Identify the internal and external context for risk management
Introduction: in the October of 2015, MacVille has started a relationship with a small village that grows coffee beans called Papua New Guinea (PNG). The business will provide equipment and high-level skilled training to the village in exchange for cheaper roast beans.
Internal context:
MacVille is an Australian coffee supply business. It imports and supplies top quality coffee for cafes and restaurants. Their vision is “Within five years, MacVille intends to have established itself as the number one coffee supplier for fine coffee shops and restaurants in Australia.”
The business has strategic directions to achieve its vision. MacVille also has Risk Management Policy and Procedure, which shows what to do to reduce level of risk, how to do it and who has responsibility. The business has Risk Management Process follows Risk Management Process Australia standard.
External context: * Legislations: Macville follows legislation, standards and codes of practice as Work Health and Safety Act 2011(Qld), Australian Securities and Investments Commission Act 2001(Cwlth), Corporations Act 2001(Cwlth). PNG has developed a new OSH legislation, a new OSH framework, a new OHS structure that is economically driven. In April 2011, the Governments of Fiji and Papua New Guinea introduce a new program that was intended to improve the standards and practices on the workplace. * Economic environment in PNG: PNG’s economic is growing with expanding employment opportunities and strong growth in government expenditure and revenues. Its performance has been driven by high international prices for PNG’s exports. A study shows that 40% of the population is poor. Around 80% to 85% their livelihoods are from subsistence gardens. However, Australia is working with the PNG government to support the establishment of a wealth fund to assist with sharing economic gains of PNG’s resource sector with the people of PNG. * Agriculture: PNG is facing many challenges to agriculture development such as poor infrastructure, weak market signals and services, threats from new pest and disease, poor quality of products. * Political system: At general elections there has been a high turnover of parliamentarians. But in the 2012 elections, it was almost 60% of sitting members re-elected. It seems the political system is becoming more stable. * Weather: PNG has hot tropical climate at sea level. Cooling cause of climatic various from one area to another. The most of rain falls between December and March. * Language: PNG has over 800 known languages. English, Tok Pisin and Hiri Motu are the official languages.

MacVille Risks
Risk management tools and techniques are the things and ideas which MacVille could use to identify the potential and harmful risk coming into their company. MacVille could identify, evaluate, reduce or remove the risk by doing risk analysis, so they can reduce the impact on their organization. There are many types of risk management tools which MacVille could use to identify the risk. 1. By doing a SWOT analysis, a diagram, which indicates potential risk and opportunities that MacVille have. 2. Checklist is a step by step guide to Show MacVille whether they have complete everything correctly and on time. 3. Research can be done to find the risk on MacVille
SWOT analysis for MacVille

Strength 1. Loyal, expert & motivated staff 2. Modern technology (in-house equipment) 3. Have tightly knit network of suppliers 4. A good business reputation 5. Successful Fair Trade practices | Weakness 1. Communication barriers 2. Poor management ad training 3. Work health and safety legislation problem’s 4. Consumer trending 5. Economic downturns affecting business 6. With the new venture delivery problems occur | Opportunities 1. Opportunity to introduce the products to other nations 2. To gain a niche market and higher demand 3. By being no 1 can get many contracts with leading coffee shops like Starbucks 4. Gain customers due to new venture with PNG | Threats 1. Increase competitors in the market 2. Sales will reduce on economic down turns 3. Political effects on new venture 4. New technology development 5. Risk of leaking of intellectual property with the new venture 6. Poor quality products |

Checklist

Area of uncertainty | Description | Checked | Economic and political | Difference between PNG political and economic conditions. Doing a survey before the venture | ✓ | Regulation and approvals | Regulation on PNG will be different than Australia and process of approving things may completely different and may take time | ✓ | Financial, commercial and cost | Identify the gap between production expense in Queensland and potential cost in PNG. | ✓ | Environment | Checking about weather conditions, land, insects, temperature, wind… | ✓ | Organizational and human | Find organizations in PNG is working in agriculture area and people who are potential employees. | ✓ |