Bsbmgt517 Manage Operational Plan: Fonterra Assessment Answer


Task 1: Introduction

A business organization depends entirely on the management of operations, maintaining the quality of the operations and managing any impending risk factors working in the business process that might have a potential to derange the entire operations and business process (Maliket al., 2018). Therefore, it needs to be greatly taken care of when it comes to the operations management of any industry or organization. This report would thus contain an overview of the risk factors based on the policies adopted by the organization Fonterra for managing their operations and the level of severity of each of these risk factors on the business process of the organization.

Identification of risk based on the policies

Management policies of Fonterra

Fonterra is a dairy industry based organization. About the operational management of the entire organization there is a noticeable advantage in the entire business process system that that an organization is practically involved in every part of policy making. Following would be an analysis on all the policies adopted by the organization of Fonterra and how the company has fallen to out of identifying the risk based on these policies. Father would be an identification of risk based on the policies to identify the severity of the risk in later half of the report.

Environmental Policy

The environmental policy of Fonterra deals with the collection of milk from natural resources making sure that they do not have any hazardous or harmful substance engrossed within it. The policies to work closely with the farmers to ensure that there is no negative impact within the operation on the environment. The tree the farmers as a suppliers as well as the shareholders and ensure that the collection of made from natural resources are also expanded to ensure that less energy emission is used from the manufacturing of the plants.

Risk Associated with Environmental Policy

The primary risk that has a possibility to occur in the retaliation of environmental policy is the deposition of solid waste. There is a huge possibility that the use of various resources for the collection of the dairy products from the farmers has a huge amount of solid waste as a byproduct. This can be described with a statistics as below:

Figure 1: Solid Waste Statistics

(Source: Created by the Author)

Taking the solid waste statistics into consideration, it can be said that the organic waste has the most contribution in the environment which needs to be taken care of or it would create a huge problem for the environment which the organization is initially trying to curb with their Environmental Policy.

Diversity and Inclusion Policy

Employing the devotion and inclusion policy within the business operation system of Fonterra, the organization keeps in mind that there is no unexplainable pay gaps between the male and female workers investing that time and efforts for a similar kind of job. This is implanted in the operational policy in the organization for the ways to workers regardless of the business in which they are employed.

Risk in Diversity and Inclusion Policy

As per the statistics in New Zealand, it can be said that the existing gender gap in New Zealand has a huge impact in the country and increasing the basic pay would increase the unrest. It is also noted that across the five biggest working areas the proportion in which the females are being paid are somewhat higher than the basic pay of a male worker which implies that a female worker is paid a bit higher than the male workers. Within the local farmers and workers it can be a point of MS judgment where the female workers are paid a bit higher. Therefore it can be an impending problem within the workers causing unrest with this issue that the women workers are being paid higher than the men although they have almost similar kinds of jobs to offer the organization. The statistics in the past few years in New Zealand according to the pay gap problem for genders can be displayed as below:

Figure 2: Gender Pay Gap problem in New Zealand

(Source: Qian & Olsen, 2018)

Ethical Behavior Policy

The organization of Fonterra has a very strict policy regarding ethical behavior it disregards all the impending probability of corruption, gifts in business and conflict of interest situations and entertainment. The Board Charter of Fonterra has a set of code of ethics that includes these three factors and the research and development team walk on the general policies of the organization.

Risk in Ethical Behavior Policy

The risk that can occur in this case is the advantage of the intrinsic trust resulting to Asset Misappropriation in regards to the Ethical Behavior Policy. In case of a business, these factors form a huge risk since this cleans the natural honesty and integrity of worker within the organization. For Fonterra, the honesty and integrity culture within the organization is essential because the product it delivers to its customers is there in nutrition sources. If any kind of man handling of the product occurs due to the ethical behavior of workers in the organization, all the customers would be affected by it tarnishing the reputation of the entire organization eventually.

Figure 3: Statistics for Asset Misappropriation in New Zealand

(Source: Qian & Olsen, 2018)


In conclusion it can be said that the operational policies that the organization of Fonterra utilizes has scopes of risk but mostly it offers as an advantage to the business operations. The organization has been doing pretty well with the planned organizational structure and the implemented policies and this has been found out with a thorough analysis done on three of the organizational policies adopted.

Task 2

Analysis on the probability and potential impact of operational risks on Fonterra’s operational objectives

The objectives that the organization of Fonterra has put forward for their customers and for the internal operations of the organization as well, clearly states that the organization only believes in delivering the best products to the customers with the help of refreshing the internal operation of the organization (Qian & Olsen, 2018). The probability of operational risk within the organization with regards to the policies adopted by the company is considered very low as per the analysis but there are few risk factors present. This will be assessed as per a risk log in the latter half of the report.

Risk Assessment Log

Risk Factors

Impact on the Operation Policies


Solid Waste

This would impact greatly about the environmental policy, since wastage of organic solid products has a high chance of occurrence given the maintenance and resources of the product quality.


Gender Pay Gap

This would impact greatly about the diversity and inclusion policy, since a particular gender is paid high attention and this has a high chance of occurrence of unrest within the organization.


Asset Misappropriation

These factors form a huge risk since this cleans the natural honesty and integrity of worker within the organization.




Qian, X., & Olsen, T. L. (2018). Operational and Financial Management in Agricultural Cooperatives. In Finance and Risk Management for International Logistics and the Supply Chain (pp. 193-216). Elsevier.


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