Risk Workshop and Risk Register - Flayton Electronics - Case Study Example

Risk Workshop and Risk Register Introduction Risk management is a procedure of identifying and analysing the risks in order to mitigate the uncertainties through effective decision making. It is an important aspect for the success of an organisation. With regards to the case, Flayton Electronics faced several risks owing to the lack of risk management planning. The essay intends to identify the advantages and disadvantages of Electronics instruments regarding its security issues, which is directly and indirectly related with breach of legacy or hacking. Several electronic instruments such as cameras and stereos have brought numerous risk factors for the stakeholders. On the other hand, it has been perceived that banking system is involved with risk factors including legacy, data breach and hacking related to credit cards system (Elbedour & Wooten, 2014). Several global organisations have faced challenges from the internal and external environment. Increasing price of raw material, high taxation, rigid business rules and regulation are identified to impose challenges for organisations. These factors have directly affected the relation of stakeholders with the organisations in global market place (Elbedour & Wooten, 2014). In this essay, the objective is to identify the required pre-workshop activities. Apart from this, a workshop agenda based on the Hillson and Simon (2012), a text is prepared, which defines the sample agenda for first risk assessment in a two day risk workshop. It will provide suggestions regarding the time intervals for each activity and accordingly will justify the relevance for the agenda in this particular case. Moreover, it will determine the top five threats of data breaching with the assistance of Risk Register. Along with this, it will justify the probability and impacts for each threat. Furthermore, it will require identifying the top three opportunities with the help of Risk Register. Finally, the essay will elaborate and justify those opportunities probability as well as impacts significantly. Identify the Required Pre-Workshop Activities In order to identify the pre-workshop activities, it can be asserted that Flayton Electronics will need to identify the risks associated with the project. Apart from this, it will rank the risk factors on the basis of their threat to the operational functions. Simultaneously, the organisation needs to reduce the risk factors through effective risk management planning for increasing its operational efficiency. Risk Workshop Agenda During the preparation of the risk workshop agenda, it is essential to maintain the following structure: Day 1: Morning Introduction. Highlight the major issues of the workshop. Project Objective. Decrease the probability of risk and enhance opportunity for global business. Risk Management Briefing. More specially mention the active threats and opportunities for risk management. Identify the Risk. After briefing about the risk management, it is highly essential to identify the active threats for management of the business. Day 1: Afternoon Justification. Even after recognising the risk it is essential to identify a proper rational behind the threat. Information about the Risk. Simultaneously, gathering more information about the risk is highly important, which will help to prevent the risk through proper planning. (Source: Hillson & Simon, 2012) Day 2: Morning Assessment Scheme. It will require identifying the probability and impact of the risk through Risk Workshop and Risk Register. Solution. After the assessment of probability and impact of risk, it is highly essential to identify a solution for mitigating the risk factors. Day 2: Afternoon Review. Even after identifying the solutions, it will be required to review the identified solutions related to the risk factors. Stop the Workshop. Finally, after reviewing the solutions for the risk factors, it will be required to implement those solutions in Flayton Electronics. (Source: Hillson & Simon, 2012) Determining the Top Five Threats in Risk Register The top five threats in risk register, has been identified as high taxation, which can affect the performance of the global business. Apart from this, loss of customers, cyber risk, price of material and extensively strict regulations are the factors, which also pose challenges for the businesses operating in the global platform (Lloyds of London, 2013). These top five threats are illustrated below: High Taxation During the early 21st century, High taxation has become one of the vital risk factor in the global business. It has been observed that the perception of taxation has changed for most of the multinational corporations. Thus, over the last few years most of the organisation has been involved in unethical business practices owing to high taxation. For instance, it can be asserted that organisations like Microsoft, Apple, Google, Starbucks and Amazon among others have been involved in tax avoidance related issues, which has adversely affected the goodwill of these global organisations (Lloyds of London, 2013). Loss of Customers Another crucial threat for the business organisations is the loss of customers. This issue is faced by several business organisations operating in the global platform with diverse customers. As per the observation, it has been identified that due to flaws in production function a massive number of electronic equipment had raised significant threat for the business organisations for increasing complexities. As a result, most of the consumers have been influenced in a negative manner due to the availability of low quality products with minimum security standards (Lloyds of London, 2013). Cyber Risk Cyber risk is a burning threat of modern civilisation. As per a global based report 2011, it has been observed that cyber risk has been positioned on the third spot in case of risk register threats. During the last few years, it has been identified that hacking and revenge related issues have increased the tendency of cyber risk. Moreover, most of the cyber risks are related with web-based attacks, malicious code and denial of services among others (Lloyds of London, 2013). Price of Material Raw material cost has become one of the crucial threats for organisations. It has been observed that during the last few years that the price of raw materials has been increasing tremendously. As a result, most of the multinational companies faced similar kind of challenges in global market place during purchasing raw materials. As per the global based report 2011, it has been observed that increasing price of raw materials is on the seventh position in the overall risk register threats (Lloyds of London, 2013). For instance, during the year 2011, the Fukushima nuclear disasters lead to the loss of number of oil barrels and gas production. As an effect of this disaster, the prices of oil and natural gas increased almost five times for the US, whereas Asian consumers paid almost eight times higher than the actual price. Extensively Strict Regulations