BSBPMG522- UNDERTAKE PROJECT WORK- 3 assessments

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Simulated Business

Max Lionel Realty

Table of Contents

Chapter 1 – Business plan (excerpt) ...........................................................................1

Chapter 2 – Organisational chart and management profiles ....................................2

Chapter 3 – Management responsibilities ..................................................................3

Chapter 4 – Budget summary ......................................................................................4

Chapter 5 – Operational plan ......................................................................................5

Chapter 6 – Operational risk register ..........................................................................7

Chapter 7 – Work Health and Safety (WHS) Policy .....................................................8

Chapter 8 – Anti-discrimination policy...................................................................... 10

Chapter 9 – Procurement policy and procedures .................................................... 11

Chapter 10 – Max Lionel Realty current tenants list ............................................... 16

Chapter 11 – List of pre-approved suppliers ........................................................... 17

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

Page 1 of 17

Chapter 1 – Business plan (excerpt)

From Max Lionel Realty business plan FY 2013/14

About Max Lionel Realty

Max Lionel Realty was founded in 2008 by property developer Max Lionel. The

company currently employs approximately 100 people, 80 of whom are licensed real

estate agents.

Through its client agents, the organisation manages property sales and rentals (both

residential and commercial) on behalf of a range of clients. The organisation also

separately engages in investment activities, such as property and land development.

Max Lionel Realty has been a member of the Real Estate Institute of Victoria (REIV)

since 2008 and proudly follows the REIV Code of Conduct.

Mission:

● to achieve the highest returns for our clients and to deliver a client experience

that is second to none in the industry.

Vision:

● to establish, within five years, the MLR brand — the highest ethical standards

with best-in-breed performance for clients.

Values:

● integrity

● client-focus

● active encouragement of excellence, innovation and continuous improvement

● teamwork

● recognition of the diversity and expertise of MLR employees and agents.

Strategic directions:

The strategic context in which Max Lionel Realty will achieve its mission and vision is

through:

● engaging with customers and clients

● building goodwill and reputation for integrity

● supporting innovative thinking, management and leadership skills.

● creating a high-performing, highly profitable organisation.

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

Page 2 of 17

Chapter 2 – Organisational chart and management profiles

Max Lionel Realty organisational chart

Board of Directors and CEO

Max Lionel

Chief Financial Officer

Riz Mehra

Operations General Manager

Kim Sweeney

Human Resources Manager

Les Goodale

Manager Residential Realty

(Sales and Rentals)

Sam Lee

Manager Commercial Realty (Sales and Rentals)

Pat Mifsud

Manager Investments

Peter Mitchell

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

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Chapter 3 – Management responsibilities

Max Lionel, CEO

Max is responsible for working with the Board of Directors to oversee the business, set

overall strategic directions, manage risk, and authorise large financial transactions.

Riz Mehra, Chief Financial Officer

Riz is responsible for preparing quarterly financial statements and overall budgeting. Riz

Is also responsible for overseeing budgets for cost centres and individual projects. At the

completion of financial quarters and at the end of projects, Riz is responsible for viewing

budget variation reports and incorporating information into financial statements and

financial projections.

Kim Sweeney, Operations General Manager

Kim is responsible for the day-to-day running of the company. Kim oversees the

coordination, as well as the structural separation, of the Residential, Commercial, and

Investments centres. Kim is responsible for sponsoring projects which affect operations

of the organisation as a whole. Kim works with the Human Resources Manager to

coordinate systems and projects in order to achieve company-wide synergy.

Les Goodale, Human Resources Manager

Les is responsible for the productive capacity and welfare of people at MLR. With the

Operations General Manager, Kim works to coordinate projects and management

systems such as performance management, recruitment, and induction. Kim will need to

ensure aspects of the recently launched WHS management system, such as risk

assessment, management, consulting, reporting and continuous improvement, are

coordinated with all subsequent activities.

Sam Lee, Manager Residential Realty

Sam is responsible for the management of all aspects of residential realty. Sam manages

the activities of residential agents.

Pat Misfud, Manager Commercial Realty

Pat is responsible for the management of all aspects commercial realty. Pat manages the

activities of commercial agents.

Peter Mitchell, Manager Investments

Peter is responsible for the management of all aspects investment realty. Peter manages

the activities of investment agents. Peter works with the Operations General Manager to

ensure separation of investment from obligations to residential and commercial clients.

