Developing A Risk Management Plan For A Small Business Or Organization
- December 21, 2023/ Uncategorized
Purpose of risk management plan
Purpose of risk management plan
Every company operates in uncertain events that when they occur may have positive and negative impacts on its objectives. According to Lyles, Berke and Smith (2014), it is paramount to have a risk management plan which helps in the definition, monitoring, responding and mitigating risks (92). For the purpose of this assignment, it will consider my place of work and for that case a hotel called Kter. As such,it will be important to consider a brief overview of the organization.
Brief overview
Kter hotel deals with the normal foods through the company deals with foreign guests and high profile people. The company has been in operation since the year 2000 and it has become one of the most popular company in the region. Just like any other hotel, it operates under unforeseen events that need be taken into consideration in a risk management plan.
The company deals with both internal and external stakeholders. The internal stakeholders include:-
- The management team
- The team members
- The sponsors
- Board of directors(owners)
- Head of departments
- Vendors
- Customers
The external stakeholders include:-
- Media
- Community and this includes citizens
- Competitors
- Governments including legal system and courts
Scope of risk management required
Risk management plan will consider both the internal and the external environment that affect the operations of the hotel. As Purdy (2010) suggests, the project will consider the workplace, the vendors and risks that can be posed by the government or even the competitors (p.882). In order to understand the internal and external influences, it will be important to discuss SWOT and PEST analysis.
Swot analysis
|
Strengths 1. Strong customer relationship 2. It is flexible hence it will be able to handle changes easily 3. It is situated promixally hence it attracts a huge number of customers which translates to high sales |
Weaknesses 1. High dependency on the tourists who are usually sensitive to political environment 2. Low barrier sector due to many failures that reduce profit margin 3. Low productivity especially in low season |
|
Opportunities 1. Rise of technology which helps in strengthening customer relationship 2. Increasing globalization which is likely to bring more customers |
Threats 1. There are black markets which are threats to normal working conditions 2. Distance travelling is affected by climate change 3. Terrorism and seasonal political instability |
PEST analysis
Political:-There are dangers of terrorism and deteriorating diplomatic relationships that affect the operations of the hotel
Economic:-Heckmann, Comes and Nickel (2015) asserts that is slow economic growth in America and ongoing turmoil of US-China Trade deal (p.125).
Social:-More people are preferring U.S for holiday and even for business bench marking hence increasing market niche (Hartmann and Driessen, 2017 p.150).
Technology:-Online booking of guests room have directly increased the profit margin including advertising though social media.
Risks involved
Some of the risks involved in the hotel are:
- Eruptions of fire
- Decline in business travel
- Terrorist attack
- Extreme weather
- Food poisoning
- Unregistered food vendors
- Litter collection
Part B
Just like any other company, company Kter is guided by the following mission,vision and objectives.
Mission:-Being a global hotel guided by excellence and innovation.
Vision:-Being the number one hotel destination
Objectives:–Increasing loyalty of the customers
-Being a sustainable company
-Maximizing efficiency in the various departments
In addition to this, it is guided with the following critical factors:
Location:-It ensures that the hotel is accessible easily which ensures that guests take advantage of this.
Brief overview
Global outlook:The hotel is focused on keeping its services to international standards in terms of cleanliness and customer management.
Quality management:-The hotel keeps into consideration employee satisfaction and involvement of all stakeholders.
Financial objectives of the company are:
- Growth of revenues
- Increase of profit margins
- Sustainability
- Increase in returns on investment
Risk identification methods
As Hopkin (2018) notes, risk identification will involve the following; the project team, appropriate stakeholders and will also include evaluation of cultural and environmental factors.
Risk analysis tools
The risks identified will then be then be assessed to determine possible outcomes and their effects. Then qualification will then be used to determine the risks that will come on top and those should be ignored.
Likelihood and levels of risks
Probability
High-Probability of occurrence is 70% and above.
Medium-Probability of occurrence is between 30% and 70%.
Low-Probability of occurrence is below 30%.
Impact
High-This is the risk that will affect the costs of operations and performance of the hotel.
Medium-Risk that have slight impact on the costs operations of the hotel.
Low -Risks that have little impacts on the operations of the hotel.
Risk management Objectives
The following are two key roles of the management
Occupational Health & Safety Risk Management is necessary and as Hartmann and Spit ( 2016) asserts, mitigation procedures should be done within the stipulated standards (p.362). Additionally, assessment will be done upon the compliance of the applicable legislation and prescription.
After an assessment is done, there will be need for selection of risk treatment strategies, planing and implementation.
The following are available strategies of mitigation
- Avoidance:-Some risks like fire can be avoided by fixing lose power cables.
- Transference-Some like financial loss can be transferred to another party like insurance
- Mitigation:-Scholten, Sharkey Scott and Fynes (2014) note that Active reduction of the consequences of risk by establishment of alternative designs and models.
- Acceptance:-Whenever seems like there are no alternatives then the risk can be accepted such as natural catastrophic.
The proposed plans will be integrated and managed by the overall management of hotel and every employee will be involved in the project. As such, the activities of mitigation will be continuously monitored and reviewed whether everything is on track.
References
Heckmann, I., Comes, T. and Nickel, S., 2015. A critical review on supply chain risk–Definition, measure and modeling. Omega, 52, pp.119-132.
Purdy, G., 2010. ISO 31000: 2009—setting a new standard for risk management. Risk Analysis: An International Journal, 30(6), pp.881-886.
Hartmann, T. and Spit, T., 2016. Legitimizing differentiated flood protection levels–Consequences of the European flood risk management plan. Environmental Science & Policy, 55, pp.361-367.
Hopkin, P., 2018. Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers.
Hartmann, T. and Driessen, P., 2017. The flood risk management plan: towards spatial water governance. Journal of Flood Risk Management, 10(2), pp.145-154.
Lyles, W., Berke, P. and Smith, G., 2014. A comparison of local hazard mitigation plan quality in six states, USA. Landscape and urban planning, 122, pp.89-99.
Scholten, K., Sharkey Scott, P. and Fynes, B., 2014. Mitigation processes–antecedents for building supply chain resilience. Supply Chain Management: An International Journal, 19(2), pp.211-228.
