: Apply risk management practices.

Read the scenario and complete the tasks that follow.

Scenario 3: Applying risk management practices.

You are the branch manager at Hudson's Real Estate, Napier.

Information about your office

? It is located in an art deco building that is situated close to the sea on flat land. The building houses two tenants - your office and a fish and chip shop. There is no sprinkler system installed in the building but both tenancies have fire alarms.

? The building has been completely redecorated, inside and out, in true art deco style. The exterior walls are solid stucco but all interior walls (including the partition wall between the tenancies) are wooden framed and clad in GibTM board. Most walls are fairly new, but some original ones still exist - one of these walls in particular seems quite damp and you are concerned about the small dead insects that you are constantly vacuuming up.

? The building is well back from the road with ample parking in front. The front and back doors of the building are solid and sturdy, protected with security locks, but much of the glass in the windows is original, installed when the building was built in 1933.

? You have seven salespeople in the office: three experienced, reliable people; three fairly new people; and one person who has worked for the company for 6 years but needs constant supervision because he has a tendency to open his mouth before he thinks and makes statements to customers without checking their accuracy.

? The side wall of the office is in full view of the police station, but the back wall is shielded from sight. There is little to no vandalism or graffiti in the area.

Information about natural hazards in the Napier area.

? Since the massive earthquake in 1931 that destroyed most of the city and claimed 256 lives, there have been regular, but small, earthquakes felt in the region (there were 20 in 2018). Being in an exposed location on the east coast, and close to the Hikurangi induction zone where the Pacific plate meets the Australasian plate, there is a risk of tsunami if an earthquake were to take place out to sea.

? There are no known active volcanoes in Hawkes Bay, but any major eruption in the volcanoes of the Central Plateau (just 119 km away) could send an ash plume over the Hawkes Bay region - light ash falls could cause disruption to traffic whereas heavy ash falls could collapse flat roofs.

? Storms and flooding are a hazard in the area. There has been serious flooding in parts of Napier in recent years, but this has occurred on flat land several kilometres from the coast. Tornadoes are rare in the Hawkes Bay area with most tornadoes in New Zealand occurring in the north and west of the country.

? Termites are quite rare in buildings but thrive in damp timber whether inside or outside. They do not attack dry timber. A bad termite infestation could destroy a building. Termite problems are generally restricted to older buildings that have dampness issues because of their age and were built using untreated timber.

In order to update the agency's risk management plan, you need to carry out the following tasks.

Task 3a

i. Using the table below (Table 1), identify the top 10 potential sources of risk to the business given the building's properties and its location, and the nature of the business and staff. Identify the main areas of potential impact from each identified risk for the business by ticking the relevant boxes. (If a listed risk is not applicable, write N/A in the boxes.)

ii. Provide reasons for your selection of risks. 

 

iii. Explain why you considered the other risks to be less important. 

 

Task 3b Using the risks identified in the table (from Table 1) and the rating scales below (Table 2) complete the matrix provided (Table 3) evaluating: 

i. The probability of each risk occurring (rated between 1, negligible, and 6, very likely - could happen this year). 

 

ii. The likely severity of the business disruption that each risk will cause (rated between A, no impact, and F, premises destroyed). 

 

iii. The financial impact on the business (rated between 1, minor, and 6, bankrupt). Provide reasons for your scores for each risk. Table 1.

 

Provide reasons for your scores for each risk.

Transcribed Image Text:

Cause of risk Risk to Risk to staff building Theft/burglary Legal breach by staff Computer virus/hacking Electrical fault/surge Vandals Fire Earthquake - major Earthquake-minor Tsunami Volcanic eruption Tornado Storm/ flooding Termites Leaky building syndrome Impact by vehicle Area of impact Risk to furniture, Risk equipment, computers Risk to to reputation records Risk to vehicles Cause of risk Risk to Risk to staff building Theft/burglary Legal breach by staff Computer virus/hacking Electrical fault/surge Vandals Fire Earthquake - major Earthquake-minor Tsunami Volcanic eruption Tornado Storm/ flooding Termites Leaky building syndrome Impact by vehicle Area of impact Risk to furniture, Risk equipment, computers Risk to to reputation records Risk to vehicles