For the MacVille Pty Ltd simulated business scenario provided, you are required to assume the role of Brisbane store Assistant Manager, Ash, who has just been promoted to be Manager of a new store. Ash has been tasked with conducting a risk management analysis of this new venture.

There are three stages to this project: (1) review, (2) analyse and plan, and (3) monitor. This project is divided into three assessment tasks as follows:

For this assessment task, you will need to review the simulated business’s risk management processes and determine the scope and objectives, taking into account stakeholders and both internal and external environmental factors affecting the organisation. Once you have gathered this information, you are to identify risks and write a draft report to the CEO. You will meet with the CEO to discuss your report, seek support for your findings, and approval  to communicate risk management processes to relevant stakeholders for their feedback and participation.

Procedure                                                                                              

You will assume the role of Ash, Assistant Manager of the Brisbane MacVille café, who has just been promoted to Manager of the new Toowoomba store. In preparation for the new venture, Ash has been tasked with conducting a risk management analysis of this project:

1. Review the provided MacVille simulated business scenario information and documentation provided in the Appendices of this
2. Write a report for the CEO (your assessor) that addresses the following:
   2009. The effectiveness of the MacVille Risk Management Framework in supporting the principles and processes of risk management, set out in the risk management standard AS/NZS ISO 31000:2009. Outline the purpose and key elements of the standard in your
   2010. Identify and describe the scope of risk management required in your
   2011. Identify and describe the critical success factors, goals or objectives for areas included in the
   2012. Identify relevant internal and external stakeholders, their role in the risk management process, and any issues or concerns they have Complete the Table of Stakeholders Template (provided in Appendix 3 of this task) and attach to your report.
   2013. Complete a PEST analysis and a SWOT analysis to identify risks associated with the scenario. Outline the relevant legislation, regulations and standards (including those at a local level, e. Toowoomba Council).
   2014. Describe the methods of research that you used to complete your PEST and SWOT For example, how you approached the simulated business information; legislation, regulations, etc.; and any other information or research on risk that applies to the scope of your report.
   2015. Complete the analysis of risk for the scenario by summarising the scenario and identifying a list of risks to the project.

Note: Ensure your report is written in a style appropriate to your stakeholder audience, for example, using appropriate language and including appropriate illustrative material (such as checklists, diagrams or flow charts) and attachments to support your summary.

3. Submit your report as per the specifications on the next Be sure to keep a copy for your records.
4. After you have developed your report, write an email that is intended for relevant stakeholders (identified in Step 2). Your email should clearly ask stakeholders for input, include a list of risks you have identified and invite them to assist in identifying any additional
5. Send the email to the CEO (your assessor) for review and request a meeting to discuss identified risks and further risk management processes.
6. Meet with the CEO to:
   1. discuss your findings, particularly your understanding of the critical success factors and goals
   2. explain the MacVille risk management process

1. discuss how you can communicate with stakeholders about the risk management processes in this scenario and invite them to participate in discussions to further identify risks associated with the scenario
2. obtain the CEO’s support for ongoing risk management activities
3. ask the CEO for input on additional

7. In dot-point form, summarise your discussion with the This should include any recommendations they made to you.
8. Submit the required documents for assessment as per the specifications Be sure to keep a copy for your records.

Specifications                                                                                      

You must provide:

• a risk review report, including a completed table of stakeholders
• email communication to stakeholders
• summary notes from your meeting with the

Your assessor will be looking for evidence of:

• reading skills to gather, review, interpret and analyse text-based business information from a range of sources
• written and oral communication skills to organise and deliver information to effectively communicate risk management processes to a range of stakeholders
• numeracy skills to interpret mathematical data when reviewing and analysing scenario business information
• ability to work independently as well as collaboratively to make decisions about risk management
• ability to interact with others using appropriate conventions when communicating to, and consulting with, stakeholders
• ability to sequence and schedule activities and manage communication
• ability to analyse relevant information to identify scope, goals and objectives and to evaluate options
• ability to use familiar digital technology to access information, document findings and communicate them to stakeholders.

Adjustment for distance-based learners

• No variation of the task is
• A follow-up interview may be required (at the discretion of the assessor).
• Documentation can be submitted electronically or posted in the mail.

• The role-plays can be adjusted for distance The role-plays for this task can be varied to take place using Skype conferencing (or any other video conferencing tool available to both you and the assessor).