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

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Chapter 4 – Budget summary

Max Lionel Realty 2013–2014 budget by activities to be undertaken

Income:

Commissions, fees from

clients

$2,566,000 Commissions and agents’ fees for the period.

Investment income $1,567,000 Real estate investment income.

COGS $150,413 Cost of provision of services.

Total Income $3,982,587 Gross profit.

Expenses:

Wages, salaries and on

costs

$1,567,890 Wages, salaries, superannuation, work cover

insurance, payroll tax.

Consultancy fees $50,000 Project management: WHS management

system; AD awareness program.

Communication expenses $42,000 Telephone, ISP costs, IT support.

Staff travel, transport and

accommodation.

$55,500 Cost of staff travel and associated costs for

sales, etc.

Premises expenses $250,000 Rent, electricity, maintenance, cleaning.

Capital expenditure $120,000 Purchase of new office equipment (90%),

vehicles; purchase of properties, land.

Depreciation and

amortisation

$177,569 Computers and capital equipment that is

depreciated.

Office supplies $65,068 Printing and stationery, postage, amenities.

Professional fees

(consultants, legal and

audit), insurances, taxes and

charges, subscriptions and

memberships.

$62,187 Audit fees, external accounting costs, bank

charges, insurance except workers

compensation.

Total Expenses $2,390,214

Surplus $1,592,373 Net income before tax.

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

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Chapter 5 – Operational plan

Max Lionel Realty operational plan (summary) FY 2013 - 2014

Objectives: Performance measures Tasks:

1 Engage with

customers/build

ethical profile:

● raise

organisational

profile by 20%

● improve client

satisfaction

performance by

25%.

● Percentage of brand recognition

in sought-after categories in

periodic customer surveys.

● Percentage of customers with

positive view of organisational

responsiveness, innovation,

quality.

● Number of client/tenant

complaints.

● Project to raise awareness of anti-discrimination, WHS and other

legislation/codes of conduct among agents, clients, tenants.

● Conduct of quarterly surveys: clients and tenants.

● Training needs analysis and training of agents.

● Ensure agents disclose potential conflict of interest to clients,

tenants.

● Development of ethical charter, including principles all agents must

follow.

2 Increase revenues by

20% within the third

quarter.

● Total income.

● Agent income.

● Investment income.

● Investigate resourcing needs: number of agents; personnel; office

equipment, cars, etc.

● Fulfil resourcing needs in accordance with policies and procedures.

3 Reduce direct and

indirect costs of

operations by 10%.

● General ledger accounts;

financial statements:

○ wages

○ cost of agent services

○ consultancy fees

○ wastage and associated

expenses.

● Renegotiate with suppliers.

● Research potential new suppliers.

● Management engagement with employees to achieve greater

employee support of organisational goals.

● Include explanation of how activities work with organisational

strategic goals in all communications to internal personnel.

● Greater use by managers of budgets to encourage restraint.

● Greater focus on budget restraint in management of projects.

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

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Max Lionel Realty operational plan (summary) FY 2013 - 2014

Objectives: Performance measures Tasks:

4 Engage workers with

strategic goals of

business and

support professional

development in line

with strategic goals.

(Targets to be set by

individual managers.)

● Percentage completion of

performance plans and

performance management

process.

● Numbers of coaching sessions

completed.

● Numbers of operational – related

training programs completed.

● Management engagement with employees to achieve greater buy in

of organisational goals.

● Include explanation of how activities work with organisational

strategic goals in all communications to internal personnel.

● Regular coaching.

● Training needs analysis and training.

● Strategic goals included in induction program for estate agents.

● Employee incentives for performance in all areas relevant to

operational and strategic goals.

5 Improve health of

employees (range of

specific areas).

● Numbers of injuries (Target = 0).

● Numbers of absentees

(Target = <3% of total hours).

● Training need analysis and training on WHS and implementation of

recently launched MLR WHS management system.

● Research incentives for: safe work achievement and healthy

lifestyle.

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Chapter 6 – Operational risk register

Max Lionel Realty risk register FY 2012/2013

Identified risk Probability Impact Current controls Future actions

Failure to recruit qualified real estate

agents due to increased competition.

Medium High ● All office equipment regularly

reviewed and updated as required;

IT security monitored and

maintained.

● Appropriate insurances held and

coverage reviewed annually.

● Managers encouraged and

incentivised to follow performance

management policy.

● Employee performance plans align

with business plan and six-monthly

review process in place.

