(Please I need help) on BSBPMG536 Manage project risk

Case study

Appendix 1 - Native Bush Spices Australia

Native Bush Spices Australia is based in Coffs Harbour, NSW. The business was established in 2010 to cater for the demand for Australian native food products. The company has organic certification. The company manufactures and retails a range of organic, Australian native foods, including Native herbs and spices, Native herbal teas and Native fruit jams and conserves.

Currently, the business is selling its products through a number of small supermarkets and health stores throughout Australia. The company also has a basic website with four pages: Home, About Us, Products and Contact Details

The company's overall business objectives for the next three years are to increase sales and create brand awareness, develop a broader product range, and expand into overseas markets, most likely Hong Kong, Japan, and Singapore.

The company's target customers are those that enjoy gourmet foods

The age range of Australian consumers buying products is between 35 and 65.

Most consumers are health conscious, care about protecting the environment and have an average annual income of $80,000.

The company employs the following staff in its head office: CEO, Operations Manager, Marketing Manager, Customer Service Officer and two administration staff. Ten staff are employed in the factory making and distributing the products.

It has been decided that a new website is needed as part of the marketing communications strategy. The new website is a critical part of the company's expansion strategy. The company has also decided to expand their product range at the same time to meet the market demand from a broader customer base (by establishing a cooperative relationship with a competitor business)

After doing extensive vendor due diligence, the Operations Manager of Native Bush Spices Australia has selected Manager Networks to oversee the risk management of both projects (Manager Networks is an organisation that provides networking events for businesspeople across Australia. They have recently expanded their business to include professional consultancy services).

As a specialist risk consultant (employed by Manager Networks), you have been asked to manage the risk associated with the web design project and product expansion project for Native Bush Spices Australia in the role of Risk consultant. The project team consists of yourself, the CEO, Operations Manager, and the MarketingManager.

You will report to/receive instruction from the Operations Manager of Native Bush Spices Australia. He has sent you the following email to help you get started:

Dear Risk Consultant,

We look forward to working with you as you manage the risks associated with two of our (very strategic) projects. We have chosen to use a risk consultant as we would like to maximise the outcomes of these projects to achieve our organisational objectives and minimise or anticipate project risk as best, we can.

You will not be required to do the activities and tasks associated with the project; rather you are responsible for the risk management processes. As you manage the projects' risks, please adhere to Native Bush Spice Australia's policies, procedures, and protocols and act in a manner that aims to achieve our organisational goals.

I'd like you to create a risk management plan (including a risk register). The objective of the Risk Management Plan is to document risk management processes and risks of the project process to ensure comprehensive identification, analysis, and response to risk.

Information specific to Wed design project (Project 1)

Native Bush Spice Australia's Risk Management Policy and Procedures require any risk rating to use an average estimate from at least two stakeholders.

The Operations Manager and CEO provided the following estimates:

	Operations manager estimate	CEO estimate
Risk	Likelihood	Severity	Likelihood	Severity
Scope creep	4	2	2	2
Staff turnover	2	2	4	1
Underestimation of time/resource commitment	2	2	4	2
Cross-platform compatibility	1	4	3	4

Information specific to the Product Range expansion (cooperative relationship) project (Project 2)

Native Bush Spice Australia's Risk Management Policy and Procedures require any risk rating to use an average estimate from at least two stakeholders.

The Operations Manager and CEO provided the following estimates:

	Operations manager estimate	CEO estimate
Risk	Likelihood	Severity	Likelihood	Severity
Legal challenges	2	2	2	4
Income due to the cooperative relationship does not justify the tie spent on the relationship.	1	2	1	2
Loss of trade secrets to other firms	2	4	2	4
Possibly being taken advantage of by partners	1	4	3	4

Risk Management Policy and Procedures

Purpose

To provide information and guidance on Risk Management. This Policy applies to all Native Bush Spices Australia employees.

