Hospitality Risk Management Plan

Question: Describe about the Hospitality for Risk Management Plan. Answer: Introduction Background This research study is about the risk management plan which describes the management process that is basically used in project for planning, determining, assessing, categorizing, and handling risks are associated with achievement of the requirements of the project and goals of the business. This study highlights the risks associated with the project of infrastructure modernization of the kitchen building of Sofitel Noosa pacific resort,(Accor, 2016) which is a hospitality branch of Accor group of hotels in Australia. Codes of Practices Codes of practice are used so as to make legal proceedings effective. Some of the codes of practices related with this project have been discussed below: The duty of care concept of the law mandates the organization to exercise care and diligence at workplace for ensuring that the employees working in the hotel are safe from injuries. The law states that involvement of any kind of contractor in this section will not help in the performance of duty but rather on the other side it will make compliance more difficult (tas, 2012) Contract in the eyes of law is the form, which is to be embedded virtually in all the areas of the hospitality firm. According to common law rules, contract can be verbal or written and can even be used for developing and expanding the relationships between the contracting parties. Consideration, offer and acceptance, intention of having legal and binding relationships are some of the essential ingredients for every contract. Without these ingredients, a legal and binding contract between the parties cannot be concluded. Further, every provision or clause in a contract must be thoroughly checked because any single default can cost huge loss to the hospitality firm (Harvard, 2016). The law related with the environmental acts states that the hospitality firms should be licensed under the environment protection act, with the environment authorities. Firms are needed to follow risk assessment tasks and to offer detailed information regarding the building of modernized kitchen building in the hospitality firm (Queensland Government, 2016). The information act offers the individuals and the stakeholders of the hospitality firm to avail the rights of accessing the documents, which are related to the infrastructure change management (Government, Freedom of Information, 2015). Privacy is implied in the risk management process as the law relating to privacy states the requirements of keeping the records of the risk management process safely. An occupational safety policy program is required for an organization because of the preparation of the safety statement needed by the law of the safety(HSA, 2016). Policies of Hospitality which offers Guidance to Risk Management Process Sofitel Noosa pacific resort of Australia follows the management approach set by the Accor group. Some of these approaches have been discussed below: Responsibilities Main people who are responsible for risk management process in Sofitel Noosa pacific resort are: Manager of the Project: He is the person who is considered as in-charge of the project. He holds absolute responsibility of management of the cost and contingency scheduling along with the threshold of the project. Manger for risk Management: This person possesses the powers of implementing risk management process and thereby ensuring the same for meeting the intents of the orders. He is also responsible to work on risk management with the risk and quality experts. Overview of Context At present, the Sofitel Noosa pacific resort is undergoing infrastructure development for developing a new modernized kitchen building. There is requirement for this building to have separate space for employees working in kitchen and also it required various kitchen accessories. For gaining success in this infrastructure development, there is a need to implement risk management process. Identification and analysis Scope This particular infrastructure development project aims to find such practices, which could be incorporated as the best practices for effective kitchen development. The main objective is to have a perfect infrastructure without any extra cost. Further, as per the analysis, it is clear that there is requirement of implementing a risk management process, which can be evaluated in a continuous manner for managing and minimizing the consequences of adverse events (SLAC, 2009). Further, with implementation of risk management process there shall be elevated chances to increase the probability of the success of the project (SLAC, 2009) Risk Management process Planning for Risk: Before starting with the process of handling the risks associated with the project, risk manager should evaluate proposed activities for determining the potentials of the associated risks. The process of evaluation focuses on the environment, security and designing areas (SLAC, 2009). Identification of the risk factors: Risks associated with the scope of the project must be identified in advance. Assessment of the Risks Associated with the project: After the identification of the risks associated with the project, its assessment will be done for analyzing the likelihood of the cost, schedule and work process of the project. Handling: In this step, strategies for handling the risks associated with the project are determined so as to eliminate, transfer or mitigate the risk. Impact: Impact that can be created due to is assessed in this step. Further, risk handling strategy is determined for eliminating, transferring or mitigating the risk. Tracking: In this particular step, data associated with the risk factor is determined and kept in a well documented manner (SLAC, 2009). Identification of the Risk and its Assessment Identification of the Risk: The process of determination of the risk factors involves a methodological process for ensuring that the list of the risk identified has been made in a comprehensive manner. In this step, a manager is appointed with the process of risk management along with a team which is responsible for handling all the activities in the project management (SLAC, 2009). Areas of Risk Significance of Risks Facilities Equipment development Ineffective planning for long lead items Design Inclination towards Technology Not Cost effective Requirements No operation requirements are established No stability Testing Planning for the