Understanding Risk Management in Modern Business Operations

Question:

Discuss about the Building and Sustainability for Australian Stock Exchange.

The main purpose of the assignment is to conduct a study on a company named as Wesfarmers Limited that is based in Australia and listed in Australian Stock Exchange (Wesfarmers.com.au. 2017). The present segment elucidates on understanding whether Wesfarmers Limited are prepared to take risks and prone to innovation and change management in their business operations. The current segment properly explains about the concept of risk and how it should be managed in an effective way in the business operations in the recent competitive world. The Management of Wesfarmers Limited has reported lines of authorizes and responsibilities that takes into account guidelines as well as limits for getting approval for all the expenditures that include capital expenditures, contractual commitments and investments at the same time (Westland 2016).

Wesfarmers Limited is prepared to take risks for attainment of future goals and objectives. The company is committed towards identifying, monitoring as well as managing material business risk that links with the business activities. Wesfarmers Limited has adopted management framework as well as reporting systems that has wide range of risk management controls (Sullivan and Gouldson 2017).

Risk cannot be avoided completely but strategies can be taken by the management to minimize the risk as far as possible. Managing Director of Wesfarmers Limited is of the opinion that innovation is the cornerstone in their business operations. The company encourages as well as support innovation as it is critical to the business and they have received innovation awards for recognizing people and teams for practical realization of implementing new ideas, methods or devices as it improves final business outcomes (Rowe et al. 2014). Changes adopted by Wesfarmers Limited will help in streamlining the reporting as well as decision-making structure.

The management of Wesfarmers Limited believes in positivity while dealing with business operations (Nobes and Stadler 2015). The constant growth as well as expansion of the business works into diverse sectors of company supply chains that have marked Wesfarmers Limited as a model for enterprises in and across the world. It was quoted by industry analysts that Wesfarmers Limited has proven to be so successful in their operations and it is the secret behind the company’s financial success (West and Bogers 2014). The company had demonstrated its innovative supply expertise as they have introduced Blackwood’s sector for standing as a single source supplier for all inventory related activities. The management team of Wesfarmers Limited is continuously developing excellence in its ability for staying one-step ahead of the evolution in the retail industry. The company embraces business to business as well as internal ordering solutions for meeting the needs of long-term demands of both clients and partners (Murray 2014).

Wesfarmers Limited’s Risk Management Framework

The new products and services developed by Wesfarmers Limited are properly advertized so that people are aware of the new offerings. Transparent communication should be used within the business where employees are free to express their views and opinions to the immediate senior management. Grievance addresal is other way to listen to the problem of the employees and making ways to solve it as far as possible (Murray 2013).

Any change and innovation activity is risky but organization should plan for minimizing the risk as far as possible (Klettner, Clarke and Boersma 2014). Change is not predictable and can be either good or bad for the company but efforts need to be made to plan for innovation. It is proven that Wesfarmers Limited deliver improved business performance as well as lead change through building great teams within the business operations. The company had been grounded by rich culture as well as focus mainly on sustainable shareholder returns. The Managing Director of Wesfarmers Limited was proud in announcing that the company is looking forward for building on the attainment of his predecessors. The main approach of the company is to provide teams to innovate as well as develop world class business. It is all about building high performing teams as well as maintaining regimented approach for capital allocation in the upcoming financial year (Kilroy and Schneider 2017).

It is known that creativity as well as innovation helps in fueling new products as well as services and even the strategies (Klettner, Clarke and Boersma 2014). The frontline managers encourage employees who are working for the company in order to contribute for any new innovative ideas. The frontline manager needs to give employees a reason to care to undertake decisions as well as taking actions. From the viewpoint of employees, it encourages them to contribution for innovation practices. It is important to identify most of the significant differences between Chief Executives as well as employees. The frontline managers need to agree on clear targets, encouraging and support innovation as well as giving appropriate autonomy and recognizing contributions. It is important for the frontline managers to undertake risks and taking no-blame approach in the most appropriate way (Hubbard, Rice and Galvin 2014).