Principles

The following principles form the foundation of the Native Bush Spices Australia Risk Management Policy and Procedures:

• A commitment to implement risk managementeffectively:
  • Native Bush Spices Australia is committed to managing and minimising risk. This will be done by identifying, analysing, evaluating, and treating risk exposure that may impact Native Bush Spices Australia achieving its objectives and/or the efficiency and effectiveness of itsoperations.
  • Native Bush Spices Australia will incorporate risk management into its planning and decision-making processes. It must also be considered as a delegated line management responsibility in operational planning.
  • Native Bush Spices Australia staff must implement risk management according to relevant legislative requirements and appropriate risk managementstandards.
• A commitment to training and knowledge development in the area of riskmanagement:
  • Native Bush Spices Australia is committed to ensuring that all staff, particularly those with management, advisory and decision-making responsibilities, obtain a sound understanding of risk management principles and the requisite skills to implement risk management effectively.
• A commitment to monitor performance and review progress in riskmanagement:
  • Native Bush Spices Australia will regularly monitor and review the progress in developing an appropriate culture of risk management and the effective implementation of risk management strategies throughout the organisation as a basis for continuousimprovement.

Responsibilities

Risk must first and foremost be managed at the corporate level as part of the Native Bush Spices Australia good governance and corporate management processes. Risk management is integral to all management and decision-making functions within Native Bush Spices Australia. Identifying risk and implementing control strategies and follow-up remains a delegated line management responsibility (or consultant). All stakeholders have a significant role in the management of risk. This role may range from initially identifying and reporting risks associated with their own jobs to participating in the risk management process.

Aims and Objectives

• Native Bush Spices Australia aims to integrate risk management into the management culture of Native Bush Spices Australia and foster an environment where staff assume responsibility for managingrisks.
• To secure its commitment to implement risk management effectively, Native Bush Spices Australia aims to implement risk management across all aspects of Native Bush Spices Australia in accordance with best practiceguidelines.
• To secure its commitment to training and knowledge development in the area of risk management, Native Bush Spices Australia aims to ensure that performance in risk management is a consideration in the Native Bush Spices Australia's performance management systems and other stakeholders have access to appropriate information, training and other development opportunities in the area of riskmanagement.
• To secure its commitment to monitoring performance and reviewing progress, Native Bush Spices Australia aims to ensure that appropriate monitoring, review, and reporting processes are in place in the area of riskmanagement.

• The objectives of risk management areto:
  • provide a structured basis for strategic, tactical and operational planning across Native Bush Spices Australia, enhancing its governance and corporate management processes;
  • enable Native Bush Spices Australia to effectively discharge its statutory and legislative financial managementresponsibilities;
  • provide a practical framework for managers to assess risks inherent in the decisions they take;
  • assist and motivate decision-makers at all levels to make good and proactive management decisions that do not expose Native Bush Spices Australia to unacceptable levels of risk of unfavourable events occurring that adversely impact the attainment of organisationalgoals;
  • encourage and commit decision makers to identify sound business opportunities that will benefit Native Bush Spices Australia without exposing the company to unacceptable levels ofrisk;
  • minimise the risks of not identifying sound businessopportunities;
  • protect Native Bush Spices Australia from unacceptable costs or losses associated with its operations while safeguarding its resources: its people, finance, property and reputation;
  • assist Native Bush Spices Australia in achieving its strategic objectives;and
  • create an environment where all staff assume responsibility for riskmanagement.

Procedures Corporate

Risk management is a whole of the Organisation Process. It must first and foremost be managed at the corporate level as part of Native Bush Spices Australia's good governance and corporate management processes. This process, coordinated and facilitated by the CEO, will involve the following key steps:

• an annual risk identification exercise was undertaken by the CEO. This involves assessment of the consequence and likelihood of risk, the development and/or review of individual risk management plans for the risks identified which exceed the Native Bush Spices Australia's defined acceptablerisks;
• wherever practicable, the inclusion of a Risk Management Assessment for all business activities;
• the incorporation of risk management into strategic planning, as well as operational and resource management planningprocesses;
• ensure risk management processes are incorporated into the quality assurance and improvement systems of Native Bush SpicesAustralia;
• clearly define and document escalation procedures for riskmanagement;
• ensure consistency in the approach of responses to the same risk by different sections of Native Bush Spices Australia;and
• test established risk management procedures at appropriateintervals.