Appendix 1: MacVille Pty Ltd simulated business

Background

As part of their overall strategy in the Australian beverage market, MacVille Pty Ltd have developed a chain of cafés in the Central Business District (CBD) of Brisbane, Queensland and the CBD of Sydney, NSW. The Board of Directors has made the decision to expand their operations in Queensland with the purchase and re-branding of the existing Hurley’s Café in Toowoomba, 130 km west of Brisbane.

Ash is currently the Assistant Manager of MacVille’s flagship café in Queen Street, Brisbane, and has been given the opportunity to manage the new store in Toowoomba. Ash is also a member of the Finance, Audit and Risk Management (FARM) Committee described in the MacVille Risk Management Policy.

The CEO for MacVille’s cafés in Queensland, Paula Kinski, has assigned Ash the task of managing the risks involved with the operational aspects of this takeover. A copy of her email is provided below.

Email from CEO Paula Kinski

From: CEO – P. Kinski

To: Assistant Manager – Queen Street Re: New Toowoomba store

Congratulations on your new appointment. Prior to taking up your position as Manager of our new Toowoomba store, located in Ruthven Street, the Board of Directors has asked that the risks in this project be appropriately managed.

I want you to undertake this task as it will give you significant insight into the store’s operations, it will ensure a smooth transition for Hurley’s Café staff into the MacVille family and will encourage you to give ongoing support for our risk management initiatives.

I would like you to approach this task in three stages. After the first stage, we will meet to review your work and discuss your plans for the subsequent phases. The three stages in this risk management task will include:

2. Analyse and

Your primary risk management focus is directed to the ongoing operations of the Toowoomba café. The strategic and investment risks of this project are being managed by the Board. To this end, you are to consider any risks that could impact on human resources management, financial operations, WHS, our supply chain and the local governance and overall compliance issues.

MacVille has agreed to employ all existing staff at Hurley’s Café on three months’ probation. The current supervisor of Hurley’s, James Mansfield, has been offered the position of 2nd In Charge and he has accepted.

While settlement on the purchase of the business is not for another few weeks, the seller has agreed to grant us full access to the store’s operational processes and store information. You should liaise weekly with the Finance, Audit and Risk Management (FARM) Committee here at head office concerning the marketing, finance and store management functions that you are investigating. I will set up a regular meeting for you.

Head office has a report on a similar expansion conducted by the NSW team that may help you in your research. You may need to review other statistical information and engage specialists to help you with your investigation. The legal firm Goldsmith Partners are advising MacVille on the Hurley’s Café acquisition and would be available to help you with legal or any compliance issues.

The landlord of the shop in Toowoomba, Ron Langford, is also a local councillor and has offered his assistance in getting established in Toowoomba. He has offered his availability for email address for correspondence.

When you have finished your report, please name it according to our document naming conventions and send it through. Once I have received and discussed your risk review report, we can move onto the next stage of the risk management process.

Regards

1. Kinski

CEO MacVille Cafés (Qld)

MacVille document naming convention

Files should be saved using the document name, the date and the document version. For example, a meeting agenda for a meeting on 1 March 2014 would be saved as ‘Meeting Agenda 01032014 v1’.

Site visit – New Toowoomba store (the existing Hurley’s Café)

You received permission from Paula to travel to the Toowoomba store to start your research. Paula had cleared it with James Mansfield, the current senior supervisor, who will spend most of the day with you helping answer your queries. She also arranged for you to spend time with Ron Langford, the store’s landlord.

Meeting with James Mansfield

You arrived at the café and noted the two hours of drive time that it took to get there from the CBD of Brisbane. You met with James, who took you through a complete overview of the store and the surrounding area. He was OK with the idea that you needed to take notes in preparation for a report.

After lunch, you went over your notes to revise and edit key concerns and significant events that you had written down earlier:

Notes from meeting with James Mansfield

• The location of the store on the corner of the two main streets of the city makes for easy access for local customers and high visibility for
• The long drive from Toowoomba to Brisbane would make attending the weekly managers meeting difficult considering many meetings did not finish until into the evening after There are also manager training sessions that need to be completed over the next six months in with a few other assistant managers. Navigating the steep narrow climb up the range with trucks blocking the way is quite difficult even in daylight hours. Being a competent driver you feel that it would be unlikely that you would be involved in an accident, but it still concerns you considerably.
• The two-hour delivery time would make fresh pastry deliveries from the company’s central bakery plant impractical. The pastries would arrive after the morning These are a key part of the MacVille product assortment.
• There is also a concern about getting the company-branded supplies through as quickly as a CBD Brisbane store
• Hurley’s Café was a family-run store and some family members were employed on the staff. James was engaged by the family to supervise the operations of the store and Mr Hurley as manager would authorise wages but anyone can authorise
• When asked about written policy and procedures manual, James said that Mr Hurley set the policy and procedures verbally and on the few days each week he was in the store he would show the staff how to do things the way he wanted them
• Water use – Water wastage present; the dishwasher is often run when only half full; fruit and vegetables are washed under a fast-running tap; toilets all use the single

flush system; James explained that Mr Hurley instructed the staff to keep the non- native flowering plants in the courtyard fully watered.

