Ranking and treating risk
This assignment has been designment to address the following subject learning objectives:
Be able to critically interpret the risk management concept.
Be able to assess and critically evaluate the role of the decision maker in risk assessment.
Be able to interpret risk through modelling techniques;
Design and implement strategies to diminish risk through the potential to self insure, or to transfer risk using different product solutions.
Part 1 Theory:
Consider the following statement:
‘Risk managers should mainly focus on the consequences of an event rather than its likelihood as these consequences determine the impact on the business.’
Examine the interaction between likelihood and consequences and develop an argument both for and against the statement. Your commentary should contain a critical argument with a brief introduction, stating where you stand and how you argue your case, the two cases (for and against) and then finish with a conclusion. Include an analysis of the role of a business risk manager offer some conclusions as to how prominent the role of the business risk manager should be within the wider management of the business, i.e. when compared with other management functions such as strategy, governance, product development, marketing, finance, operations, etc. Justify how you reached your conclusions.
Part 2 Workplace Application:
Part1: Compare and contrast the risk strategies of retain, transfer or avoid risk. Your discussion should include the key considerations a risk manager should take into account when making such decisions (e.g. cost versus benefit framework). Use your chosen work case problem to generate a working example for each of the three strategies. Recommend the strongest strategy for your chosen work case problem and justify your decision.
Part2: Technology is rapidly changing and improving how we can profile risk. Increasingly this is allowing more sophisticated modelling of risk. The Bowtie approach is set to replace some older methods. This means increasingly software applications such as BowtieXP are becoming available to expedite this process. Hence, your boss has asked you to trial the program and give a report on the program in which you offer a recommendation as to go ahead and implement the program.
Your brief is to:
1.Download the Bowtie XP Standard program “https://www.bowtiexp.com.au/”, enter all your current data and attempt to produce a series of reports in order to examine the software features;
2.Write up a report to your boss detailing the:
a.Theoretical foundations of the program;
b.Produce a series of reports from the software
c.Discuss the features and benefits of the software (you may like to insert the Bowtie reports and then discuss them individually);
d.A final recommendation stating whether your company should implement the program.
Part3: Provide a reflective summary of your own perception of risk and how your understanding of risk, risk analysis, and risk management has developed over the session. Identify what you consider to be the three critical components of risk and risk management. Thinking back to your chosen work case problem and combining that with what you have learnt from this subject, write your manager a memo setting out a brief set of company risk policy recommendations for moving forward.
This assessment is designed to reinforce the use of software in assessing risk. Additionally it will assist you to make appropriate strategy decision to manage the risks identified in the second assessment.
In addition this assessment aims to bring together the work you have done during the session to a conclusion. You will be required to undertake a reflection of the subject that includes commentary on your risk preference and the development of skills in risk analysis and risk management over the session.