Short answer questions:

1.Consider any organization (that you are familiar with) and prepare internal and external stakeholders' list who could help you directly or indirectly in Risk Management process. Why stakeholder consultation is so important in risk management?

2.Before conducting a risk assessment for an organization, why is it important to review the existing arrangements and find out strengths and weaknesses of internal mechanisms? Give reasons.

3.Imagine you are a manager of an organization. How would you measure the success of your risk management strategy? (Hint: Identify goals, critical success factors, outcomes and document them)

4.How do the managers communicate the risk management processes to relevant parties?

The Sinclair Agro is an internationally operated Agro-Chemical firm based in regional Victoria, Australia. The company manufactures and markets pesticides & allied agricultural products all over Australia and abroad. It has a total of 6 offices located in different Australian cities having employee strength of over 200. The company has achieved significant growth during the last couple of years in domestic and international market. Its agro-chemical products enjoy a reasonable market share in Europe and America. The company now eyes on growing Asian market and has plan to set up business unit there.

However, the company is bit skeptical about its future business scope and opportunity. In a recent annual meeting, David McLean, the Sinclair's General Manager (Operations) expressed his concern for the future of Sinclair's business and the approach that the Sinclair needs to follow. He mentioned some issues like currency fluctuations, rising cost of raw materials, cheaper substitutes from China,high competition (due to imported products) and environmental hazards which may cause problem to its profit line and continued existence. David pointed out that future of farming is complex and uncertain. There are a range of issues which could be affecting the future of crop production i.e. climate change, shortage of water and farm land expansion. Moreover, there is increasing propaganda against the use of agrochemicals and support for organic farming by some interest groups.

Now, Sinclair management is planning to undertake a risk management procedure to guard against unforeseen events. They are setting up a risk management committee which may take the responsibility of risk identification, assessment and control. Consider you are an external party who will assist in Sinclair's Risk Management procedure. On account of that you need to answer the following questions. You are free to make realistic assumptions.

1.Who are the relevant parties the risk committee of Sinclair Agro should engage or consult with to identify risks and what procedures they might adopt to do successfully, explain with the help of the following table;

Risk area Who/Type of specialist What they can offer

2.List the various methods you would use to research risks and also explain why you have chosen them.

3.Complete the given template. You are free to make realistic assumptions where required.

Research area Findings

Foreign exchange market e.gAfter appropriately researching from Bank's data and market statistics, it is found that the Australian dollar will remain high i.e. between 97 and 102 US cents.

Imported products

New trends in agro-business

Environmental or climatic conditions

Social or market changes

Any other relevant issues (if any)

4.Assess the likelihood and subsequent impact of the risks as identified (based on your findings and research) using a table format as advised by your trainer. Estimating the magnitude of the risks can be very demanding task. You may consult Sinclair issues with your friend, colleague, fellow class-mate and your teacher to reach a better outcome.

Risk Likelihood Impact /consequences of the risk

5.Develop and document a sample Risk register for Sinclair using the template as follows: (Please use the risk matrix table given in appendix to evaluate the priority of various risks)

Risk description Priority after primarily evaluating risk parameters (rank using the number) A possible mitigating action for every risk (what could be done to reduce the gravity of risk)

Likelyhood Consequences Insignificant Minor Moderate Major Catastrophic Risk is easily Delays up to 10% Delays up to 30% Delays up to 50% Project mitigated by of Schedule of Schedule of Schedule abandoned normal day to day |Additional cost up Additional cost up Additional cost process to 10% of Budget to 30% of Budget up to 50% of Budget Certain >90% chance High High Extreme Extreme Extreme Likely 50% - 90% chance Moderate High High Extreme Extreme Moderate 10% - 50% chance Low Moderate High Extreme Extreme Unlikely 3% - 10% chance Low Low Moderate High Extreme Rare