Extensive strict regulations have placed several limitations on most of the global business firms. Moreover, it has been perceived that financial regulations have become strict than earlier, which has initiated more problems for global organisations. Thus, it has been revealed that most of the organisations have argued about the regulation enforcement (Lloyds of London, 2013). Justify the Probability of the Threat and its Impacts In order to identify the probability of threats and its impact, it can be asserted that high taxation has initiated difficulties for global business organisations. Multinational organisations have focused on their risk management strategies in order to reduce the effect of influential tax policies. For instance, it can be stated that global business organisation such as Vodafone have implemented risk management strategies in order to enhance stakeholders value. Moreover, it has been revealed that the charges of tax and duty have increased in a higher rate during the last decades. Similarly, it has been perceived that high taxation enhances the price of most of the commodities, which further influences the consumers in a negative manner. On the contrary, few organisations have reduced the quality of the products in order to maintain its cost and profitability. This has further affected the organisation due to the increased loss of customers (Lloyds of London, 2013). Apart from this, it is viewed that high price of materials and rigid regulations have initiated various challenges for business organisations. It is evidential that the prices of raw materials have been increasing in a massive manner. Contextually, governmental authorities and financial institutes along with stock exchange markets are becoming conscious about the business terms and policies for managing the risk and ensuring security. On the other hand, in case of import and export quality control and inspection authorities have become more rigid, which is creating more difficulties for several global organisations (Lloyds of London, 2013). Simultaneously, one of the most threatening factors related to risk management is cyber risk. It has imposed difficulties for Flayton Electronics from various ends concerning the safety and security aspects. It has been observed that several organisations have been victimised due to the arising risks of hacking in the global platform. Evidentially, Cyber criminals are not only hacking confidential information but also breaching the rights to privacy of the users. These aspects are causing massive threat to the security of the organisation (Bynum, 2008). Top Three Opportunities in Risk Register On the contrary, in order to identify the top three threats in risk register, it has been identified that current analysis is one of the most vital factors, which has helped business organisations to perform better in global platform. Apart from this, preventive and mitigation action along with control and planning actions, have helped domestic and international business organisations to attain higher profitability in an effective manner (Koller, 2011). The top opportunities in the risk register are illustrated below: Current Analysis Through the help of current analysis global organisations have made significant efforts in terms of enhancing the capabilities of their employees, which helped in attaining high level of growth. Furthermore, it has also helped organisations to properly plan their functional operations and financial budget for managing the risks and uncertainties in future. It has also helped organisations to enhance their reputation by assessing the risks through proper risk management process (Koller, 2011). Preventive and Mitigation Action Prevention and mitigation action helps an organisation in developing strategic planning process. Through this process organisations have improved the level of performance and involvement with the stakeholders in an adequate manner. Moreover, it has also improved the internal and external environment for the consumers regarding their safety and security (Koller, 2011). Control and Planning Action In has been observed that through control and planning actions several organisations have improved their external environment regarding the management of risk. Moreover, it has improved the quality of decision making, which helps to enforce a positive reputation of Flayton Electronics in market place (Koller, 2011). Justify the Probability of the Opportunities and its Impacts Risk workshop has few opportunities, which helps organisations to improve the internal and external environment for the consumers. From the above mentioned workshop agenda, it has been perceived that organisations can identify the risk and accordingly establish few solutions for the recognised risk factors. Apart from this, through reviewing the solutions, the impact of the workshop agenda can be determined. This, analysis will help organisations to enhance their relation with stakeholders and to reinforce the bridge between organisations and consumers for increased effectiveness with regard to risk management (Koller, 2011). Simultaneously, it can be asserted that control and planning action along with prevention and mitigation action helps the organisation i.e. Flayton Electronics to deal with risk factors more effectively. Moreover, by following the workshop agenda and risk register, organisations can enhance the capability and efficiency level of their employees for the long term sustainability (Koller, 2011). Conclusion From the above discussion, it has been observed that most of the organisations are facing several challenges from the global market. As per the study, it has been identified that organisations are facing those threats due to improper risk management. Thus, during the study major threats have been identified from risk workshop and risk register. Moreover, it has been revealed that through preparing an agenda for risk workshop, solutions can be identified to avoid the threats of risk. Simultaneously, it will also help Flayton Electronics to reinforce its position in the market place on the basis of the improved risk management process. Thus, in order to conclude the topic it can be evidently asserted that risk workshop and risk register maintaining is highly essential for the domestic and international organisations in modern era. It is also an important aspect for maintaining the security, data breach and confidentiality by reducing the threats of cyber crime and hacking. References Bynum, T. (2008). Computer and information ethics. Retrieved from http://plato.stanford.edu/entries/ethics-computer/ Elbedour, H., & Wooten, N. (2014). Assess organizational readiness. BUS 519, 1-7. Hillson, D., & Simon, P. (2012). Practical project risk management: the atom methodology, second edition. USA: Management Concepts Inc. Koller, G. R. (2011). Risk monetization: converting threats and opportunities into impact on project value. US: CRC Press. Lloyds of London. (2013). Top five risks. Retrieved from http://www.lloyds.com/news-and-insight/risk-insight/lloyds-risk-index/top-five-risks Read More