Management Accounting

Introduction

1. Risk facing by Nando’s

Environmental risk

• Environmental risk has become more popular among business today because every business that they do, some of them might affect the environment such as air pollution and water pollution. These issues affect business because laws require businesses to change equipment and procedures to meet imposed standards, which costs businesses money. As for Nando’s, this issue is a slightly risk because they are not using so much material that will harm the environment. Of course they are still a waste from Nando’s because in order to make things, they are still use raw materials to put together in their foods. For example, they still using cooking oil to cook their chips and wedges. In fact, cooking oil still can harm the environment if they throw the cooking oil in the drain or river nearby. If Nando’s really concern about the environment, they need to think the way to make sure their cooking oil will not harm the environment or else Dato Karam Singh Walia will appear.

Compliance risk

Operational risk

• This risk is related to delivery foods to their customer. This is because Nando’s offer a delivery service to their customer which mean for those want to save time and dislike to hang out at restaurant or dine in. So the risk that would likely to happen in Nando’s operation is delay delivery that caused by broken motorcycle in the middle of delivery or non-efficient motorcycle that take a longer time to deliver the product. This could give a negative feedback to Nando’s from their customer as delivery is delayed that will make the product less fresh because the freshness of product are not durable. However Nando’s are very concern about the high quality and freshness of their product to satisfy their customer.

Economic risk

• This issue always occur in every business. The understaffing issue will limit the ability to serve customer in Nando’s restaurant and other. This problem are common for every business but in the long run it may affect directly to Nando’s in terms of profitability or business’s growth and negative impact. The quality of the product and service also suffer as there are only a few staff to handle a bundle of work burden. This fewer employee also need to work in a faster pace to handle all the workload that will lead to significant error in serving the customer. Poor quality service and product would drive away customer and diminishes Nando’s reputation. Nando’s must take a preliminary action to avoid this matter from happen that would give a negative impact to them.

Technology risk

1. Advisable to Nando’s

Environmental risk

• The possible ways to solve this risk is Nando’s can recyle their cooking oil by return back to the supplier itself. For example, Aliff’s cooking oil is the supplier to Nando’s and they will distribute to every outlets. As far as we know, the cooking oil cannot be used for a long time, so after the cooking oil cannot be used or not suitable anymore for cooking, they need to filter first and every outlet can fill back in the tank that Aliff’s cooking oil provided. So that, Aliff’s cooking oil will take the responsible in order to recycle back the cooking oil.

Compliance risk

Operational risk

• They have to take the control measure to mitigate this risk from happening that would give a bad reputation such as continuous maintenance of the motorcycle within the timeframe. The timeframe could be twice in a year to ensure the motorcycle are efficient in deliver the product to their customer on time to avoid customer complain. Then Nando’s need to provide some cost provision for maintenance to cover the expenses that will occur. Instead of doing the continuous maintenance of their transport Nando’s also can take some alternative to control measure the risk with trying or testing different packaging methods and materials. The aim is to ensure the product still fresh and warmth when customer receive the product regardless anything happen such as delay delivery. Nando’s can use insulated delivery bag which invented by Ingrid Kosar. This bag enable the product or food can keep the warmth for a longer period. This bag also used by Pizza Hut to delivered their pizza to the customer.

Economic risk

• One of the action that Nando’s can take is protect their employee welfare. This include items such as allowance, medical insurance, food and other to their employee. This is because with a good employee welfare the satisfaction of the employee would increase. In the same time, it will strengthen the employee’s loyalty to work with Nando’s. Thus it will decrease the staff turnover that will lead a serious issue such staff shortage. Other than that, Nando’s also can take an action to reduce the staff shortage issue from occur such join a career fair. This career fair is open for those unemployed, fresh graduated student, and companies. The event are held to give opportunities to the companies to recruit a new staff which will give benefit to Nando’s. Nando’s can easily recruit a new staff among the participant that need job if they shortage of their staff.

Technology risk

Conclusion

        In conclusion, there are many possible risk that can happened in any businesses today but as for Nando’s we identified that there are six possible risk that will likelihood to happen until consequences to happen such as environmental risk, compliance risk, operational risk (customer complaint), operational risk (delayed in delivery), economic risk and lastly is technology risk as explained in (a). We also identified several possible way to overcome these risk as explained in (b). Lastly, is there any problem, there must be a ways to overcome.