Risk Management Assignment: Managing Risk & Safety Concerns
Prepare a risk management assignment explaining each of the questions in 500 words.
1. As a safety manager you have been asked to draw up a plan that can be used to assess how effectively a company safety policy has been integrated into the overall risk management structure and how it is being communicated to employees. Identify and summarise the main areas that you would consider and the methods you might use.
2. Describe what risk managers should do to manage the inherent risks to organisations posed by systems.
3. As a safety manager you have been asked to prepare to do a safety audit. Summarise how you would ensure that an audit system looked sufficiently hard below the surface to avoid producing a result that seems satisfactory but failed to uncover serious underlying problems
4. It has been argued that concentrating on the prevention of an incident should take precedence over the recovery phase. Others have argued that a poor recovery plan would simply make a bad situation last longer. Summarise the pros and cons of both viewpoints.
1. Identification of the key areas of effectiverisk management structure
According to the words ofHopkin (2018) considered in the risk management assignment, safety and health management programs are the essential pillar for any organisation. This leads to the effective management of the organisational system without any disruptions. Furthermore, it also assists the organisation to remain prepared for any unprecedented situation in the future. Thus, multinational conglomerates always adopt robust safety and health programs for the organisation.
Integration of the company’s safety policy into the overall risk management structure
As per the recent report published by OSHA, more than $170millions expenditure is associated with workplace injuries and employee illness. This huge amount can be easily saved by implementing a robust health and safety program within the organisation. This illustrates the importance of effective risk management mechanisms for any organisation. Thus, an effective company's safety policy is formulated by focusing on the key areas.
The organisation has taken the risk management approach mainly to protect the tangible assets. Such tangible assets are related to the company's balance sheets, such as treasury risk, insurance management, environmental issues etc. However, the success parameters of the risk management plan are associated with the integration of management princess into the risk management and safety plan. Thus, theorganisation ned to integrate core strategiessuch as:
• Better business planning
• Capital expenditure funding
• Employee performance evaluation
Effective integration of the core management princess amplifies the success of the risk management plan for the organisation.
Communication with the employees
Due to the robust organisational culture maintained by the HR profession, a risk management plan can fail. For instance, if the organisation's top management does not follow the culture of constant monitoring and evaluation, the risk management plan can be dysfunctional while facing any emergency. Thus, the entire organisational culture needs to value the effectiveness and importance of the risk management plan for the employee. This is further associated with an organisation's commitment to maintaining ethical business practices and integrity as the core value of CSR attitude.
Identification of the key areas
In order to effectively implement the risk management structure, it is imperative to follow a stringent process. The entire risk management plan of an organisation is constituted of different processes. Thus, there is a need to identify the key puppies, cavities, inputs and outputs associated with the different processes. In this aspect, robust risk management approaches need to include the following attributes.
• Identification of the potential risk
• Sourcing of the materials
• Risk measurements
• Evaluation of the different risks
• Mitigation plan
• Monitoring and the documentation
However, all of this process solely depends on the organisation structure and operational activities. Thus, the risk management process needs to be customised in line with the organisational activity to improve the viability of the safety management plan.
Figure 1: Risk management structure
(Source:Hillson and Murray-Webster, 2017)
Infrastructure: By considering the nature of risk associated with the modern capitalistic business owls, robust risk management infrastructure is the significant foundation pillar for a risk management plan. The infrastructure must be potent enough to mitigate these risks. However, repeated revision of the already existing infrastructure is important in order to effectively manage the risk (Hillson and Murray-Webster, 2017). In order to implement better infrastructure, continuous communication between the risk management committee, chief risk officer is essential to formulate robust policy.
Hillson, D. and Murray-Webster, R., (2017). Understanding and managing risk attitude. Routledge. https://www.taylorfrancis.com/books/mono/10.4324/9781315235448/understanding-managing-risk-attitude-david-hillson-ruth-murray-webster
Hopkin, P., (2018). Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers. https://books.google.com/bookshl=en&lr=&id=bzFiDwAAQBAJ&oi=fnd&pg=PP1&dq=key+areas+of+ effective+risk+management+structure&ots=5RxUCLW5G7&sig=ANq7nUqnqoj2OBc55mb16x-xSdw
2. Responsibility of risk managers to manage the inherent risk of the organisational system As opined byFrederiksen (2018), the role and responsibility of risk management are essential for any organisation to address the inherent business risk posed by the system. Being part of the organisational workforce, risk managers implement the entire risk management plan by identifying the potential factors. Thus, to successfully manage the multidisciplinary risk associated with the organisation, the risk manager can do the following things.
Avoidance of the potential risks
It is one of the best methods followed by numerous organisations in order to address the situation. For instance, the organisation can avoid participating in the process that can bring potential risks to the operational activities such as aggressive commotion to gain better profitability (Frederiksen, 2018). In this scenario, the risk manager can identify this risk and guide the higher authorities to avoid such a planning process.