• The dishwasher was always set to the full wash setting and has a Water Efficiency Labelling and Standards Scheme (WELS) rating of The more water efficient 5–6 star dishwashers cost about $6,000 and above.
• Dual-flush system would cost about $7,500 to upgrade. The store currently uses 41,500 litres a

• James spoke about the café attracting a large percentage of retirees because of the easy access to buses and the store’s central location.
• The same staff member that completed the cash register balancing also completed the bank deposit form and did the banking as The banking was not done every day and often $4,000 was kept on the premises overnight in the cash register. There was no safe. There is a bank two shops away but the Hurley family bank is a couple of blocks away and there was not always time to do the banking.
• James replied to your question about the possibility of break-ins, saying that there was a 50% chance of it happening in a year and the consequence was
• Not all takings from the cash register by family staff members were
• The fit-out looked old and unattractive in parts, with some chairs unstable and broken and some parts of the worn carpet were simply taped over with gaffer
• One of the staff was a qualified chef who had developed an innovative and popular range of rice wraps that were tasty, gourmet and None of the other cafés in the area offered these.
• No established process for dealing with injuries that happened at
• James gave a brochure about an innovative frozen par-bake cooking system that was under the limit set by council for an exhaust system, yet it cooked fresh bakery items in 30 minutes from frozen par-baked
• The computer with all the store’s employee details, and financial records was not password protected and anyone could access the information.
• James’s response to your question about the lack of sales promotion techniques was that he could not get the staff interested in the activity so he stopped trying to make it happen.
• The employee detail form requested information about the employee’s entire past health issues.
• The wage and superannuation records seemed to be incomplete, with many calculations being worked out by the number of hours worked multiplied by a set ‘in the hand’

Meeting with Ron Langford

You met with Ron Langford in his office to discuss the café, council by-laws and aspects concerning the surrounding district. You took notes that included the following significant information.

Notes from meeting with Ron Langford

• Ron explained that there were opportunities for opening more cafés in the surrounding shopping centres like Wilsonton, Clifford Gardens and K-Mart Plaza.
• Ron handed you an extract from a government report, ‘Economic Brief’.
• Ron explained that the federal government was now introducing legislation that backs up the local by-law concerning efficient water usage, particularly by The current by-law has fines of up to $50,000 for excessive water breaches. Ron did explain that the council was allowing some time to ‘make good’ under certain circumstances on a case-by-case basis. Ron also agreed with the idea of installing a water tank in the courtyard for the café to use and would help get it built.
• Ron explained that Toowoomba was obviously a place for retirees and the population was
• Ron spoke about the federal government’s National Broadband Network being rolled out in Toowoomba, which would allow efficient and effective video streaming and
• Ron spoke about a current by-law that is due for implementation on the first of next month, which will allow cafés to expand their footpath dining and so put more tables and chairs outside their
• Ron also spoke of the fact that representatives of a large international chain of coffee shops had been making enquiries around town about opening a store in the Toowoomba CBD.

Meetings with Senior Management Team and Finance, Audit and Risk Management (FARM) Committee

Soon after you returned from your research trip to the Toowoomba store, you attended two teleconferences.

First teleconference

First, you met with the senior management team. At this teleconference, you discussed issues raised by James Mansfield and Ron Langford and the report on previous NSW expansion, which head office had given you: Report into the acquisition and re-branding of the NSW expansion store. Paula said that there may be some things to learn from the NSW experience.

Key problems identified in the report were as follows:

1. Lack of internal controls, particularly over cash handling, monitoring and
2. Failure to meet compliance standards in WHS, privacy and industrial relations
3. Lack of written policy and procedures to guide staff in carrying out their
4. Lack of a professional business culture in the family run
5. Failure of the business to monitor the external environment and find opportunities and threats to the business.

The team agreed that similar issues would pose a risk to the Toowoomba expansion.

Second teleconference

You then held a teleconference with the FARM Committee. At the teleconference, you relayed the concerns of the senior management team. The FARM Committee decided to allow you time to complete your review and then would include discussion of your review in the monthly Board of Directors meeting.

