The paper "Role of Risk Perception" is a good example of business coursework. Risk perception occurs when individuals subjectively perceive the risk involved in an activity. Risk perception enables individuals to identify the benefits associated with risk, the potential of a catastrophic occurrence and this increases the individual’ s knowledge about the risk. In addition, risk perception increases individuals risk management ability by providing them with an opportunity to lay down measures for minimizing and preventing the occurrence of the risk. Providing information regarding risk increases the risk perception of people and this is essential for risk management.
Therefore, risk perception is necessary for the identification and control of risk. This paper will thus discuss the role of risk perception. This section will look at how risk perception influences companies to control the risks in their environment. According to Sorensen and Bach (2006, p. 1045), small enterprises have problems in their work environment in terms of controlling their risks. This means that they do not perceive the existence of a risk that they are exposed to. According to their findings, small firms have increased accidents and this was attributed to a lack of prior control mechanisms.
Hopkins (2006, p. 587) notes that by anticipating risk individuals are able to come up with ways of eliminating or reducing the risky occurrences that cannot be controlled through modification techniques. Risk perception creates attention on individuals and this enables them to come up with a variety of risk control techniques that need to be implemented in order to reduce or eliminate the risk. Furthermore, risk perception provides an opportunity for firms to identify the least expensive risk control strategies to employ so as to manage the risk.
Quinlan (2007, p. 22) notes that the lack of management controlled to the collapse of Rockfall mine where one person lost his life. The Tasmanian workplace Health and safety act requires a company to monitor the working conditions at the workplace and implement appropriate measures to control the risk that may be identified. The Organization for Economic Co-operation and Development helps companies to control risks associated with their activities hence ensure employees safety (Gibson at el 2012, p.
5) This section will explore how risk perception plays an important role in making it necessary for firms to carry out a comprehensive risk assessment. According to Takala and Schneider (2008, p. 26), risk awareness motivates individuals to undertake a risk assessment in order to identify the degree of risk they are exposed to. This is essential towards creating a safe working environment. Risk perception necessitates an evaluation of the risk and this is due to the uncertainty involved in handling risk. Insufficient evidence that occurs as a result of risk perception requires firms to undertake an in-depth risk assessment in order to understand the perceived risk (Gibson at el 2010, p.
5). Evaluating the risk through risk assessment changes the opinion of the employees and their perception about the risk. According to Hopkins (2004, p. 21) through risk assessment, individuals are able to gain more information pertaining to the risk and this acts as a means of fulfilling the inadequacy created during risk perception. Reyes and Beard (2008, p. 21) note that the lack of risk assessment in the MODU facility for drilling officers and personnel to comply with written rules and standards relating to safety in the workplace.
The Australian health and safety act requires drilling superintendents to undertake an in-depth risk assessment before commencing with the drilling process. Moreover, they are required to set rules based on risk assessment to assist in reducing the probability of risk occurrence. The European Industry Council publishes several documents that guide organizations on risk assessment (Gibson at el 2012, p. 55).
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