Complete attached tasks as per australian building and construction processes
ASSESSMENT TASK RISK MANAGEMENT Refer to attached material as a Guide Business Study You run your own medium size organisation set up as a Company structure with your own office premises external to your home. The organisation employs: three (3) site supervisors; two (2) foreman; two (2) carpenters; two (2) labourers; one (1) estimator; two (2) admin staff and you as the owner are the construction manager. The organisation constructs in any one (1) year: ▪ 6 x 3 bedroom up market cottages – cost valued at $350 000 each ▪ 3 x renovations – cost valued at $120 000 – $200 000 each ▪ 5 x shed/warehouse (maximum size 2000m²) – cost valued at $80 000 - $100 000 each ▪ A group of 6/3 bedroom units/villas as a development block. Remember you are the builder and hence you are responsible for everything that happens on your sites. Do not consider yourself as a subcontractor or employee. You must prepare this task based on the fact that you own the business. “The buck stops with you”! This task will assist you to prepare your contracts and all the necessary documents that is required for any size project. THE PROJECT Hypothetical Multi storey complex refurbishment 3 Storey Building with Basement Carpark: Basement Carpark – currently flooded each time it rains. Ground floor of office fitout to be converted to specialty shops. Remaining floors of office fitouts to be converted to apartments. Rear Carpark currently full of rubbish, access to rear carpark only through front of building off main street. Existing concrete tiled staircase to all floors. The views from this building are quite spectacular. This is an existing building in a derelict state, which was built in the 1970’s and has been vandalised. All the windows on front and rear are smashed. Each floor has been vandalised by squatters, vagrants etc. As a result of the smashed windows the pigeons and other bird life have desecrated the whole building. The property survived an earthquake in 1989, the internal was only slightly damaged and the foundations were slightly damaged. The property escaped a demolition order but the true damage to the foundations is unknown. It appears to be structurally sound. The property is located on a busy city street. The front of the building faces north over the harbour and the rear of the building faces south with commercial buildings and a new car dealership directly behind it with heritage buildings and a Cathedral behind to the south east. ASSUME THE BUILDING WILL REMAIN AT 3 STOREYS AND BE REFURBISHED THE PROJECT IS SEPARATED INTO STAGES To refurbish this building the following needs to be considered. 1. Interior Fit out of second and third floor of residential apartments. Including the demolition and removal of rubbish from interior. 2. Internal Fitout of Commercial Shops & Offices on ground floor including demolition and removal of rubbish from interior. 3. Dewater and refurbishment of Basement Carpark and Outside Rear Carpark installation. 4. Exterior, Windows, Cladding, Roofing, Awnings etc. 5. Commercial fitout of Air-conditioning, Fire escapes, security systems, sprinkler and smoke alarms. Set out a policy and procedure in relation to the PROJECT’S Risk Management. – This is not to only involve Safety Risk. You must consider the Risks surrounding the WHOLE PROJECT from inception of the project to completion. Encompass the following areas: 1. Risk Identification at all stages of the project 2. Risks Quantification at all stages of the project 3. Risk Response at all stages of the project 4. Risk Monitoring and Control at all stages of the project Provide copies of relevant forms, documents and/or checklists to support each of the above sections. RISK MANAGEMENT RISK MANAGEMENT After 5 years of development, the Risk Management Standard, AS/NZS 4360:2004 was been superseded by AS/NZS ISO 31000:2009, Risk management - Principles and guidelines. AS/NZS ISO 31000:2009 can help you achieve: • organisational resilience; • proactive management; • stakeholder confidence and trust; • reliable decision making and planning; and • more certainty in today's market conditions. AS/NZS ISO 31000:2009 vs AS/NZS 4360:2004 Elements of Risk Management Standards How AS/NZS ISO 31000 builds upon AS/NZS 4360:2004 Application of framework for risk management Expands the framework and further develops the 2004 framework Principles for managing risk Far more clear and explicit Enhanced risk management attributes New addition included in the Annex Guide to establishing and implementing effective risk management process New addition included in the Annex compared with previously supplied in HB 436:2004 Risk management context Also applicable across all industries to any entity implementing organizational objectives which may involve uncertain outcomes Source: Standards Australia From Wikipedia, the Free Encyclopaedia DEFINITION OF RISK MANAGEMENT Risk management is the identification, assessment, and prioritisation of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimise, monitor, and control the probability and/or impact of unfortunate events or to maximise the realisation of opportunities. