MANAGE RISK CANDIDATE RESOURCE WITH SIMULATED ONLINE BUSINESS ASSESSMENT BSBRSK501A

Transcription

1 MANAGE RISK CANDIDATE RESOURCE WITH SIMULATED ONLINE BUSINESS ASSESSMENT BSBRSK501A

2 Precision Group (Australia) Pty Ltd 9 Koppen Tce, Cairns, QLD, info@precisiongroup.com.au Website: BSBRSK501A Manage Risk ISBN: Copyright Notice No part of this book may be reproduced in any form or by any means, electronic or mechanical, including photocopying or recording, or by an information retrieval system without written permission from Precision Group (Australia) Pty Ltd. Legal action may be taken against any person who infringes their copyright through unauthorised copying. These terms are subject to the conditions prescribed under the Australian Copyright Act Copying for Educational Purposes The Australian Copyright Act 1968 allows 10% of this book to be copied by any educational institute for educational purposes, provided that the institute (or the body that administers it) has given a remuneration notice to the Copyright Agency Limited (CAL) under the Act. For more information, info@copyright. com.au or visit for other contact details. Disclaimer Precision Group has made a great effort to ensure that this material is free from error or omissions. However, you should conduct your own enquiries and seek professional advice before relying on any fact, statement or matter contained in this book. Precision Group (Australia) Pty Ltd is not responsible for any injury, loss or damage as a result of material included or omitted from this material. Information in this course material is current at the time of publication.

3 Table of Contents 2 Legend 3 Qualification Pathways 4 Qualification Rules 5 Introduction 7 BSBRSK501A/01 Establish Risk Context Key Points Review organisational processes, procedures and requirements for undertaking risk management Determine scope for risk management process Identify internal and external stakeholders and their issues Review political, economic, social, legal, technological and policy context Review strengths and weaknesses of existing arrangements Document critical success factors, goals or objectives for area included in scope Obtain support for risk management activities Communicate with relevant parties about the risk management process and invite participation 13 True or False Quiz 15 BSBRSK501A/02 Identify Risks Key Points Invite relevant parties to assist in the identification of risks Research risks that may apply to scope Use tools and techniques to generate a list of risks that apply to the scope, in consultation with relevant parties 21 True or False Quiz 23 BSBRSK501A/03 Analyse Risks Key Points Assess likelihood of risks occurring Assess impact or consequence if risks occur Evaluate and prioritise risks for treatment 33 True or False Quiz 35 BSBRSK501A/04 Select and Implement Treatments Key Points Determine and select most appropriate options for treating risks Develop an action plan for implementing risk treatment Communicate risk management processes to relevant parties Ensure all documentation is in order and appropriately stored Implement and monitor action plan Evaluate risk management process 45 True or False Quiz 46 Summary 47 Bibliography 49 Assessment Pack 1

4 Use considered risk taking in your grey area...and others will follow you! Legend This symbol indicates the beginning of new content. The bold title matches the content of the competency and they will help you to find the section to reference for your assessment activities. Activity: Whenever you see this symbol, there is an activity to carry out which has been designed to help reinforce the learning about the topic and take some action. This symbol is used at the end of a section to indicate the summary key points of the previous section. This symbol is used to indicate an answer to the Candidate s questions or notes to assist the Facilitator. 2

5 Qualification Pathways There are always two choices. Two paths to take. One is easy. And its only reward is that it s easy. Source Unknown This unit of competency is provided to meet the requirements of BSB07 Business Services Training Package although it can be used in a range of different qualifications. The BSB07 Business Services Training Package does not state how a qualification is to be achieved. Rather, Registered Training Organisations are required to use the qualification rules to ensure the needs of the learner and business customer are met. This is to be achieved through the development of effective learning programs delivered in an order that meets the stated needs of nominated Candidates and business customers. 3

