Essay on Riks Management

2360 Words Jun 27th, 2014 10 Pages
BFF 5902
Introduction to risk principles

Assignment 1
AS/NZS/ISO 31000:2009
HB 436:2004

Table of contents
1.0 Introduction 1
2.0 Statement of case 1
3.0 Identification and classification of risks 1
4.0 Risks analysis 2
5.0 Risks evaluation 4
Competition 4
Reputation 4
Stock turnover and financial leverage 5
Quality assurance 6
Performance of employees 6
Payment system interruption 7
Supplier and natural disaster 7
6.0 Risk register 7
7.0 Risk treatment 9
Risk treatment schedule 9
Risk treatment action plans 10
8.0 Recommendations 11
9.0 Conclusion 12
10. References 13

1.0 Introduction
According to AS/NZS ISO 31000:2009, risk management consists of 6 components which are
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3.0 Identification and classification of risks
Based on AS/NZS 4360:2004, risk identification and classification is the second significant stage because any unidentified risk will be omitted from further analysis and any misclassification would become a threat to further procedures.

Table 1—Category of risks
Category | Risks |
Strategic risk | Competition from competitorsReputation damage |
Financial risk | Stock turnoverFinancial leverage problem |
Operational risk | Quality assurancePayment system interruptionEmployee training problem |
Resource risk | Supplier and natural disaster problem |

According to the business nature of Woolworths, the major risks it face could be divided into 5 categories, namely, strategic risk, financial risk, operational risk and resource risk (Table 1). Strategic risk refers to a loss that caused by pursuing an ineffective business plan (BusinessDictionary, 2014). Therefore, the price competition from its main rival Coles and the recent reputation issue could be included in this category. Financial risk refers to the potential loss of shareholders because of company’s inadequate cash flow against its financial obligations (Investopedia, 2014). For a corporation like Woolworths, the speed of stock turnover and its financial leverage may have a direct influence to its cash flow and profitability. Operational risk could be described as a risk that arises…