Management

Risk management is a delegated line management responsibility (or the delegated consultant). It is the responsibility of all line managers to continually monitor their areas of responsibility to ensure that risks are identified and managed. Line managers should ensure that a contribution is made to Native Bush Spices Australia risk management process, on behalf of their areas of responsibility, that identifies risks at all levels.

The sharing of documented responses to risks and knowledge of risk management principles and procedures will be fostered between line managers to ensure consistency across Native Bush Spices Australia.

On an annual basis, line managers should review all activities to ensure that any unacceptable risk exposures are identified and managed at an appropriate level. All operational sections will be required to report on risk management as part of the Native Bush Spices Australia's annual operating and resource management process.

Individual

Each employee or other stakeholder throughout Native Bush Spices Australia has a role in the risk management process and is responsible for actively participating in the risk management process as appropriate to their position within theorganisation.

New Opportunities

In addition to the risks that already exist, Native Bush Spices Australia is continually exposed to new risks, particularly from introducing new activities.

New risks should be incorporated into the initial planning and assessment processes conducted before undertaking the activity and, subsequently, into the annual risk management assessment at the appropriate level(s) of activity and management. A risk management plan must then be developed.

Risk management is a collaborative process whereby all managers and supervisors identify risks and agree on treatment options.

All Native Bush Spice Australia employees are encouraged to use innovative and progressive risk identification methods, tools, and techniques. Collaboration is key, and a variety of collaborative methods are also encouraged (such as an online group chat forum, brainstorming session, and collaborative online work document).

Principles

The principles of risk management shall be applied to all areas of risk exposure, insurable and non-insurable, and shall include, but not be limited to, the following areas:

Insurable Risks

Non-Insurable Risks

Insurable workplace health and safety risks Insurable fraud andcorruption preventionactivities Unauthorised use of resources which represent an insurablerisk Reputation and image as an insurable risk Fire prevention measures and security precautions Property loss anddamage Computersecurity Professionalnegligence Other liabilityexposures Legalliability

Non-insurable workplace health and safety risks Non-insurable fraud and corruption preventionactivities Unauthorised use of resources which represent a non-insurablerisk Reputation and image as a non-insurable risk Crisis contingency planning and disaster recovery Accounting controls that are not cost effective Loss of key staff and intellectualproperty Management system inadequacies and poor workquality Failure or disruption of a major income source orinvestment

Risk classification

Risks should be classified into one of the following categories:

• Economic risk
• Societalrisk
• Geopoliticalrisk
• Operationalrisk
• Environmentalrisk
• Technologicalrisk
• Projectrisk

Project risk categories include technical risk, scheduling risk, resource risk, scope risk or deliverable risk.

Risk assessment

The likelihood of each risk occurring must be estimated for all risks the business elects to manage. Risk likelihood must be calculated by taking the average of at least two stakeholder estimations. This must be done using the following scale:

Rare	1
Unlikely	2
Likely	3
Very likely	4

Similarly, the risk impact must be calculated by taking the average of at least two stakeholder estimations using the following scale:

Minor	1
Moderate	2
significant	3
Catastrophic	4

Risk will be prioritised using the risk matrix:

		Severity
		Minor	Moderate	Significant	Catastrophic
Likelihood	Very likely	Moderate	High	Extreme	Extreme
Likely	Low	Moderate	High	Extreme
Unlikely	Very low	Low	Moderate	High
Rare	Very low	Very low	Low	Moderate

• Extreme and high risks should receive highpriority.
• Moderate risks should receive mediumpriority.
• Low and very low risks should receive lowpriority.

