Assessor Resource

SITXMGT005A
Manage business risk

Assessment tool

Version 1.0
Issue Date: March 2024


This unit describes a fundamental business management skill for those working within the service industries and applies to the full range of industry sectors and environments.

A risk to business operations can be faced by any type of organisation, including non-profit businesses, whether they are micro, small, medium or large. Managers within these businesses require skills to ensure the success of the operation, meet budget, minimise losses or ensure a profit, depending on the focus of the activities.

This unit reflects the active participation of any personnel in the identification, assessment and control of risks to business and operational activities. This activity would normally be undertaken by unsupervised senior staff members who have significant responsibility in the workplace, owner-operators and managers. It could also be undertaken by frontline operational personnel who work with some level of autonomy or under limited supervision and guidance from others.

Assessments of business risk are commonly conducted as a team effort and a person achieving competence in this unit could either actively participate in group assessments or could take a lead role in coordinating a group approach.

The assessment and control of risks to business operations could be implemented on many levels within an organisation; a whole of organisation approach or for a particular project or business activity.

This unit describes the performance outcomes, skills and knowledge required to actively identify risks to business operations, assess the associated consequences and take measures to eliminate or control the risk. It requires the ability to monitor business risks on an ongoing basis.

This unit focuses on business risk and not on the risk management strategies that a business applies to the management of OHS issues. OHS management practices are covered in separate specialised units.

You may want to include more information here about the target group and the purpose of the assessments (eg formative, summative, recognition)

Prerequisites

Nil


Employability Skills

The required outcomes described in this unit of competency contain applicable facets of employability skills. The Employability Skills Summary of the qualification in which this unit is packaged will assist in identifying employability skills requirements.




Evidence Required

List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, the range statement and the Assessment Guidelines for this Training Package.

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the following is essential:

project or work activities that show the candidate's ability to systematically identify risks to business operations, assess the associated consequences and take measures to control the risks for a given service industry operation

ability to develop or access and use business risk identification and assessment template

project or work activities conducted over a commercially realistic period of time so that the monitoring and evaluation aspects of business risk can be assessed.

Context of and specific resources for assessment

Assessment must ensure:

that the candidate has accessed a fully equipped office environment using appropriate computers, printers, communication technology, information programs and publications to facilitate the processes involved in managing business risk

access to an operation for which a business risk assessment can be undertaken, or to comprehensive and sufficient information about that operation to allow the candidate to participate fully and actively in risk management practices

use of risk management information or business management manuals issued by industry associations or commercial publishers, and template documents used for risk assessment activities

use of information sources that provide operational details on which to base business risk identification or assessment activity, such as business, marketing, operational or project plans

involvement of key people so that consultative actions may be implemented.

Methods of assessment

A range of assessment methods should be used to assess the practical skills and knowledge required to manage business risk. The following examples are appropriate for this unit:

evaluation of completed business risk identification and assessment template documents prepared by the candidate detailing suggested risk controls for a given project or work activity

evaluation of a portfolio that incorporates all documents used for the management of business risk for a business, project or event, including summary of reference material, completed risk identification and assessment template documents, documents detailing control measures, reports detailing success of control measures and recommendations for improvements, and notes or minutes from meetings and briefings

evaluation of project or work activities conducted in conjunction with an industry operator to allow the candidate to implement risk management practices for a particular business, event, project or business activity

direct observation of the candidate consulting with appropriate colleagues about business risk identification, assessments and control

case studies and problem-solving exercises to identify and assess business risks for different types of business or operational activities

written and oral questioning or interview to test knowledge of the risk management principles

review of portfolios of evidence and third-party workplace reports of on-the-job performance by the candidate.

Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example:

SITXADM003A Write business documents.

Assessing employability skills

Employability skills are integral to effective performance in the workplace and are broadly consistent across industry sectors. How these skills are applied varies between occupations and qualifications due to the different work functions and contexts.

Employability skills embedded in this unit should be assessed holistically with other relevant units that make up the skill set or qualification and in the context of the job role.


Submission Requirements

List each assessment task's title, type (eg project, observation/demonstration, essay, assingnment, checklist) and due date here

Assessment task 1: [title]      Due date:

(add new lines for each of the assessment tasks)


Assessment Tasks

Copy and paste from the following data to produce each assessment task. Write these in plain English and spell out how, when and where the task is to be carried out, under what conditions, and what resources are needed. Include guidelines about how well the candidate has to perform a task for it to be judged satisfactory.

This section describes the essential skills and knowledge and their level, required for this unit.

The following skills must be assessed as part of this unit:

ability to access appropriate risk identification or assessment templates

high-level communication skills to communicate and consult with key people on issues of business risk identification, assessment and control

literacy skills to read and interpret complex business management materials, such as business plans, marketing plans and reports that relate to managing business risks; and write risk identification, assessment and control documents

critical thinking skills to allow for a rational and logical evaluation of the business risk and to apply or suggest effective controls while incorporating the views of other people consulted.

