Write a paper of no more than 1,750 words following the outline of a risk management plan. Refer to the Risk Management Plan Outline as an example of what the outline must look like. The word count includes tables.
Incorporate all individual and team assessments completed in previous weeks of this course and modified to reflect instructor feedback.
Include a synopsis determining measures to mitigate project risks and these elements:
• A minimum of two real-world risk management plans related to your project
• The viability of the plans
• A comparison of your proposed risk management plan with real world standards
Format your paper consistent with APA guidelines.
Some of the measures of mitigating risks include coming up with the right team, effectively communicating the risks, spreading the risk among the right parties and coming up with a good risk register to act as a guide. The real-life risk management plans include the call accounting, risk assessment plan and the passport security protocol. Employees and employers should directly take part in the risk management process. They all participate in identifying potential risks and come up with the appropriate solutions. The passport security protocol is a method whereby the logged in employees get details regarding a company’s progress using online accounts. The two plans can effectively take place for a long time due to the integration of technology. The proposed risk management is comparable to real life standards. With real life standards, all employees are included in managing risk. Nowadays, companies are consulting external consultants to help in coming up with final solutions regarding risks. In the proposed plan, external consultants are also given opportunities to help Whole Foods in mitigating risks.
Whole Food organization is aiming at expanding its operations by entering the Mexican market. The company has already established the most convenient places in Mexico to set up stores. The locations are convenient for distribution purposes. Distribution and stocking risks require mitigation measures. Some risks are allowable while others are not allowed due to the adverse effects they could bring. The avoidance or mitigation of risks, explains the need for a risk management plan. The plan should provide guidelines on how companies such as Whole Food can avoid risks while at the same time accomplish the set goals and objectives of the firm.
Whole Food is aimed at growing its market by creating a branch in Mexico. The company is coming up with ways through which its activities will be diversified to work well in the Mexican territory. Trained experts on business issues have conducted researches regarding the company’s expected performance in Mexico. If utilized well, the market can see the growth of Whole Food to another desirable level. Considering that Whole Food has already established the best locations for its stores, the remaining part is stocking the stores.
Beginning operation in another country is likely to take a while. A minimum of 6 months is required to fully equip the established stores. Whole Foods produces a large percentage of perishable goods. The 6 months will work in favor of perishable products. A total of 12 months (1 year) is necessary to know if the company should continue with its operations in Mexico or not.
During the first phase of establishing itself in Mexico, the company will have to transport some products from the US to Mexico before Whole Foods starts manufacturing products in Mexico. Whole Foods will incur huge costs associated with transportation. Due to perishable goods, some of the products might get spoilt on the way.
Risk management strategy and process
Application of resources
The costs required in acquiring the resources should not exceed the available revenue as might lead to losses. The costs should be as minimum as possible and easily applicable in Mexico to speed up the operation process. Additionally, the resources should be free from risks.
Areas in which risk is accepted
Risks are expected in the total sales of Whole Foods during the first year of operation in Mexico. The risks are accepted because, during the first year of operations, not many Mexicans will be familiar with the company and their products in the region. Also, the company is not likely to run out of stock. In fact, most of the first stock put in the company is likely to expire due to the low sales expected at first. Risks will also be accepted and expected when choosing the right personnel from Mexico to work in Whole Foods. Such risks are as a result of little knowledge regarding Mexicans and their behavior.
The risk identification process should incorporate all employees. Assigning risk identification to individual employees can lead to misunderstandings, which in turn lead to poor results. All employees need to be first trained by experts on how to deal with risks after identifying them. After being equipped with the required skills, it will be easy for them to identify the risks accurately. However, an external consultant will be required in the organization to oversee the whole risk identification process. In the case of Whole Foods, the process will aim at identifying the best conservation measures to be put in place in order to avoid products from expiring.
The actual assessment of the risk should be conducted by the external expert. The first thing to do is to identify the risk itself. The risk is then assessed to determine whether psychological or physical risk. Some risks may cause physical danger to the employees in the company. The employees likely to be affected by the risk are identified. The external consultant will assist in identifying the ways of mitigating these risks. After doing that, the consultant will document all the findings and discuss them with Whole Food management.
