risk management

Class Activity

BSBRSK501 Manage Risk

Level 1, 376 Bourke St, Melbourne VIC 3000

Name _____________________________

Student ID _____________________________

Start Date _____________________________

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page2 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

2

Learning checkpoints

Learning checkpoint 1

Part A – Questions

Access and review workplace policies and procedures from your organisation or one that you

are familiar with. Policies and procedures must include those relating to:

 risk management processes or plans

 WHS legislation

 equal employment opportunity laws

 anti-discrimination laws

 competition and consumer protection

 privacy laws.

Review each policy and procedure and answer the following questions.

Question 1

What is the significance of reviewing and analysing the existing risk management processes,

procedures and requirements before updating a risk management plan?

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page3 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

3

Question 2

Explain why it is essential to clearly identify the scope of your risk management.

Suggested response

Question 3

What specific types of documentation and sources of information should be reviewed during

the ‘establishing the risk context’ stage of the risk management process?

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page4 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

4

Question 4

Reword the following statement into a goal (or two) for your risk management process: ‘We

are conducting risk management at this time to ensure our shareholders and investors

maintain confidence that the board is comfortable with its current risk exposure’.

Suggested response

Question 5

Why is it important to gain support for risk management activities within your organisation?

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page5 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

5

Part B – Report

Document the following information as you prepare to develop a risk management plan for

your organisation, unit or area:

 An overview of the operations of the organisation

 A brief overview of the strengths and weaknesses of current arrangements

 The scope of your risk management processes

 The internal and external stakeholders, their priority ranking and their issues

 The political, economic, social, legal, technological and policy context for your risk

management strategy

 The goals and objectives for the areas in your scope

 The critical success factors for the areas in your scope

 How you will communicate with all parties

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page6 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

6

Part C – Case study

Read the case study, then answer the questions that follow.

In early 2013, Lily Hi, a clothing retail company from NSW, launched into the Queensland and

Victorian markets simultaneously. Before the launch, the company conducted a minimal risk

management process: it determined a very limited scope that included only the financial

aspects of competition. Only management was involved. Their stated goal was to ‘be

successful’.

The company struggled against competition and local government issues in Victoria, which led

to the store closing and Lily Hi withdrawing from the market in that state.

The case highlights a lack of understanding of the risk context faced in Victoria, but may have

also been a case of over-exuberance on behalf of the management – where perhaps the risks

of moving into two markets simultaneously were too great when combined.

Question 1

What mistakes did the management of Lily Hi make?

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page7 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

7

Question 2

List at least three strategies the management of Lily Hi could put in place to ensure this

doesn’t happen again.

Suggested response

Question 3

How would knowing about AS/NZS ISO 31000:2009 Risk Management – Principles and

Guidelines have helped the management at Lily Hi?

Suggested response

.

Learning checkpoint 2

Part A – Questions

Question 1

Explain why it is essential for all stakeholders to be involved in identifying risks.

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page8 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

8

Question 2

In the table below, list five research methods that may be used in determining operating risks

relevant to a small car-tyre retailer, and describe what general type of information may be

retrieved or gained from these methods. An example has been done for you.

Research methods Operating risks

Stakeholders  Speak with owners about previous difficulties to

understand potential business risks.

 Seek customer feedback about both positive

and negative experiences to understand

process requirements.

 Speak with accountants about financial risks.

Question 3

What advantages are there to using a scenario analysis to identify risks?

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page9 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

9

Part B – Case study

Read the case study, then answer the questions that follow.

Greenville Emergency Management fire service personnel have conducted a risk assessment

for fire risks at a suburban distribution centre that is adjacent to chemical plants and virgin

bushland on two sides. The process is handed to new staff as an exercise to help their learning

and understanding of the risk assessor’s roles. The staff have to research current arrangements

such as warning systems, staffing levels, the chemicals involved, expertise available to fight a

fire, and how much time there may be before a fire approaches.

The scope of the assessment is to determine health and safety risks to workers within the

distribution centre should a bushfire come through the area. They are asked to use some

analysis techniques to generate a list of risks.

Question 1

What personnel should be invited to participate in the risk identification and research process?

Suggested response

Question 2

What research methods could be applied?

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page10 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

10

Question 3

What appropriate tools and techniques could be used to ensure all possible risks have been

identified?

Suggested response

Part C – Report

In the organisation you work for or one you have access to, use a range of appropriate

personnel, research methods and analysis techniques to identify risks in the organisation or a

business area.

Present your analysis under the following headings, or use a table:

 Stakeholders: the people you will speak to and what they can offer

 Consultation methods used

 The methods used to research the risks

 Tools and techniques used to generate a final list of risks

 A final list of at least five risks, generated in consultation with relevant parties

Suggested response

Item Action

Stakeholders

Consultation methods 











 .

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page11 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

11

Research methods

Tools and techniques

A list of potential risks

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page12 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

12

Learning checkpoint 3

Part A – Questions

Question 1

What are some strategies you should use to ensure you accurately identify rankings for risks?

