BSBOPS504 Manage business risk

Topic 1. Establish risk context

Learning outcomes
1.1 Evaluate organisational processes, procedures and requirements
and determine scope for risk management process

1.2 Review strengths and weaknesses of existing arrangements

1.3 Document critical success factors, goals and objectives for area
included in scope

1.4 Communicate risk management process to relevant stakeholders

Establish the risk context
• Before conducting or implementing any form of risk management,
you must establish your risk context.
• Discuss why this is important and how this could be done.
Understand types of risks
• Commercial relationships • Natural events
• Economic circumstances • Political
• Human behaviour • Technology
• Individual activities
• Legislation
• Management activities
Understand categories of risks
• Property-centred risks
• Personnel-centred risks
• Market-centred risks
• Operation-centred risks
• Legislation-centred risks
• Governance-centred risks
The process for managing risks
1. Communicate and consult.
2. Establish the context.
3. Identify the risks.
4. Analyse the risks.
5. Address the risk.
6. Monitor and review the system.
Review existing arrangement
Ask:
• Legal
• Economic
• Social
• Technological
• Policy

Identify strengths and weaknesses.

Determine the scope for risk management
processes
• Identify the scope, such as the stakeholders involved and the time
frame.
• Ask questions such as:
• ‘How is the organisation structured?’
• ‘What is the purpose of the risk management process?’
• ‘What business projects, units or areas will be examined?’

• What else could you ask?

Review the context
Context can include:
• Political
• Legal
• Economic
• Social
• Technological
• Policy
How can you go about understanding each context?
Document critical success factors, goals and
objectives
Critical success factors include:
• scope
• stakeholders
• resources
• goals.

Set SMART goals, and document outcomes and objectives.

Identify stakeholders and their issues
Internal stakeholders:
• Owners
• Employees
• Managers
Identify stakeholders and their issues
External stakeholders:
• Suppliers
• Society
• Government
• Creditors
• Stakeholders
• Customers
Discuss consultation and prioritisation
Obtain support for risk management activities
• Who should you communicate with about the risk management
processes?
• What should you communicate?
• How should you communicate?