Creativity and innovation are two components that are mostly adopted by organization at rapid pace (Holden, Linnerud and Banister 2017). Companies are making an effort to constantly look for talent. This can be done by hiring talented people as it is one of the steps for cultivating an innovative as well as creative environment. It is important to understand the fact that building a workforce where there is constant exchange of idea that takes into account finding the right formula for the given company and their culture. Creativity cannot be forced by any chance but the right to putting the team in the right frame of time help in finding imaginative solutions in the most appropriate way (Klettner, Clarke and Boersma 2014).

Wesfarmers Limited’s Approach towards Innovation and Change Management

There is no barrier to innovation takes place at Wesfarmers Limited as the company is always ready to develop longer as well as deeper relationships with the suppliers. By this action, suppliers are encouraged to invest in the business and his result in giving proper opportunity for collaboration or emphasis upon quality as well as efficiencies and product innovation (Griggs et al.2013).

The leader is the person who is followed by the team members for the good deeds (Goffin and Mitchell 2016). As a leader in the business, it is essential to convey the right message to the employees, customers as well as business partners so that there is no confusion at all. It is expected from the staff members and the people that the leaders will lead the team in an effective way at workplace. A leader should know to share the credit as it is known that they cannot succeed by working alone forever. It is because of collaboration as it the key to success. The leader should distribute the credit as well as praise employees for their hard work. It is important for a leader to listen to people and become a better listener. They should be patient and listen to each of the fact pointed out by the employees (Klettner, Clarke and Boersma 2014).

Training should be provided to the employees to develop sense of creativity as well as innovation and leadership capabilities (Gitman, Juchau and Flanagan 2015). Innovation is the main key where the future success can be judged for the company as well as global race for the innovation is getting intense at the same time. Innovation workshop conducted for the employees need to be inspiring as well as engaging because it will guide the employees to learn various skills to discover the possible power of minds and show how to lead the product innovation for attainment of future goals and objectives, Nowadays, company struggle very hard to bring together creativity as well as business insights. There are various well thought out as well as field tested ways where it help in thinking more about the aspect in a creative and visual ways. These actions will guide companies where it is imagined that the business points out that customers demand to be met in new ways (Klettner, Clarke and Boersma 2014).

It is essential for the managers to evaluate their own approaches for consistency with the wider organizational or project context (Damanpour et al. 2014). The adopted approach by the managers need to be consistent by nature as it help in maintaining strategy as well as evaluation in the most appropriate way. The objectives of the innovation need to be specific that links from the perspective of wider organizational context. Regular evaluation of approaches can be done by the managers by talking to all the shareholders and figuring out what should be the outcome of each of the experts for given span of time. It is important for the manager to identify how the outcomes need to be aligned with the organization business strategy in an effective way (Klettner, Clarke and Boersma 2014).

Importance of Training Employees for Creativity and Innovation

Wesfarmers strive best to reduce the emissions intensity in the business by bringing improvement in their resilience to climatic change (Biddle 2016). By using this, historical environmental performance can be managed and align with the innovation activities and support innovation at the same time. Wesfarmers Limited is proactive towards managing risks that is associated to align with the climate change. This is because of the reason why delivering significant benefits is necessary be it economic, social and environmental and economic. The company even acknowledges change management and affects it had on the customers, economy as well as operations and the community it operates in (Akbar and Ahsan 2014).

The Risk Management Framework of Wesfarmers Limited had been reviewed by the Board on annual basis as well as was approved in the year 2017. In this given framework, details had been provided that has overarching risk management controls that take into account risk management process as well as procedures and reporting systems. In this legislative framework, it properly explain about the code of conduct, a formal corporate planning process, group policies and procedures for managing the financial risk and treasury operations like exposure to foreign currencies as well as interest rate movements (Beech and MacIntosh 2017).  

Conclusion

From the above analysis, it is noted that Wesfarmers Limited is prepared to take risks and changes in positive ways where efforts are taken by the management for constant improvement in ideas and innovative activities in the business operations. Innovation is prevalent at Wesfarmers Limited and even constant evaluation had been done on annual basis by the Board in case any changes are needed for a given period of time. The management of Wesfarmers Limited had planned out a formal corporate process that need every division for assessing the trends that are likely to affect as well as shape the industry for performing scenario planning and preparation of SWOT analysis that brings out the strengths, weakness, opportunities and threats. The group policies of the company brings out the financial risk and treasury operations that takes into account exposures to foreign currencies as well as interest rate movement.

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