It refers to the acknowledgement of the potential risks. This helps to down the potential vulnerability for the organisation. Thus, in this scenario, the risk manager formulates the roadmap for better risk management by accepting the risk. This further illustrates the importance of maintaining a proper risk register for the organisation. A risk register helps to detect the different issues. This will also reduce the operational expenditure of an organisation. Furthermore, the risk manager can suggest the higher authorities buy the best professional insurance plans to avoid the business risk.
Figure 2: Profile of risk manager
(Source: Almond and Esbester,2018)
As opined byAlmond and Esbester (2018), the next key step that a risk manager can take is sharing business risk between multiple stakeholders. For instance, in the case of employee insurance premiums, organisations divide the premium between the employee and the organisation. This leads to a drastic reduction in the risk parameter associated with the insurance benefits. In this context, the risk manager can revise the risk register and planning process to equally divide the organisational risk between all key stakeholders.
A quality assurance program is one such initiative adopted by leading organisations in order to hold a strong reputation. Thus, the risk manager of an organisation can implement this program to deliver the highest quality of products and services (Almond and Esbester, 2018). This will ensure the customer satisfaction level. Thus, an organisation can potentially reduce the risks of changing market dynamics.
Loss prevention through control growth
Effective risk management of an organisation involves every employee. The trend of globalisation is associated with the aggressive competition between business organisations, leading to potential challenges and declining operating profit. Thus, the risk manager formulates effective training and developmental programs in order to maintain a standard performance. Thus, the organisation can reduce its impacts instead of eliminating the risk associated with the market dynamics. Certain risks are non-avoidable. Thus, this is one of the best methods chosen by the risk manager in order to better business strategies.
Almond, P. and Esbester, M., (2018). Regulatory inspection and the changing legitimacy of health and safety. Regulation & Governance, 12(1), pp.46-63. https://www.taylorfrancis.com/books/mono/10.4324/9781003039075/introduction-health-safety-work-phil-hughes-ed-ferrett Frederiksen, T., (2018). Corporate social responsibility, risk and development in the mining industry. Resources Policy, 59, pp.495-505. https://www.sciencedirect.com/science/article/pii/S0301420718301247
3. Effective safety audit
According to the Health and Safety at Work Act of 1974, it is the duty of an employer to protect the workforce from any hazardous incidents (Reese, 2018). This leads to the welfare of the employees. Thus, by conducting a regular safety audit, the safety manager ensures an effective health and safety program formulated by the organisation to protect them. This leads to the efficiency and legality of the organisational activity. However, it is imperative for the safety manager to sufficiently look at the normal surface of the organisation to detect the underlying risk. In order to avoid the failure of a robust safety audit program, the safety manager can adopt the following approaches.
Consistency in the safety audit programs
As per Velasquez et al. (2018), the majority of organisation conducts safety audits once a year. This increases the possibility of underlying failure. The organisation is associated with the constantly changing princess. Thus, annual safety audits are not effective to ensure the best compliance policies for the organisation. This often reduces the sense of urgency among the top executives and results in serious consequences. Thus, as a safety manager, I will try to ensure regularity in the safety audit programs. In this context, I will try to document very necessary changes that happen within the organisational process in order to maintain a robust risk register. Furthermore, weekly and monthly safety audit revision can actually enhance the success factors of the organisation's health and safety programs.
It is evident from the different research; the success of safety audits programs depends on the competency of the safety auditors. The individual needs to have expertise in order to gain years of experience with the different safety awards associated with the business enterprises. Even some organisations felt reluctant to even hire safety consultants. In this scenario, as a safety auditor, my first role and responsibility will be to employ a safety management needs audit team by collaborating with expert professionals. Proper education and training about the health and safety legislation such as Health and Safety at Work etc. Act 1974, Health and Safety at Work Regulations 1999 etc. Furthermore, regular inspection of the own work will be focussed on to meet the aim and objectives of the safety audit programs.
In order to effectively implement the health and safety management p0lns, regular documentation and record-keeping are the essential steps. In this context, safety auditors can analyse the incident reports to detect the multifaceted impacts of such incidents on organisational activity. They can scrutinise the loopholes in the existing safety plans. Apart from that, thorough reporting leads to an excellent safety auditing process. In this scenario, a risk register can pose immense benefits to the safety auditors. However, to conduct an efficient safety audit, one can interview the employee and the top executives to formulate a holistic perspective.
As opined byPidgeon and O’Leary (2017), the implementation of emerging technologies can help the safety auditors to amplify the effectiveness. Thus, as a safety auditor, I can use state-of-the-art health and safety management technologies such as Dakota Software to quickly analyse the status of organisational health and safety programs.