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attacks from an adversary. http://infostore.saiglobal.com/store/Details.aspx?ProductID=1378670 http://infostore.saiglobal.com/store/Details.aspx?ProductID=1378670 http://infostore.saiglobal.com/store/Details.aspx?ProductID=1378670 http://infostore.saiglobal.com/store/Details.aspx?ProductID=1378670 Several risk management standards have been developed by several organisations, including the Project Management Institute, the National Institute of Science and Technology, actuarial societies, and ISO standards. Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management, security, engineering, industrial processes, financial portfolios, actuarial assessments, or public health and safety. The strategies to manage risk include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk. Certain aspects of many of the risk management standards have come under criticism for having no measurable improvement on risk even though the confidence in estimates and decisions increase. PRINCIPLES OF RISK MANAGEMENT This section provides an introduction to the principles of risk management. The vocabulary of risk management is defined in ISO Guide 73, "Risk management. Vocabulary." In ideal risk management, a prioritisation process is followed whereby the risks with the greatest loss and the greatest probability of occurring are handled first, and risks with lower probability of occurrence and lower loss are handled in descending order. In practice the process can be very difficult, and balancing between risks with a high probability of occurrence but lower loss versus a risk with high loss but lower probability of occurrence can often be mishandled. Intangible risk management identifies a new type of a risk that has a 100% probability of occurring but is ignored by the organisation due to a lack of identification ability. ▪ For example, when deficient knowledge is applied to a situation, a Knowledge Risk materialises. ▪ Relationship Risk appears when ineffective collaboration occurs. ▪ Process-Engagement Risk may be an issue when ineffective operational procedures are applied. These risks directly reduce the productivity of knowledge workers, decrease cost effectiveness, profitability, service, quality, reputation, brand value, and earnings quality. Intangible Risk Management allows risk management to create immediate value from the identification and reduction of risks that reduce productivity. Risk management also faces difficulties in allocating resources. This is the idea of opportunity cost. Resources spent on risk management could have been spent on more profitable activities. Again, ideal risk management minimises spending and minimises the negative effects of risks. Method For the most part, these methods consist of the following elements, performed, more or less, in the following order. 1. Identify, characterise, and assess threats. 2. Assess the vulnerability of critical assets to specific threats. 3. Determine the risk (i.e. the expected consequences of specific types of attacks on specific assets). 4. Identify ways to reduce those risks. 5. Prioritise risk reduction measures based on a strategy. Principles of Risk Management The International Organization for Standardisation (ISO) identifies the following principles of risk management. Risk management should: ▪ Create value. ▪ Be an integral part of organizational processes. ▪ Be part of decision making. ▪ Explicitly address uncertainty. ▪ Be systematic and structured. ▪ Be based on the best available information. ▪ Be tailored. ▪ Take into account human factors. ▪ Be transparent and inclusive. ▪ Be dynamic, iterative and responsive to change. ▪ Be capable of continual improvement and enhancement. Process According to the standard ISO 31000 "Risk management -- Principles and guidelines on implementation, "the process of risk management consists of several steps as follows. Establishing the context Establishing the context involves: 1. Identification of risk in a selected domain of interest. 2. Planning the remainder of the process. 3. Mapping out the following: ▪ The social scope of risk management. ▪ The identity and objectives of stakeholders. ▪ The basis upon which risks will be evaluated, constraints. 4. Defining a framework for the activity and an agenda for identification. 5. Developing an analysis of risks involved in the process. 6. Mitigation or Solution of risks using available technological, human and organisational resources. Identification After establishing the context, the next step in the process of managing risk is to identify potential risks. Risks are about events that, when triggered, cause problems. Hence, risk identification can start with the source of problems, or with the problem itself. ▪ Source Analysis - Risk sources may be internal or external to the system that is the target of risk management. Examples of risk sources are: stakeholders of a project, employees of a company