required tests is not initiated in the program Testing does not address the effects of operations Schedule Funding is not sufficient Scheduling is not showing realistic acquisition Capabilities of supplier Restriction on vendors Cost Objectives for costs are not developed at early age Technology Not shown in required operations Management Strategy of acquisition fails in offering the considerations for varied elements Such teams generally use graded approach for evaluation of the risk and the subsystems that exceeds 100k dollar are considered to be on the mark of critical path (SLAC, 2009). Categories of Risk Following categories have been defined for the risks associated (SLAC, 2009): Category Of Management Configuration Process Interfacing Management Procurement Process Category of technicality Functional requirement design Complexity design Equipment design Category of Environment Control regulations Safeguarding Scheduling Costing Quantification of the Risks Risk is assessed by analyzing the probability of the occurrence and its consequences (Institute, 2010): Technical Consequences In cases when risks occurs- 0 level: No Impact 1 Level: Low Amount of Impact 2 Level: Moderate Amount of Impact 3 Level: High Amount of Impact Schedule Consequences In cases when risks occurs- 0 Level: Low Amount of Delay of up to 1 month 1 Level: Low Amount of Delay of up to 2 month 2 Level: Potential Amount of Delay of up to 3 month 3 Level: High Amount of Delay of more than 3 month Overall Consequence level Areas of Risk No Impact Low Impact Moderate Impact High Impact Technical Area Negligible Low degradation Moderate Degradation Technical system's performance is useless for maintaining the physical objective Scheduling Area Negligible Milestone delay by 1 month Milestone delay by 3 month Milestone delay by more than 3 month Costing area Less than 10K dollar less than equal to 100 K dollar Less than equal to 500 K dollar More than 500 K dollar Impact Management of Risk and Control Actions Handling of Risk The processes of risk handling are utilized for determining risks and implementing actions for reduction of likelihood of materialization of risks and thereafter eliminating the consequences of the project risks (Watt, 2012). There are four strategies for managing risks (Watt, 2012): Avoidance of Risk Transfer of Risk Reduction of Risk Acceptance of Risk Team appointed for risk management will be held responsible for handling the impact of the risks associated. Control actions will be specified for every risk identified based on the management strategy selected (Canterbury, 2016). The actions and strategies selected for risk handling are better tracked and registered in effective manner (Government, 6 Steps to risk management, 2012). Methods For Management Objectives Characteristics Avoidance of the risk Risk elimination is to be placed by changing the parameters related with the project There is a probability that the plan for elimination of risk might change because of this fact In this step it is identified that lower risk is a better choice Transfer of Risk Factors of risk remain viable, but are majorly shifted to another project Partial shifting is considered in case full transfer of risk is not possible Mitigation of Risk In this step likelihood of the risk is decreased Most Common form for managing risk Assumption Risks are determined No means for mitigating or controlling Analyzing the Impact of Risk There are two ways in which the risks associated with the project impacts (Protiviti, 2011) : Management of Strategy Implementation: In this particular case with the use of the strategies of risk mitigation, manager is able to handle the risk associated with project. Probabilities of cost and scheduling impacts the implementation of such mitigation strategies Residual Risk: After implementing the risk management strategies, there is high probability of adverse impact. At this time, contingency management is the step, which is to be taken necessarily by the risk managers. In the process of contingency management, impact of cost and schedule plays an effective role. Abatement Managers responsible for risk management will have to draw adequate strategies for risk abatement. This is mainly needed for mitigating the risk factors. During this elicitation process, the managers of the Accor firm will be able to analyze the strategies for abatement of every single risk. Information will be collected for completing the process of abatement on time. Apart from this, the manager will also be required to track the project at regular time intervals for scheduling the changes (berg Bayer, 2012). Categories of Project risk Impact High Impact Moderate Impact Low Impact Cost factor Monitoring of Cost Monitoring of Cost Monitoring of Cost and Scheduling Obtaining estimates for cost Obtaining estimates for cost Value management Schedule Increasing the lead timing for starting the process of procurement 6 weeks early Increasing the lead timing for starting the process of procurement 2 weeks early Monitoring of Cost and Scheduling Visiting vendor Visiting vendor Performance Redesigning Moderate Redesigning Quant Testing Evaluation of Alternatives Quant Testing Quant Testing Impact Determination by Cost and Schedule For the impact determination, software of crystal ball will be utilized. This software will help in modeling the probability simulation for analyzing the most likely factors of risk expenditure and delay in schedule. Simulation ranges will be used in this model (NSW, 2001) Tracking of Risk Registry The registry process in risk management plan for this particular project will be undergoing the task of monitoring and tracking the status of the risks that are associated with the project. Apart from the risk, the probabilities and consequences will also be analyzed (SLAC, 2009). Manger for risk management will be responsible for assessment of the risks that has been identified. He will also be taking care of the re-evaluation of the project for the task of upgrading risk assessment. The manger will be liable for maintaining the risk registry for ensuring that team assigned for the infrastructure development of Accor hotel I Australia monitors and reassesses the risk in regular manner. Documentation Every risk which has been assessed will require to be documented in the form of worksheet for further usage. Consequences and the probabilities attached with the risk factors will also be attached. 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