Case Study 3: MacDonald’s Risks Analysis
Risk is defined as the uncertain outcome of an activity which can result in the addition or decrease in value. According to Torabi, Giahi, and Sahebjamnia (2016), risk occurs as a result of the different mitigation factors that when engaged with the activity lead to failure or success in other words, the decrease of value. Engagement of activity expecting success is classified as a risk because the resultant effect of the activity can be success or failure. The decision to act on risks should consider that the result can be either a success of a failure.
Risk assessment involves the processes and methods of determining risks and hazards which can result in potential harm and other negative impacts on an organization. MacDonald’s is an organization with optimum effectiveness and efficiency in conducting a risk analysis. MacDonald’s operations and activities are influenced by different mitigating factors that influence the success and failure of the American fast food business/restaurants. The operations of the franchise engage with different mitigating factors such as different jurisdictions and different prevailing forces of demand and supply.
A company must consider its strategic plan to result in success or failure according to an execution risk plan. The profitability of the company is also dependent on the execution risk plan which determines the profitability of each brand in the business. A business faces different risk levels which depends on the engagement of different operations to determine whether the result is success or failure. MacDonald’s profitability is dependent on the execution of the strategic plans which include pricing and promotion plan on sales and margins, the impact of marketing and employee motivation plan that influences the perception of the customers as well as menu changes that attract customers. As Shedden et al. (2016) indicates, uncertainty is the result of engaging in the different strategic plans within the business risk analysis and mitigation, which determines success and failure.
Risk assessment involves risk identification, understanding the owners of risks, and criteria for risk assessment. According to Shedden et al. (2016), risk assessment aims at identifying the risks, the source of the risk, and the potential mitigation actions for the risk to an acceptable level for business continuity. The most intensive process involves the identification of all risks from all the systems of an organization, under people and processes involved in the organization. It is important to identify the various security aspects involving the environment and physical and technical factors. The risk assessment should include security management tools designed for the identification and tracking of the security risks and provision of appropriate corrective measures.
Risk identification requires that the vulnerabilities, threats, and assets be identified in good time based on the operations of the organization. It is essential to identify the owner of the risks. The risk owner is the person or department with the authority and accountability for risk management within their jurisdiction. The risk owner should use his power to resolves the identified risks (Torabi, Giahi, and Sahebjamnia, 2016). Risk assessment also requires the engagement of competent individual and team effort with a better understanding and knowledge about the risk. The risk identification is required before any new activities and processes are involved in the existing processes. Risk assessment involves evaluating existing activities and processes through the use of new tools concerned with risks. The identification of the location and frequency of risk is essential in the process of risk mitigation and help in the employment of the appropriate risk mitigation measures.
References
Shedden, P., Ahmad, A., Smith, W., Tscherning, H., & Scheepers, R. (2016). Asset identification in information security risk assessment: A business practice approach. Communications of the Association for Information Systems, 39(1), 15.
Torabi, S. A., Giahi, R., & Sahebjamnia, N. (2016). An enhanced risk assessment framework for business continuity management systems. Safety science, 89, 201-218.