● Project to raise awareness of anti-

discrimination, WHS and other

legislation/codes of conduct

among agents, clients, tenants

● Appropriate HR policies and

procedures in place.

● WHS management system in

place.

● Industry benchmarking

in all areas of

organisational

performance

● Conduct periodic reviews

of agent performance to

ensure professional

conduct

● Staff trained in use of

technology as needed.

● Keep abreast of changes

in potential liabilities.

● Review and develop HR

related policies where

required.

● Development of ethical

charter, including

principles all agents

must follow

Failure to realise revenue gains due to

recent slump in real estate prices.

High High

Inadequate insurance cover. Low High

Non-compliance on anti-discrimination. Medium High

Perception of discriminatory practice

reducing client and tenant base.

Medium High

Poor organisational culture; low level of

staff engagement and morale.

Medium Medium

Loss of knowledge and capability

through departing staff.

Low High

Failure to meet occupational health and

safety requirements.

Low High

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

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Chapter 7 – Work Health and Safety (WHS) Policy

Max Lionel Realty WHS policy

Max Lionel Realty recognises its responsibility to provide a healthy and safe working

environment for employees, contractors, clients and visitors. Max Lionel Realty is

committed to the continued wellbeing of its employees and to ensuring that all employees

are safe from injury and health risks whilst undertaking work-related duties, including

home-based work.

Purpose The purpose of this policy is to ensure the acquisition of resources

is carried out consistently, fairly and transparently and in

accordance with organisational requirements.

In order to ensure a healthy and safe working environment, Max

Lionel Realty will (in accordance with the WHS management

system):

● undertake risk assessments and implement procedures to

adequately manage any risks in the working environment

● provide written procedures and instructions for safe working

practices

● ensure compliance with all relevant legislation

● maintain safe systems of work including the work premises

and environment

● provide appropriate support, instruction, training and

supervision to employees to ensure safe working practices.

Scope The scope of this policy covers employees and contractors of Max

Lionel Realty (MLR).

Resources Specific procedures for the implementation of this policy are

available below and on the company intranet.

Responsibility Max Lionel Realty management and employees are ultimately

responsible for ensuring that safe systems of work are established,

implemented and maintained.

Management is responsible for:

● the effective implementation and regular review of WHS

procedures

● consultation with employees regarding health and safety

issues and changes to legislation and/or working practices

which may affect the health, safety or welfare of employee

● providing and maintaining a safe system of working practices

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● providing support, training, and supervision to employees to

ensure safe and healthy workplace practices are carried out,

including relevant first aid training where appropriate

● the provision of adequate resources for employees to meet

the WHS commitment, including an up-to-date first aid kit.

Individual employees are responsible for:

● following all WHS policies and procedures

● ensuring they report all potential and actual risks to partners

or managers/supervisors

● taking care to protect their own health and safety and that of

their colleagues at work

● ensuring their own or others health and safety is not

adversely affected by the consumption of drugs or alcohol

● encouraging others to follow healthy and safe working

practices in the workplace.

Policy

Implementation

and Review

This policy has been established and implemented through the

human resource functions of the organisation and will be reviewed

regularly in consultation with MLR management and employees to

ensure compliance with legislation, industry standards and

organisational changes.

Relevant

legislation, etc.

● Privacy Act 1988 (Cwlth)

● Estate Agents Act 1980 (Vic)

● Equal Opportunity Act 2010 (Vic)

● Occupational Health and Safety Act 2004

● Dangerous Goods Act 1985 (Vic)

● AS/NZS 4804:2001 Occupational health and safety

management systems – General guidelines on principles,

systems and supporting techniques

Updated/

authorised

10/2013 – Riz Mehra, CFO

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

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Chapter 8 – Anti-discrimination policy

Max Lionel Realty Anti-discrimination Policy

Purpose The purpose of this policy is to ensure transactions with clients,

tenants and other employees is handled fairly and transparently

and in accordance with organisational and legal requirements.

Generally it is unlawful to discriminate on the basis of the

following 16 characteristics:

● sex

● relationship status

● pregnancy

● parental status

● breastfeeding

● age

● race

● impairment

● religious belief or

religious activity

● political belief or activity

● trade union activity

● lawful sexual activity

● gender identity

● sexuality

● family responsibilities

● association with, or

relation to, a person

identified on the basis of

the above.

Scope The scope of this policy covers all employees and contractors of

Max Lionel Realty (MLR).

Resources Specific procedures for the implementation of this policy are

available below and on the company intranet.