Appendix 2: MacVille Pty Ltd – Business plan

(excerpt)                                                                                                 

MacVille Pty Ltd: Risk management policy

Introduction

MacVille recognises that risk management is an essential component of good management practice and is committed to ensuring the implementation of risk management processes that focus on the proactive management of risks across the organisation.

This risk management policy forms part of MacVille’s internal controls and corporate governance arrangements. The risk management policy is designed to:

• identify, evaluate, control and manage risks
• ensure potential threats and opportunities are identified and managed
• inform directors, senior management and staff members about their roles, responsibilities and reporting procedures with regards to risk management
• ensure risk management is an integral part of planning at all levels of the

Policy

MacVille is committed to achieving its vision, business objectives and quality objectives by the proactive management of risk at all levels of the organisation.

MacVille will identify, evaluate, control and manage risk throughout the organisation in accordance with the ‘MacVille Risk Management Framework’. See risk management strategy for framework details.

Responsibility and Authority

Directors, management and employees of MacVille have responsibility for implementing aspects of this policy.

Role of the Directors

The Directors have a governance responsibility in the management of risk. This includes:

• determining which types of risk are acceptable and which are not
• setting the standards and expectations of staff with respect to conduct
• approving major decisions affecting MacVille’s risk profile or exposure
• monitoring the management of significant risks to reduce the likelihood of potential organisational risks and threats or failure
• being satisfied that risks are being actively managed, with the appropriate controls in place and working effectively
• annual review of MacVille’s approach to risk management and approval of changes or improvements to key elements of its processes and

Role of the Senior Management Team and Store Managers

Key roles of the senior management team are to:

• implement policies on risk management and internal control where this is deemed appropriate
• identify and evaluate areas of significant risks potentially faced by MacVille for consideration by the Directors
• identify areas where risk management is not adequately addressed and advise the Directors accordingly
• review and update the Risk Management Strategy
• undertake an annual review of the effectiveness of systems of internal control and provide an annual report to the Directors, including a summary review and respective

Role of Café Employees

Key roles of employees are to:

• familiarise themselves with the content of the Risk Management Policy and clarify any aspects necessary with a senior team member
• consider any risks they feel could impact on them meeting their objectives and either manage the risk if it is in their control to do so, or inform a management team member of their concerns
• advise senior management, in the first instance, or the Board of Directors, if concerned about any fraud or unethical

MacVille Risk Management Framework

This framework encompasses a number of elements that together facilitate an effective and efficient operation, enabling MacVille to respond to a variety of operational, financial, commercial and strategic risks. These elements include:

• policies and procedures
• monthly reporting
• business planning and budgeting
• risk management review
• external

Policies and procedures

A series of policies underpin the internal control process. These policies are endorsed by the directors and are implemented and communicated by the senior management team to all staff. These policies include:

• Human Resources Policies:
  • Staff Travel Policy

• Harassment Policy
• WHS Policy
• Return to Work Policy
• Work–Life Balance Policy
• Equity/Discrimination/Diversity Policy
• Parental Leave Policy
• Organisational Culture Policy

• Financial Policies:
  • Bad Debt Policy
  • Cash Reserving Policy
  • Revenue/Expenditure Recognition Policy
  • Finance, Audit and Risk Management (FARM) Committee Terms of Reference, including delegations
• Corporate Governance Policies:
  • Board Protocol
  • Sitting Fees Policy
  • Directors Remuneration

Monthly reporting

Decisions to rectify problems are made at regular meetings of the senior management team. Comprehensive reporting at Board and Sub-committee meetings is designed to monitor key risks and their controls.

Business planning and budgeting

The business planning and budgeting process is used to set objectives, agree on action plans, and allocate resources. Progress towards meeting business plan objectives is monitored regularly by the senior management team and by Directors at Board meetings.

Risk management review

The Finance, Audit and Risk Management (FARM) Committee is required to report at Board meetings on internal controls. The FARM Committee pays particular attention to risk management. It is the CEO’s responsibility to brief the Directors periodically and as appropriate on the development of policies and procedures to ensure effective and efficient operations, risk management strategies and implementation. In addition, the FARM Committee oversees internal audit, external audit and management as required in its review of internal controls. The committee is therefore well placed to provide advice to the Board on the effectiveness of the internal control system, including MacVille’s strategy for the management of risk.

External audit

The final audit of financial statements is controlled by an external chartered accountant who provides feedback to the Board through the FARM Committee.