Priorities will be given to the risks that are likely to cause huge dangers or losses. The degree to which the risks affect the company needs to be established for prioritization purposes.
The management, in this case, should be such that the most accurate techniques are implemented to do away with the risk. Individual decision making should be avoided at all means since it can easily lead to errors. The management of the company together with the employees should work as a team to establish the best steps to implement in dealing with the risk.
Reporting and communicating
Effective communication skills are necessary. Effective and efficient channels of communication should be set within the firm. Utilizing social media for information transmission is essential. In communicating the risks and solutions, data and information should be accurate.
The company deals with organic food products and is among the largest dealers in groceries globally. Established in 1980, the company has opened up more than 400 stores, with some of them found in the United Kingdom. The need for growth and profit maximization has forced the management of the company to establish ways through which Whole Foods will further expand its operations to other nations; hence, the entry into the Mexican market (Fung, et al. 2016).
Risk analysis is whereby the identified risks are reviewed for accuracy purposes. All the issues that might arise from the risk are identified after which they are addressed appropriately by the right personnel.
In qualitative risk analysis, it is important to note that the risk can be either affect-based or source-based. Qualitative risk analysis allows the establishment of the probability of a risk occurring. The probability is ranked between the scales of 0 to 1. Risks are then ranked from the highest probability of occurrence to the lowest probability. The risks with the highest probability of occurrence are prioritized (Taylor et al., 2015).
With semi-quantitative risk analysis, realistic figures are established regarding the outcomes of the risk. Numerical data are necessary for establishing the overall outcome of any identified risk within the company (Pan et al., 2017).
Assessment of risks
An assessment will be done according to the figures provided in both the qualitative and semi-quantitative risk analysis. Collecting data related to other food companies in Mexico are also important to carry out comparisons.
Risk mitigation planning
Setting enough budget for risk mitigation is critical for success. The budget should be lined with the available funds. The resources and solutions will then be implemented accordingly with the help of the hired external consultant.
Risk response planning
Whole Foods should always be prepared to respond to risks, even if they appear as emergencies. All resources required in dealing with risks should be available in advance. This will help in reducing the total time taken to mitigate the risk.
Explanation of risk register
A risk register is a table that is used in risk management whereby all the identified qualities or attributes of an established risk are filled. The methods to be used to mitigate the risk are also recorded in the risk register.
Presentation of a risk register
An example of an effective risk register to be incorporated in Whole Foods is as shown below: (Kim, et al. 2015).
|Commercial||The expiry of perishable goods||0.8||5||Using the best preservative measures.||High|
|Commercial||Failure to receive enough customers 1 year after establishment||0.6||7||Using the right marketing strategies such as the incorporation of social media.||Low|
|Commercial||High transportation costs exceeding revenue.||0.3||5||Using the most cost effective transportation means.||Medium|
|People||Loosing employees in Mexico due to low wages and high risks,||0.65||7||Paying and compensating employees effectively.||High|
|Technical||Delayed payments due to poor communication tools.||0.4||5||Ensuring that the best communication equipment are put in place.||High|
Escobar-López, S. Y., Espinoza-Ortega, A., Vizcarra-Bordi, I., & Thomé-Ortiz, H. (2017). The consumer of food products in organic markets of central Mexico. British Food Journal, 119(3), 558-574.
Kim, T. H., Yoon, J. H., Jeong, W. C., Kim, D. H., Ryu, J. N., & Jeon, H. J. (2015). Establishment of capacity analysis method and risk register for local safety management. Development Research Phase Report. Sejong: Korea Environment Institute.
Pan, L., Sachpekidis, C., Hillengass, J., Haberkorn, U., & Dimitrakopoulou-Strauss, A. (2017). Quantitative and semi-quantitative analysis of 18F-NaF PET/CT cannot differentiate malignant vs benign degenerative lesions in multiple myeloma. Journal of Nuclear Medicine, 58(supplement 1), 1094-1094.
Taylor, S. J., Bogdan, R., & DeVault, M. (2015). Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.