The following knowledge must be assessed as part of this unit:

broad and working knowledge of risk management systems or practices

the way business risk management practices link with other management systems

context of risk assessment within the overall operation of the business or activity

key principles and elements of risk assessment processes

appropriate risk identification or assessment templates, and their format and use

range of techniques for assessing risks, such as the four-staged hierarchical process model

broad and working knowledge of industry and legal compliance requirements

broad and working knowledge of consultative mechanisms commonly used by organisations

common risk control measures

organisational activities and capabilities.

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording in the performance criteria is detailed below.

Operational objectives may include:

business or operational objectives relating to:

client of the organisation

department within an organisation

whole of the organisation

particular project

particular event or community activity

meeting budget

minimising losses

making a business profit

meeting project deadlines

staging an event or community activity successfully

successful project outcomes.

Key people may include:

colleagues, including:

peers

supervisors

managers

clients

contractors

participants and performers

venue and facility managers

industry association personnel

legal representatives

business accountants

insurance brokers

specialist or technical advisers

government authorities.

Informationsources may include:

business plans

operational plans

project plans

marketing plans

tender, proposal or bid documents

customer quotations

discussions with colleagues or clients

group workshops or brainstorming

incident reports

industry association reports and articles

media reports and articles

observation checklists

surveys.

A business risk identification tool or template document and assessment criteria may include:

self-designed tools and assessment criteria

tools and templates developed:

by external consultancy services

by industry associations for use by member businesses

by the organisation as part of a risk management system

for public use and found within business management manuals

assessment criteria nominated in Australian standards.

Methods to identify foreseeable risk may include:

audit of operational activity

interview and discussion

investigation of an incident with a negative result

monitoring of operational activity

observation of business, project or client activities

review of incident reports and registers

review of information sources, such as plans and reports

review of global or local reports and media discussions that identify critical economic, social, terror-related, war-related or health issues.

Clear documents that outline identified risks and documentation of the outcome of the assessment may include:

checklist

completed risk identification and assessment report or checklist, such as a tool or template document

comprehensive file notes

correspondence with customer, supplier or specialist adviser

report

meeting notes or minutes

action plan.

Risks may involve:

product failure

failure of marketing program

competitor activity

damage to property or equipment

system or equipment failure

financial loss

industrial dispute

inability to provide business or operational activity with appropriate human, financial or physical resources

natural disasters

political events

civil uprising

terrorism

world or local health events or epidemics

professional incompetence

non-compliance with industry or legal requirements

security breaches or failures

change of client or customer requirements.

Four-staged hierarchical process model must include:

identifying the consequences that could result from the identified risk

determining the exposure to the risk

estimating the probability that negative impacts will occur

determining an overall risk level for the identified issue, identifying risk level as:

low

accepted

medium

high.

Capability to eliminate or control risk may include:

access to accurate information

expertise within the organisation to determine and implement appropriate control measures

legal liability

financial or other resource constraints on implementing sufficient control measures.

Copy and paste from the following performance criteria to create an observation checklist for each task. When you have finished writing your assessment tool every one of these must have been addressed, preferably several times in a variety of contexts. To ensure this occurs download the assessment matrix for the unit; enter each assessment task as a column header and place check marks against each performance criteria that task addresses.

Observation Checklist

Tasks to be observed according to workplace/college/TAFE policy and procedures, relevant legislation and Codes of Practice Yes No Comments/feedback
Determine operational objectives through consultation with key people and by referring to available informationsources and use this as the basis for identifying, assessing and controlling risks to the organisation or activity. 
Develop or access a business risk identification and assessment tool or template document which incorporates assessment criteria for assessing risks and consequences. 
Use appropriate methods to identify foreseeable risk that has the potential to adversely affect operational activities. 
Ensure that risk assessment processes are a key component of all operational activities. 
Involve other people in the risk identification process and integrate the perspective of key people. 
Produce clear documents that outline identified risks to allow for a full assessment. 
Refer to identified and documented risks, consult with and involve key people to achieve broad input into the risk assessment process. 
Use a systematic and four-staged hierarchical process model to conduct the risk assessment. 
Use established assessment criteria for assessing risks and consequences. 
Prepare clear documentation of the outcome of risk assessment and proposed control actions. 
Assess the organisation's capability to eliminate or control risk and determine specific control measures. 
Develop and document contingency plans for risk elimination, minimisation or control and communicate these to key people involved in the operational activity. 
Implement control measures according to individual level of responsibility or refer to appropriate personnel for permission or further action. 
Eliminate risk where possible or take action to control and minimise the risk. 
Continuously monitor specific risks and controls to ensure effectiveness of control method. 
Regularly monitor low or accepted risks for any unacceptable consequences. 
Continuously monitor operational activities for a changing risk profile and identify, assess and control business risks on an ongoing basis. 
Make evaluation of specific risk controls a key component of all operational activity reviews. 
Consult with a range of key people to elicit feedback on the effectiveness of all risk management practices. 
Identify inadequacies in risk management practices, develop, implement, document and communicate improvements to risk management practices. 

Forms

Assessment Cover Sheet

SITXMGT005A - Manage business risk
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I declare that the assessment tasks submitted for this unit are my own work.

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Assessment Record Sheet

SITXMGT005A - Manage business risk

Student name:

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Assessment task 1: [title] Result: Competent Not yet competent

(add lines for each task)

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Overall assessment result: Competent Not yet competent

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