Procedure: Development of a Risk Management Profile

The following outlines the process for developing a risk management profile.

1.   Establish the context:

• Define and identify the environment, characteristics and stakeholders, their goals and objectives, and the scope of the specific risk management process.
• Develop criteria against which risks are evaluated and identify the structure for risk

2.   Identify and describe risks:

• Risks are best identified through a collaborative approach involving a cross-section of
• All conceivable risks must be Ensure any certainties are identified as problems and addressed in the risk management profile.

3.   Conduct current risk analysis:

• An analysis of the risks is conducted to determine their causes, and estimate their probability and This analysis provides the basis for working on the ‘right’ risks.

4.   Conduct risk evaluation:

• Risks are considered and prioritised according to their potential impact, and each risk is assessed to determine its level of

5.   Develop and implement proposed risk treatments:

• Risk treatments are developed to cost-effectively reduce, contain and control
• Formal risk management reporting mechanisms are defined and
• Categorise the risk likelihood.

6.   Monitor, report, update and manage risks:

• As risks change constantly, the risk profile is continuously monitored, reviewed and updated by New risks may be identified as more information becomes available and existing risks may be eliminated through the effectiveness of the risk treatments/actions.
• Identified risks, and monitoring and management activities should be recorded and stored as follows:
  • risks identified through regular audit should be recorded on the Risk Audit Log
  • risk management activities should be recorded on the Risk Management

MacVille’s Risk Areas

The following are four broad areas where potential for risk to MacVille has been identified. Under each area, examples of possible risks are detailed.

Operational/organisational:

• legal and regulatory compliance
• technology
• insurance
• resources: human, physical
• logistics
• marketing
• product quality
• communications
• infrastructure, plant and equipment
• customer interaction
• market

Financial:

• accountability
• fraud or theft
• capital investment
• interest rates
• loss of income, funding/finance.

Governance:

• conduct of Board of Directors
• conflict of

Project management:

• procedures and tools for project management
• stakeholders – strength of relationships/conflict of interest
• human resources
• financial

MacVille Pty Ltd: Risk management strategy

Introduction

MacVille recognises that risk management is an essential component of good management practice and is committed to the proactive management of risks across the organisation.

The strategy is designed to:

• identify, evaluate, control and manage risks
• ensure potential threats and opportunities are identified and managed
• inform directors, senior management and staff members about their roles, responsibilities and reporting procedures with regards to risk management
• ensure risk management is an integral part of planning at all levels of the

Guiding Principles

• MacVille is committed to achieving its vision, business objectives and quality objectives by the proactive management of risk at all levels of the organisation, acknowledging that embracing innovative ideas and practices carries with it risks, but that these are identifiable and measurable and therefore capable of being subject to realistic risk mitigation

Responsibility and Authority

• The Board of Directors have responsibility for ensuring that risk management is in
• The Finance, Audit and Risk Management (FARM) Committee has the responsibility of reviewing the Risk Management Action Plan on a six-monthly
• The CEO and the senior management team have responsibility for managing risk and advising the Board on appropriate
• The CEO and the senior management team support and implement policies approved by the directors.
• Key risk indicators will be identified, closely monitored and action taken where necessary, by the staff and

MacVille Risk Management Framework

This framework encompasses a number of elements that together facilitate an effective and efficient operation, enabling MacVille to respond to a variety of operational, financial, commercial and strategic risks. These elements include:

• Policies and procedures: A series of policies underpin the internal control process.

• Reporting: Decisions to rectify problems are made at regular meetings of the senior management
• Business planning and budgeting: The business planning and budgeting process is used to set objectives, agree on action plans and allocate Progress towards meeting business plan objectives is monitored regularly by the senior management team and by directors at Board meetings. Contingency planning is undertaken as required.
• Risk management review: The FARM Committee is required to report at Board meetings on internal
• CEO: The CEO has responsibility to brief the Directors periodically and as appropriate on the development of policies and procedures to ensure effective and efficient operations, risk management strategies and
• External audit: The final audit of financial statements is controlled by an external chartered accountant who provides feedback to the Board through the FARM

Definitions

Risks are identified on a scale of likelihood of occurring in the next 12 months and assigning an impact or consequence to the risk as high, medium or low. High includes either a significant shortfall of around 40% in achieving budget or a significant reduction in ability to function. Medium includes either a shortfall of budget of between 10% and 20% or some reduction in function. Low indicates minor reductions in achieving budget or minimal reduction in performance.