Suggested response

Question 2

In your own words, describe what is meant by the following terms, using examples where

appropriate:

a. Likelihood of risk

a. Qualitative analysis

b. A consequence scale

c. Frequency of exposure

Suggested responses

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page13 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

13

Question 3

Create a table assessing different risks. Include the following:

 Apply a risk rating scale to the likelihood of the listed risks occurring (A–E; extremely likely

to rare) using appropriate matrices.

 Assign a consequence or level of impact value (1–5; insignificant to catastrophic) to each of

the risks.

 Assign an overall risk priority for treatment (for example, high, medium, low).

Suggested response

Risk Likelihood

rating

Impact rating Overall priority

Product malfunction causing injury

Worker injured

Interest rate rise

Supplier receivership

Staff fraud

Part B – Case study

Read the case study, then answer the questions that follow.

In analysing risk for an upcoming model range, risk management specialists at an American car

manufacturing company were complacent about the American buyer. They knew that SUV-

type trucks and pick-ups were big sellers, as were inefficient fuel-guzzling V8 sedans and sports

cars. The likelihood of sales lost to more fuel-efficient vehicles from another company (even

though these had just been released to the market and were already making an impact) was

assessed as very low, as were the consequences of these lost sales. The company appeared to

ignore any possible financial difficulties despite the prevailing economic climate, which saw

consumers thinking twice before spending large sums of money. Consequently the company

suffered massive losses as a result of badly misjudging the mood of the US consumer and the

impact of a faltering nationwide economy.

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page14 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

14

Question 1

List at least four actions the company should have undertaken before going ahead with the

new model.

Suggested response

Learning checkpoint 4

Part A – Questions

Question 1

Why is it necessary to select and apply appropriate risk treatments to identified risks?

Suggested response

Question 2

Research what type/s of risk reduction or sharing strategies may be applied or are available if

you are looking to address the risk of litigation from the actions or inactions of you or your

staff.

Suggested responses



















BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page15 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

15

Question 3

Give three reasons why you need to ensure that any documentation associated with risk

management is accurate and stored appropriately.

Suggested responses

Question 4

List the information you would include in a risk management action plan and explain the

purpose of this information.

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page16 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

16

Question 5

Explain the role a manager plays in monitoring and evaluating their risk management action

plan and storing the information.

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page17 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

17

Question 6

In one or two sentences, describe why you need to maintain communication with stakeholders

and/or participants throughout the risk management process.

Suggested response

Question 7

Describe two contingency plans you might have in place for difficulties that might arise when

implementing a risk management plan.

Suggested responses

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page18 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

18

Part B – Case study

Read the case study, then answer the questions that follow.

The company

PolyVeya Pty Ltd is a publically listed Queensland-based plastic forming company that makes

components for the automotive industry. It is well established in Coolangatta and has just

finished upgrading to a new warehouse and forming machinery that will allow it to take on

extra capacity. It has 250 staff.

The situation

The Board of PolyVeya Pty Ltd has approached several large boat builders with the intention of

expanding into marine plastics, a relatively mature sector. The approaches are well received,

with some reservations regarding the company’s experience in the salty, high-UV marine

environment. PolyVeya is well financed (underwritten) but is carrying some debt and has

minimal cash reserves. There is a quality leadership team in place, but it has little experience

with marine plastics.

The risks

The risk management team at PolyVeya Pty Ltd conducted a risk assessment and found several

areas of risk that could affect its move into the new market. These include:

 Technology risk – although they have upgraded their plant, is it suited to marine plastics?

 Product risk – will the products from the new player be embraced by the market?

 Financial risk – with minimal reserves and some debt from the upgrades, if they are unable

to produce a competitive product quickly, they may face financial difficulties.

 Reputation risk – what effect will the move to diversify have on their brand?

 Commercial/market risk – given they are moving into a saturated market, how will they

perform?

 Management risk – does management have sufficient experience to be able to adjust

should the marine sector reject their new product?

Question 1

List five different types of risk treatment options available to the business and explain how

they may use these options to provide risk coverage for the identified risks.

Suggested response

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page19 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

19

Question 2

In the table below, list the types of risks for PolyVeya Pty Ltd and appropriate risk treatments

for each risk. Provide a brief explanation justifying your decision for one of the treatments you

have suggested for each of the risks.

Risk Treatment measures Justification

BSBRSK501 – Class Activity

BSBRSK501| Class Activity | V 1.1 | Page20 of 20 Victorian College of Education

CRICOS No. 03664B RTO No. 45316

20

Question 3

As you prepare a risk treatment action plan, what do you need to consider to ensure your plan

is effective?

Suggested response

Question 4

Prepare a draft risk treatment action plan for the CEO of PolyVeya Pty Ltd using this table.

Risk Risk level Action Resources Responsible

person

Review by Review date