Pidgeon, N. and O’Leary, M., (2017). Organisational safety culture: Implications for aviation practice. In Aviation psychology in practice (pp. 21-43). Routledge. https://www.taylorfrancis.com/chapters/edit/10.4324/9781351218825-2/organizational-safety-culture-implications-aviation-practice-nick-pidgeon-mike-leary
Reese, C.D., (2018). Occupational health and safety management: a practical approach. CRC press. https://www.taylorfrancis.com/books/mono/10.1201/9781351228848/occupational-health-safety-management-charles-reese
Velasquez, C.A.L., Perez, G.L.R., Landa, A.F.C., Velasquez, R.M.L. and Ortiz, D.J.Z., (2018). Occupational health and safety prevention plan in water treatment plant. Risk management assignmentInternational journal of life sciences, 2(3), pp.1-12. https://www.neliti.com/publications/268403/occupational-health-and-safety-prevention-plan-in-water-treatment-plant
4. Pros and cons of the viewpoints
Pros and cons of first viewpoints
As per the report published by the Health and SafetyExecutive of the United Kingdom, robust risk management leads to immense benefits for more than 68% of the organisation. A robust health and safety plan for the organisation not only includes the prevention strategies it also illustrates the recovery measures. However, it has been argued by the researchers the prevention plan is much effective compared to the safe recovery plans. The various advantages associated with an effective prevention plan are as follows.
• A prevention plan helps the business enterprises to identify the risks in advance.
• In this context, the prevention plan also assists the risk assessment process. This further reduces the possibility of business hazards(Keers and van Fenema, 2018).
• Part form this, the preventive measure also minimises the vulnerability of the risk factors in advance.
• Awareness generation about the potential is another key advantage of preventive measures over recovery plans.
Although the organisation can save significant amounts of money and time by taking cautious perceptive plans, there are certain issues associated with this business.
• The preventive plan needs complex calculations and analysis. Thus, without expert knowledge, it becomes vague and ineffective.
• The defensive measure is associated with the external factors which are unavoidable. This does not ensure the full potential of the recovery plan.
• Ambiguity is another key drawback of the preventive plan as the organisation environment is associated with external dynamics that may rise to different unprecedented risks.
Pros and cons of second viewpoints
By considering the drawbacks of the prevention plan, major multinational conglomerates also formulate hazard recovery plans to address the situation.
• As suggested by Stelzenmüller et al. (2018), it has been highlighted by the organisation that certain risks are available in nature. Thus, anprevention plan will not be effective. Instead, a prior recovery plan led to cost efficiency by taking the corrective measures.
• Secondly, the recovery plan includes the employees and the expert safety audit teams; thus, it enhances employee productivity. Furthermore, a prior recovery plan trains the employee. Thus, it creates a sense of urgency among the professionals.
• Third, a risk recovery plan results in higher customer retention. The effectiveness of the risk recovery plan influences the brand's position. This further creates a sense of reliability among the consumer. Thus, the organisation will be able to retain their customer as well as business partners by showing their responsible attitude. However, the risk recovery plan is also associated with certain disadvantages.
Most business enterprise fails to take a robust backup plan. This can result in potential failure for the organisation. Furthermore, due to a lack of robust knowledge and expertise, the safety auditors and the top executives often fail to implement adequate infrastructure to address any unprecedented situation. Apart from that, the risk recovery plan needs to incorporate emerging technologies in order to quickly detect the loopholes (Tupa, Simota and Steiner,2017). Many organisations felt reluctant due to increasing operational expenses that led to the failure of safety management programs. It has been evident from the different study is that a hazards prevention plan is more effective than recovery. The key reason behind this is a hazard recovery plan help to back into the normal position. However, the situation may differ in case of an emergencysituation. Any unprecedentedhazardous situation can bring disastrous consequences for the organisation. Thus, it is better to formulate a prevention plan that at least help to address any problem andreduces the possibility of human or organisational loss.
Keers, B.B. and van Fenema, P.C., (2018). Managing risks in public-private partnership formation projects. International Journal of Project Management, 36(6), pp.861-875. https://www.sciencedirect.com/science/article/pii/S0263786317309092
Stelzenmüller, V., Coll, M., Mazaris, A.D., Giakoumi, S., Katsanevakis, S., Portman, M.E., Degen, R., Mackelworth, P., Gimpel, A., Albano, P.G. and Almpanidou, V., (2018). A risk-based approach to cumulative effect assessments for marine management. Science of the Total Environment, 612, pp.1132-1140. https://www.sciencedirect.com/science/article/pii/S0048969717323100
Tupa, J., Simota, J. and Steiner, F., (2017). Aspects of risk management implementation for Industry 4.0. Procedia Manufacturing, 11, pp.1223-1230.https://www.sciencedirect.com/science/article/pii/S2351978917304560