6 Qualification Rules You re either part of the solution or part of the problem. Eldridge Cleaver Qualification requirements include core and elective units. The unit mix is determined by specific unit of competency requirements which are stated in the qualification description. Registered Training Organisations then work with learners and business customers to select elective units relevant to the work outcome, local industry requirements and the qualification level. All vocational education qualifications must lead to a work outcome. BSB07 Business Services Training Package qualifications allow for Registered Training Organisations (RTOs) to vary programs to meet: Specific needs of a business or group of businesses. Skill needs of a locality or a particular industry application of business skills. Maximum employability of a group of students or an individual. When packaging a qualification elective units are to be selected from an equivalent level qualification unless otherwise stated. 4

7 Introduction Whether as an individual, or as part of a group, real progress depends on entering whole-heartedly into the process and being motivated to make you a more deeply satisfied human being. Source Unknown This unit of competency is about being able to identify risk in your workplace and then establish a plan to enable you to evaluate that risk. It will help you with the skills you need to demonstrate competency for the unit BSBRSK501A Manage Risk. This is one of the units that make up the Diplomas in Business. This manual is broken up into four distinct sections. They are: 1. Establish risk context: We will begin by developing a scope statement that outlines the scope of risk within the organisation. 2. Identify risks: First we will examine how to identify risks in your business. Unless you know exactly what risks you are facing, it is impossible to establish ways of overcoming them. 3. Analyse risks: Once you have identified the risks you face in your business, you need to look at just how they will impact your business. In this section we will also examine the process of analysing and evaluating the risks you face. 4. Select and implement treatments: In this section we will examine how you set up a plan to treat any risks that you identify in your business. This involves developing plans to overcome or minimise the risks in your business and the process of ensuring that your treatment plan for the risks is effective and will allow you to manage these risks successfully. You will be asked to complete an assessment pack for this unit of competency. The information contained in this resource will assist you to complete this task. On conclusion of this unit of competency you will have demonstrated your ability to identify risks, analyse and evaluate risks, treat risks and monitor and review the effectiveness of treatment of risks. 5

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9 PART 1: Establish Risk Context Key Points Section 1 The organisational processes, procedures and requirements must be reviewed before undertaking risk management. To commence the scope for risk management, process must be clearly documented. The issues of internal and external stakeholders must be included. The development of a risk management plan must include reviews of political, economic, social, legal, technological issues and policies. Always review the strengths and weaknesses of existing arrangements. Critical success factors, goals or objectives for the area must be clearly documented in the scope. Support for the risk management activities from stakeholders and the team must be obtained. Communication with relevant parties about the risk management process is essential and their participation necessary. 7

10 Part 1: Establish Risk Context A risk is defined as a situation, problem or activity that would have an impact on the progress of a program, sub-program or project if it were to actually happen. Risk is a natural part of all businesses, and in order for you to manage it effectively it is important that you have a management program in place. Why Take Risks As we previously mentioned, a certain amount of risk taking is inevitable if you are to achieve your objectives. Effective management of risk will help with the management of innovation and improve performance by contributing to: Increased certainty and fewer surprises. Better service delivery. More effective management of change. More efficient use of resources. Better management at all levels through improved decision making. Reduced waste and fraud, and better value for money. A risk management plan is a plan aimed at attempting to build a picture of the types of events which could occur, unexpectedly, within your organisation. These events will often occur at the worst possible time, so you need to be sure that you have contingency plans in place for any such event and that your staff are aware of what they need to do when each of these events actually occurs. These surprise events could be anything from a robbery, to a natural disaster to your suppliers being forced to shut down. When you are working to manage risk within your organisation, you work through four (4) steps. These steps are: 1. Identify risks that are present. 2. Measure the impact of these risks. 3. Develop a series of steps or strategies that you can use to manage the risk that is present. 4. Monitor these strategies to ensure that they are working. When you are beginning the process of developing your risk management plan, you should start by reading through and analysing your business plan. Your business plan should bring together an analysis of the organisation as a whole and the environment within which it is operating. Try to think of your organisation from an outsider s point of view. What impacts could you foresee affecting your business? What could cause it to fail? What has been omitted from your business plan? Spend time thinking through every possible occurrence that you consider as a major impact to your organisation. A great question to ask yourself is what if? What if an earthquake occurs, what if we are robbed? What if our biggest supplier closes down? What if the cost of our supplies double in price? You need to have in your mind answers to these questions in order to determine where the most significant risks are likely to occur. 8

