Risk Management Plan at Flayton Electronics - Case Study Example

Risk management Plan at Flayton Electronics Introduction With a budget of $100, 000 and a period of six months to accomplish risk management plan certain aspects surface. The purpose of risk plans for organizations is to assists calculate probability of events that might be a risk. With respect to this eventuality, risk management teams in organizations always quote the impact of the risk. The other points to consider are how to mitigate risks and the certainty of their application on the organization. In order to create a formidable risk plans certain aspects need considerations. Some of these aspects involve the creation of the risk management framework, the amount of funding as well as the category of risks (Teller, Alexander and Hans 67-80). Therefore, the management team tasked with risk management considers the risk management structure. Risks influence need to be of consideration while consideration of the event and probability of risks ranks high. On the other hand, organizations need to analyze the organization’s risk management in terms of benefits and losses. Risk management plans needs to be analyzed to read their impacts. Planners additionally draft contingency plans, ways of mitigation and level of risk exposure (Forbes, Simon and Malcolm 1241-1250). The points to consider in the creation of a risk management plan are; identification of the risk, contingency for each risk and the methods of eliminating risk influence. Management teams need to develop a list for all risk elements, assign probability for risk and the analysis of risk impacts. The next step will be the determination of the risk influence through analysis. A further stage is the ranking of risks into probability of influence. Then next step for the management team is to compute the total risk, develop mitigation strategies, create contingency plans and monitor risks. Scope and Objectives The scope of the risk management plan at Flayton Electronics designing involves a team of experts. This team of experts is drawn from the management executives as well as teams from the manufacturing plants. Due to the fluctuation of the global commerce pattern, manufacturing industries face more challenges than other sectors. For Flayton Electronics, the management team cuts across the processes of managing risks, dwells on the tools and procedures of risk management process. A further look the risk management plans reveals that certain aspects might have negative influence on the processes at the organization. The Electronics industry brings to fore different perspectives on risk management. In such an industry, consideration on risk management does not only consider the threats but opportunities. The objective of the risk management process in the organization is to mitigate risks at the plant. The other important aspect of the risk management plan considers the assessment of mitigation strategies and in the identification of risks in the organization. The scope of the risk management plan spans in a period of 6 months while the cost of the operation is $100,000. The mission of the organization is to maintain a legacy of its products. On the other hand, the threat the organization face is from hacking. Project size The project of managing risk in the organization comes under the leadership of a stakeholder Flaylon. The size of the plan involves the revisiting of companies plans, in order to keep the reputation of the organization to customers. The risk management process will ensure that all team members assist in identifying risks and provision of suggestions. Since the organization has realized that the company has the risk of hacking in their systems; there has been considerable efforts at reducing this effect. These scope in management of risk costs the company $100,000. This cost relates to the costs of updating the system and that of legal counsel. Risk Management Risk Identification Risks in organization have the ability to influence the course of operations. The probability of hacking in the system for Flayton Electronics may influence its reputation. Therefore, the project’s management teams have diverse sources to identify the risks. Through constant analysis of the influence of this risk, the organization has overcome hacking influences. Incase hacking in Flayton Electronics becomes successful; the organization will lose its reputation. It is then prudent to note that risks occur in organizations in almost every process. However, in analysis of such risks, project team need to consider the project’s lifecycle (Forbes et al 1241-1250). Project lifecycle provides project teams a field to plan and design strategies. However, in such analysis it is important for project teams to include the probability of an external or internal influence. For Flayton Electronics, the risk factor in consideration is the hacking of the system. This influence is obviously an external influence and requires team cooperation. In the management of risks in organizations, the first influence to consider is the awareness of team members of the risk factors. Awareness, assist team members identify risk with ease and develop strategies. For the electronic firm Brett Flayton is aware of the possibility of their system being hacked. This possibility need to be documented and communication made to team members. In practice, every team member in the project needs to be aware of risk factors, its influences, and methods of communication. Risk Tools and Technique The global environment faces many challenges that amount to risk. Regarding these challenges an organization need to recognize various challenges that might yield to a risk. In the past decades, various techniques in solving risk have been of assistance to organizations. However, in this span of time, the most important aspects include the case-based reasoning system and the matrix approach. For Flayton Electronics there are various techniques and tools to use manage risk. On the identification of risks, the organization may use brainstorming, interviewing, or Delphi technique. Other aspects to consider for such organizations include assumption analysis or the use of checklist analysis (Szabo 776-781). SWOT analysis and expert judgment may be important tools for electronic industry organizations. For Flayton Electronics root cause analysis is probably the most influential tool. The management as well as teams may be able to analyze the root causes in their risk management Endeavour. Considering the risk analysis property in the management of risks in organizations, risk impact and probability analysis serve the purpose. Organizations may also decide to use impact or the probability matrix (Kutsch, Tyson, and Mark 30). Another important tool in this category is the use of expert judgment and the use of urgency assessments. For the electronic organization, urgency assessment and risk probability assessment will be of assistance. Through the probability assessment, the organization is able to plan of future actions. On the other hand, urgency assessment assists the organization in making contingency plans. In relation to the tools applicable in risk management, interviewing will be a tool for data collection. Other tools present in the management of risk, include the probability distribution, sensitivity analysis and cost and risk analysis. Risk assessment is another important tool in the management of risks. The organization may employ the cost risk analysis to evaluate if the risk analysis process meets firms needs. The cost risk analysis technique ensures that the organization manages risk but also remain profitable in the market. The organization might employ risk register as a tool for assessing project’s risks (Szabo 776-781). This analysis will assist in the provision of faster solutions to the problem. Another important tool for the organization includes the use of probabilistic risk assessment tool. This tool assists the organization determine the exact extent of a risk and the mode of overcoming. Risk Review and Reporting Flayton Electronics’ risk review includes the functions of customers, employee, and banks. The management team is able to assess the risk factors in the system. Since the organization’s risk management plans runs on a budget of $100,000 the organization employs software to detect malfunctions in the system. On the other hand, customers review is essential in informing the organization of various influences on the system. Banks are important players for the electronic firm. The influence of banks assists the organization in providing detailed information. Project reporting ensures that project’s stakeholders have information on the progress of the organization. Reviews on the other hand assist in the identification of new projects. Projects’ reviews are essential in planning risk management in firms. Reviews are important part in management of risks inn firms. Reviews are important in ensuring that organizations understand new risks. Reviews are also important in understanding the progress of plans. While using it is important to understand reviews of projects, it is imperative to consider certain aspects. The aspects to consider in designing plans include scope, resources, capabilities, and technology. Other important aspects to consider include budgets and legal aspects. The organizations’ reporting on risk management includes the identification of the risk in a label (Szabo 776-781). The label can be in form of a risk number, status of the risk or based on dates. Other areas of identification include the use of risk level or on certain level of description. For Flayton Electronics there needs to be a review of the risk of breach of privacy. This will see the organization report the influence of the risk to stakeholders as well as management teams. Probability and Impacts Scale Probability Cost ( $ 000) Time Impact Very high >87% 100 6 months Very high significant Impact High 73-85 70 4 months Significant enough medium 67-72 50 3 months Significant impact Low 56-72 40 2 months Low significance Nil Read More