Responsibility Responsibility for the implementation of this policy rests with all

employees, contractors and management of Max Lionel Realty.

Relevant

legislation, etc.

● Privacy Act 1988 (Cwlth)

● Equal Opportunity Act 2010 (Vic)

● Age Discrimination Act 2004 (Cwlth)

● Disability Discrimination Act 1992 (Cwlth)

● Racial Discrimination Act 1975 (Cwlth)

● Sex Discrimination Act 1984 (Cwlth)

● Estate Agents Act 1980 (Vic)

Updated/

authorised

10/2013 – Riz Mehra, CFO

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

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Chapter 9 – Procurement policy and procedures

Max Lionel Realty procurement policy

Purpose The purpose of this policy is to ensure the acquisition of

resources is carried out consistently, fairly and transparently

and in accordance with organisational requirements.

Scope The scope of this policy covers the purchasing and acquisition of

resources by employees and contractors of Max Lionel Realty

(MLR).

Resources Specific procedures for the implementation of this policy are

available below and on the company intranet.

Responsibility Responsibility for the implementation of this policy rests with

employees and management of Max Lionel Realty with

responsibility for purchasing resources.

Relevant

legislation etc.

● Privacy Act 1988 (Cwlth)

● Estate Agents Act 1980 (Vic)

● Equal Opportunity Act 2010 (Vic)

● Corporations Act 2001 (Cwlth)

● A New Tax System (Goods and Services Tax) Act 1999

(Cwlth)

● Income Tax Assessment Act 1997 (Cwlth)

● Fair Work Act 2009 (Cwlth)

● Occupational Health and Safety Act 2004 (Vic)

Updated/

authorised

10/2013 – Riz Mehra, CFO

BSBPMG522 Undertake project work Max Lionel Realty (simulated business)

Page 12 of 17

14 Principles governing the Max Lionel Realty procurement process

1. Probity and ethical behaviour

The principle of probity and ethical behaviour governs the conduct of all procurement

activities. Employees who have authority to procure goods and services must comply with

the standards of integrity, probity, professional conduct and ethical behaviour. Employees

or directors must not seek to benefit from supplier practices that may be dishonest or

unethical.

2. Value for money

Value for money is the core principle underpinning procurement. Contracted

organisations must be cost effective and efficient in the use of resources whilst upholding

the highest standards of probity and integrity. In general, a competitive process carried

out in an open, objective and transparent manner can achieve the best value for money

in procurement.

3. Non-discrimination

This procurement policy is non-discriminatory. All potential contracted suppliers should

have the same opportunities to compete for business and must be treated equitably

based on their suitability for the intended purpose.

4. Risk management

Risk management involves the systematic identification, analysis, treatment and, where

possible, the implementation of appropriate risk-mitigation strategies. It is integral to

efficiency and effectiveness to proactively identify, evaluate, and manage risks arising out

of procurement related activities. The risks associated with procurement activity must be

managed in accordance with the organisation’s risk management policy.

5. Responsible financial management

The principle of responsible financial management must be applied to all procurement

activities. Factors that must be considered include:

● the availability of funds within an existing approved budget

● staff approving the expenditure of funds strictly within their delegations

● measures to contain costs of the procurement without compromising any

procurement principles.

6. Procurement planning

In order to achieve value for money, each procurement process must be well planned and

conducted in accordance with the principles contained in this document and comply with

all of the organisation’s policies and relevant legal and regulatory requirements.

When planning appropriate procurement processes consideration should be given to

adopting an approach that:

● encourages competition

● ensures that rules do not operate to limit competition by discriminating against

particular suppliers

● recognises any industry regulation and licensing requirements

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Page 13 of 17

● secures and maintains contractual and related documentation for the procurement

which best protects the organisation

● complies with the organisation’s delegations policy.

7. Buy Australian Made/support for Australian industry

Employees who are involved in procurement activities must make a conscious effort to

maximise opportunities for Australian manufacturers and suppliers to provide products

where there is practicable and economic value. In making a value for money judgement

between locally-made and overseas-sourced goods, employees are to take into account:

● whole-of-life costs associated with the good or service

● that the initial purchase price may not be a reliable indicator of value

● the quality of locally made products

● the record of performance and delivery of local suppliers

● the flexibility, convenience and capacity of local suppliers for follow on orders

● the scope for improvements to the goods and ‘add-ons’ from local industry.