11 Part 1: Establish Risk Context There are many organisations who offer risk management services to small and medium sized businesses, but often you will find that because they are not intimately familiar with your business, they may fail to pick up all possible issues that may occur with your organisation. You and your staff are in the best position to pick up everything that could potentially impact on your business, so spend time thinking through these issues yourself and see just how far you can get on your own before you consider employing any such consultant. So, you now will have a list of all the possible impacts that you can foresee in your business. This list forms the possible risks that you need to find ways to manage effectively. Take these lists of risks and look for ways to manage each of them. Remember that this may be as simple as having insurance or more complex risks may require an entire plan to be developed around them. Think of different ways that you might manage a specific risk fire, for example, may involve insurance, fire alarms, sprinkler systems or other management tools that stop fires from occurring in the first place. Whichever method you decide to use, you must be sure that it will be effective in managing the risk that is possibly going to occur. Now, you are in a position to look at what tactics need to be implemented to manage the risk. AS/NZS 4360:2004: Risk Management When considering Risk Management within your organisation, it is important to consider the standards that exist for you to measure your performance against. In the case of Risk Management, this standard is AS/NZS 4360:2004 AS/NZS 4360:2004 is a specific risk management standard that provides generic guidance on a range of possible risks for any business. There is no specific set of risks or activities that are covered by the standard, rather it was written to be as generic as possible. It could cover an individual within the organisation, a set of organisations, an industry as a whole or simply a department within your organisation. This standard is designed to provide you, the manager, with the major elements of the risk management process and thus provide you with a way in which to develop such a system. The standard itself is not designed to specify exactly what must be done. This is left to the discretion of the managers concerned. Rather the standard tries to ensure that all people working under the standard are heading in the same direction no matter what industry you are working in. The detail of the plan may vary significantly, but the actual elements of the plan and the tools that are implemented as a part of the plan will depend on the specifics of the organisation in question. 9

12 Part 1: Establish Risk Context Establishing the Context So, how can you start to build your plan? The first step it to provide yourself with some context, that is, try and look at your organisation and what it does. Once you know what the organisation actually does, you can begin to look at the risks that it faces. Some of the common forms of risk that you should spend time assessing include: Social Factors Legal Risks Technological Change Market Changes Financial Rate Changes. As you will notice, there are some of these factors that you will be able to have an impact on, while there are others which will be totally outside your control. However, you need to consider management tools for both those in your control and those outside your control. Generally, when something is outside of your control, what you need to do is find ways of minimising risk. You also need to look at the context within which your organisation exists. We mentioned this in our list above, but to expand on some of these risks further, consider: The community around you Policies in your organisation Government policy Management Structure Legislation. Now that you understand the context within which your organisation is operating, look further in to the scope to which you want the risk review to cover. Remember that it is difficult to cover everything, so you may need to define the context to be less than looking at the entire organisation or every possible risk. You may, for example, just look at risks that are not currently managed, then look at those which are managed to find improvements. Don t try to tackle too much at once. You could spend time asking yourself: How much money can we put into this review? What is our overall risk management policy in this organisation? What are we expecting to accomplish from this review? What are the areas where most risk exists? Who should be responsible for identifying risk? What criteria should we apply to each risk? What issues did we note in previous reviews? 10

13 Part 1: Establish Risk Context Take calculated risks. That is quite different from being rash. George S. Patton You should then be in the best position to actually know the possible risks that exist within your organisation and then can determine exactly what you want to do to eliminate these risks. 11

14 Part 1: Establish Risk Content 12

15 Part 1: Establish Risk Context Section 1 - True or False Quiz A risk is defined as a situation, problem or activity that would have an impact on the progress of a program, sub-program or project if it were to actually happen. Please tick True False Risk management increases certainty. Risk increases resource use efficiency. Risks should be continually monitored. Risks should not be a normal part of business if well planned. AS/NZS 4360:2004 is a standard that covers risk management. Your context statement should apply both organisationally and strategically. AS/NZS 4360:2004 only applies to the healthcare industry. Both the scope and depth of the review of risks should be considered. Risk management starts with risk analysis. 13