfied with the work. The records show that 95.55% of all clients with completed projects were satisfied with the company’s services.
However, two incidences occurred recently in which the customer was reluctant to pay the remaining 50% because he had decide to cancel the project. The current money back guarantee does not spell out clearly directions for refunding a customer who has cancelled his or her project.
The client threatened to taint the name of the company if he was not going to be refunded. It took the intervention of the managing director to resolve the issue.
The customer was refunded 25% because the project had been underway for a period of 3 months. Thus, conflicts between customers and the company are likely to arise due to unclear money back guarantee policy.
Technical problems
The support team often communicates with the client either through emails, live chat or phone calls. Several technical problems occurred in the past which put a strain on the relationship between the company and several clients.
The live chat service provider had technical problems, and this significantly affected the communication between customers and the support team. According to statistics from the support team, customers prefer live chat to phone calls because live chat is extremely cheap.
Six out of ten clients communicate with the support team via the live chart. Following the technical problems with the live chat service provider, the number of clients who communicated with the support team through live chat drastically fell to two out of ten.
This phenomenon had a number of effects. Customers took an extremely long time to respond to queries raised by the support team. Likewise, the support team had difficulties satisfying each customs’ needs through phone calls. The most prevalent problem observed was a language barrier.
Since a number of clients come from countries in which English is the second language, the support team had difficulties understanding their concerns over the phone. Live chat is provided by a third party company. Thus, the company is likely to face a communication crisis due to technical related problems.
Risks not identified
The identification of cyber risks beyond the company’s website was not conducted. This is because of the complexity of cyber crimes. Identification of other risks related to cyber attacks requires a collaborative effort of various stakeholders such as the government, security forces, and international laws.
In addition, risks associated with internet supported services such as email were not explored because they are provided by third parties.
Risk Management Practices
Using financial incentives to maximize attraction and retention
A study conducted by a recruitment firm, Chandler Macleod, found that salary was not particularly important to job seekers (Edmund 2003).
Attractive salary and incentives ranked sixth in a list of company attributes considered attractive to job seekers, behind other factors such as challenging and engaging work, and career development (Joydeep et al. 2008).
According to Joydeep et al. (2008), one way through which employers can resolve the debate surrounding the significance of remuneration is to survey their on staff to find out how important it is to them. The outcome of the survey is likely to be more important than those of external studies.
While there may be controversy as to just how critical financial incentives are when attracting and retaining staff, what is controversial is that some employers’ remuneration strategies are more effective than others (Kim 2005).
The views of staff regarding financial incentives can also be achieved during the organization’s performance review process. It is crucial that employees be given the opportunity during this process to discuss any concerns they may have with their salary, so that such concerns can be addressed (Robert, 2010).
Employers seeking to get the most out of their remuneration packages need to give consideration to the range of financial incentives they can offer their staff, and the attraction and retention potential of each. Joydeep et al. (2008) argues that relying on plain remuneration designs may not work.
Companies need to develop executive remunerations that will fulfil the multiple objectives of the various stakeholders in the company (Edmund 2003). In this case, All Work No Play Pty Limited should consider the following incentives: medical incentives, performance related incentives, and promotions.
A non biased panel should be put in place to evaluate employees’ performance and nominate employees who are supposed to be awarded incentives.
Find ways to Prevent Cyber attack
Carr (2011) argues that computer technology is sufficiently advanced that we should have a full set of ethics for it, not just a set of guidelines. So cyber warfare should have ethics policies with associated justifications.
The company should hire experts in counter cyber terrorism to evaluate the flaws in the company’s internet protocols. These check ups should be conducted after every six months because cyber attacks are continuously evolving.
Revise Money Back Guarantee Policy
The company should redefine its money back policy to include all the possible cases which might warrant a refund to the customer.
Address Technical Problems
The company should think of constructing its live chat support system instead of relying on third parties. Technical problems arising from services provided by third parties are beyond the company’s control.
Thus, the company needs to analyze services which they receive from third parties and gauge the likelihood of providing such services internally.
Summary
This report aimed at identifying business risks which All Work No Play Pty Limited is likely to face, and the appropriate risk management practices the company can use to address the identified risks. The company’s chief operations rely on the internet.
For example, marketing, payments, communication with clients, and the actual research process depend on the internet. Owing to the services that this company offers, a number of risks have been identified.
They include cyber attacks, lack of employee retention policy, flaws in the company’s money back guarantee policy, and technical attacks.
The recommended risk management practices include using financial incentives to maximize attraction and retention, revise money back guarantee policy, hire counter cyber terrorism experts, and address technical problems.
However, risks associated with internet supported services such as email were not explored because they are provided by third parties. In addition, the identification of cyber risks beyond the company’s website was not conducted. This is because of the complexity of cyber crimes.
References
Adams, S 2007, Risk Management Plan, California University Press, California.
Carr, J 2011, Inside Cyber Warfare: Mapping the Cyber Underworld, O’Reilly Media Inc., Gravenstein.
Edmund, C 2003, Effective Risk Management, AIAA Publishers, New York.
Joydeep, H 2008, Finders Keepers: How to Attract and Retain Great Employees, CCH Australia Limited, Van Couver.
Kim, H 2005, Project Manager’s Spotlight on Risk Management, John Wiley & Sons. Connecticut.
Lech, J 2008, Cyber Warfare and Cyber Terrorism. Idea Group Inc., Pennsylvania.
Robert, K 2010, Guidebook on Risk Analysis Tools and Management Practices to Control Transportation Project Costs, Oxford Press, New York.