8. Pre-registered list of preferred suppliers

Max Lionel Realty shall maintain a pre-registered list of preferred suppliers, following a

request for expressions of interest and an evaluation of the submissions. Suppliers can

request to be evaluated for inclusion on the existing pre-register list at any time.

All purchases under $5,000 may be made from preferred suppliers without undertaking a

competitive process. Purchases above $5,000 where a preferred supplier exists should

include a competitive process if practicable.

This list is reviewed at regular intervals with admission of interested parties on a rolling

basis. Care should be taken to ensure that such lists are used in an open and

non-discriminatory manner. Max Lionel Realty encourages new contractors to provide

information on their experience, expertise, capabilities, pricing, fees, and current

availability. It is in the interest of the organisation that the pool of potential suppliers is

actively maintained and updated. Employees should be encouraged to provide reports of

their experiences in working with each contractor/consultant to assist future decisions

concerning commissioning suitable contractors and consultants.

9. Avoid conflict of interest

Employees and directors are required to be free of interests or relationships in all aspects

of the procurement process. Employees and directors are not permitted to personally gain

from any aspect of a procurement process.

Employees and directors shall ensure that to the best of their knowledge, information and

belief, that at the date of engaging a contractor no conflict of interest exists or is likely to

arise in the performance of the contractor’s obligations under their contract.

Should employees or directors become aware of potential conflicts of interest during the

contract period, they must advise the CEO and the Board of Directors immediately.

Prior to any situation arising with potential for a conflict of interest, complete disclosure

shall be made to the CEO and the Board of Directors to allow sufficient time for a review.

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10. Report collusive tendering

Employees should be aware of anti-competitive practices such as collusive tendering. Any

evidence of suspected collusion in tendering should be brought to the attention of the

CEO and the Board of Directors.

11. Competitive process

It is a basic principle of procurement that a competitive process should be used unless

there are justifiable circumstances. For purchases under $5,000, the list of preferred

suppliers may be used. The type of competitive process can vary depending on the size

and characteristics of the contract to be awarded.

12. Direct invitation (selective or restricted tendering)

A process of direct sourcing to tender may be used. This may involve:

● an invitation to organisations deemed appropriately qualified for a particular

product or service (this may be appropriate for specialised requirements in markets

where there is a limited number of suppliers or service providers)

● an invitation to tender to organisations on MLR’s pre-registered list of preferred

suppliers if applicable.

13. Evaluation and contract award

For projects being awarded, consideration will be given not only to the most economically

advantageous tender, but also to the track record of the tender respondent and the

degree of confidence that the panel has in the quality if the bid. It will be the normal

practice to have the evaluation of tenders carried out by a team with the requisite

competency.

14. Results of tendering process

All tender respondents should be informed in writing of the result of a tendering process

immediately after a contract has been awarded.

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Summary of procurement policy delegations

Authority Purchase amount Required number

of quotes

Comment

CEO and one

Director

Authority to sign

contracts for

products and

services over

$75,000.

Two or more

competitive quotes

for contracts over

$75,000.

Detailed services

contract required.

CEO Authority to sign

contracts for

products and

services up to

$75,000.

Two or more

competitive quotes.

Detailed services

contract required for

contracts over

$20,000.

General Managers

Delegated

authority only

through CEO

Authority to sign

contracts for

products and

services under

$30,000.

One or more

competitive quotes

preferred.

Provided they are

within the approved

budget and

consistent with

business/operational

and strategic

planning.

Managers Authority to sign

contracts for

products and

services under

$10,000.

One or more

competitive quotes

preferred.

Follow MLR

purchasing

procedures.

Agents Authority to sign

contracts for

products and

services under

$5,000.

Must use preferred

suppliers list.

Follow MLR

purchasing

procedures.

Contractors and

external

consultants

No authority. One or more

competitive quotes

preferred.

Must use preferred

suppliers list.

Contractors and

external consultants

must follow MLR

purchasing

procedures and must

seek approval for

purchases from

person holding

relevant authority.

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Chapter 10 – Max Lionel Realty current tenants list

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Chapter 11 – List of pre-approved suppliers

Max Lionel Realty

List of preferred suppliers and contractors

● Ace Consultants: Project managers, IT technicians, technical writers, marketers,

subject matter experts for short or long term human resourcing needs.

● Innovative Travel: Business travel bookings

● Melbourne Car World: Fleet sales and service

● Ready Office Supplies: Computers, photocopiers, etc.

● Coffeeville: Business function catering

○ Catering menu: <http://simulations.ibsa.org.au/coffeeville/menu.php>.