Review

The CEO will regularly monitor and review the progress in developing an appropriate culture of risk management and the effective implementation of risk management strategies throughout the organisation. The line managers (or delegated consultants) will monitor and review project risk at the end of each project lifecycle and write a report with recommendations for future improvements.

Guidance

The CEO will ensure that Native Bush Spices Australia maintains a consistent approach to assessing acceptable risk through its monitoring, review, and reporting functions.

Documentation

Each stage of the risk management process shall be appropriately documented. The extent of documentation required is dependent on the nature of the risk. Documentation will be controlled and become part of an auditable quality management process. Risk registers must contain:

• risk
• potentialoutcomes
• likelihood
• impact
• calculatedrisk
• priority
• treatment.

Compliance

Each manager should provide a representation and compliance statement as a formal acknowledgement of their responsibility to comply with risk management policies and procedures.

Each employee should have included in their Position Description a responsibility for risk management, and Annual Performance Appraisals should include an appropriate assessment thereof.

Staff Development

Management shall ensure that staff have appropriate information and training opportunities available in risk management as relevant to their position and role within Native Bush Spices Australia.

Appendix 2 - Identify and analyse project risks

Describe applicable standards related to risk

The company will comply with the current legislation listed below:

WHS - The legislation that regulates the health and safety laws Australian Consumer Law - It includes a national unfair contract terms law covering standard form consumer and small business contracts.

Food Act 2003 - ensure that food for sale is both safe and suitable for human consumption. It also prohibits any misleading conduct surround food.

Food Regulation 2015 - It is an effective regulatory framework that continues to deliver long-term benefits for the NSW food industry, consumers and the community through confidence and certainty in food safety.

List the objectives related to managing risk

The objectives related to managing risk are:

• Identify and assess risk. Risk management identifies and analyses various risks associated with the business
• Reduce and eliminate harmful threats
• Support the efficient use of resources
• Improve Risk Communication within the Organization
• Reassure stakeholders- Support the Continuity of the Organization

Summarise policies and procedures relating to risk, including:

• project risk classification criteria and risk ranking system.
• risk review processes (formal and informal)
• templates

Attach proof of the policies and procedures to this section of your portfolio (highlight applicable information).

Risk management policies and procedure process:

The objectives of risk management are to:

• provide a structured basis for strategic, tactical and operational planning across Native Bush Spices Australia, enhancing its governance and corporate management processes;
• enable Native Bush Spices Australia to effectively discharge its statutory and legislative financial management responsibilities;
• provide a practical framework for managers to assess risks inherent in the decisions they take;
• assist and motivate decision-makers at all levels to make good and proactive management decisions that do not expose Native Bush Spices Australia to unacceptable levels of risk of unfavourable events occurring that adversely impact the attainment of organisational goals;
• encourage and commit decision makers to identify sound business opportunities that will benefit Native Bush Spices Australia without exposing the company to unacceptable levels of risk;
• minimise the risks of not identifying sound business opportunities;
• protect Native Bush Spices Australia from unacceptable costs or losses associated with its operations while safeguarding its resources: its people, finance, property and reputation;
• assist Native Bush Spices Australia in achieving its strategic objectives; and
• create an environment where all staff assume responsibility for risk management.

Project risk classification criteria and risk ranking system

Risk classification

• Economic risk
• Societal risk
• Geopolitical risk
• Operational risk
• Environmental risk
• Technological risk
• Project risk

Risk assessment

Rare	1
Unlikely	2
Likely	3
Very likely	4

Minor	1
Moderate	2
significant	3
Catastrophic	4

Severity Minor Moderate Significant Catastrophic Very likely Moderate High Extreme Extreme Likely Low Moderate High Extreme Likelihood Unlikely Very low Low Moderate High Rare Very low Very low Low Moderate