Home 

Helpful Things

Sitemap

Risk Management

  Causation Model

Plan-Train-Do Model

  Process 

 Process Rating

 System

System Content

  System Structure

TopChem example

  Good Management Practices

Links

© 2001 Topves

CONTACT

Looking for a program to build websites?

website design software

 

 

Risk Management, Safety Management and Loss Control

Topves

1.5. Risk Management

Risk Management can grossly be divided into two main areas: control of risk and risk financing. Control of risk includes the elimination of risks as well as the reduction, in frequency as well as extent. Control of risk has an important influence of the financing of risk irrespective of whether that will be out-of-pocket or through insurance. Risk control can be divided into two areas too: organizational and technical. While preference will  often be given to technical (hardware) solutions (since those - if well done - do not normally depend on the direct influence of people), the organizational area includes all the issues necessary to make proper decisions, design and build technical systems and maintain and improve those. Organizational issues are at the heart of the risk management system and the focus of this website.

The Risk Management process is very similar to the basic Problem Solving sequence. Risk is a potential problem, something that can happen in the future. If the risk materializes then we have a loss. In the sequence, just replace the words "potential problem" by "risk" and you have the process that includes the following steps:

  1. (potential) problem recognition

    1.  can there be a problem? In risk management terms - is there a hazard?

  2. (potential) problem evaluation in terms of event frequency and possible consequences. This is what in risk management terms is called "risk assessment".

    1. is the (potential) problem small enough to be ignored?

  1. (potential) problem control.

    1. can the (potential) problem be eliminated?

    2. if not, we will have to live with it and take action to keep it at an acceptable level.

    3. cause analysis - what are the various causes that can lead to the problem? We can only control it if we know what the causes are.

    4. what are the possible event frequencies and consequences related to the various causes?

    5. establishing alternatives to deal with the potential problem, a combination of technical and organizational measures - prevention (directed at event frequency)  and limitation of consequences, including risk financing.

    6. choice of best combination of technical, organizational and risk financing measures. Identification of what needs to be done and setting criteria for these control measures.

    7. execution of the selected control measures

    8. periodic evaluation of the control measures - measurement and evaluation of control measures carried out - are they meeting criteria set?

    9. correction if control measures are not carried out properly. Loop back to 7.

    10. evaluation of results - are control measures producing desired results? if not, altering or extension of control measures may be required or other control measures may have to be introduced. Loop back to 5/6 etc.

    11. learn from what goes wrong and feed that learning experience back into the process. Loops back to 5/6  and 7 etc.

The above sequence represents a process with several loops depending on implementation of choices and results obtained.

I have also visualized the risk management process in a different manner as an event tree, as follows:

Ideally, risk management should start with hazard identification and risk assessment and then develop from there. If that route is followed, the management system (which is at the heart of this website) will be developed in relation to the residual risks that remain after termination, elimination and reduction efforts have taken place. In my approach to management system development, however, the same caution has been built-in through the structure that is present in each of the management system activity areas. That structure starts with a need assessment for the activity concerned and ends with the periodic evaluation of activities and their results. 

See also the PDF document Safety Management and the ISRS. 

See also "Philosophy".

See also "Management System"

    

THE principle of MANAGEMENT RESULTS

 "A manager tends to secure most effective results - through and with others - by performing the management work of planning, organizing, leading and controlling."