Risk Management - ABC Company - Case Study Example

Running header: Risk management Risk management Course Name Professor’s Name Institutional Affiliation City and State Where Institution is Located Date ASSESMENT 1 Learning institutions play an interal role in the society, they also require efficient management so as to meet their objective. Risk management is a key element in management of institutions, East town colleague has developed an risk management system to help mitigate or avoid losses that result from occurence of risks. The school has developed a procedure to identify ,analyse , rate and develop ways to mitigate risks. It consists of : A risk process. This is a systematic process that the management uses to continuosly identy, analyse and develop ways to mitigate risks.It entails Risk identification There are numerous risks within the school premises, however most would have an insignificant effect if they occured. Risk analysis Risk that top the list incude, fire and physical injuries. The school has adopted measures to mitigate this risks. Procedures. East town school has a systematic process that is followed once an riisk incident occurs. It incudes r Identification of potential risks Ground tour to areas where the risk may occur. Review of the potential risk Developing of ways to mitigate the risk. Stakeholders. For risks to be mitigated, both the the school management, pupils, the local authorities have to be involved. Stake holders incude The school principal. He/ she is reponsible of ensuring that risk management activities are carried out effectively within the school premises. On a quatery basis the principal requests for an risk audit to be conducted by the risk management comittee.It is the principal’s mandate to appoint a risk manager. Risk manager. He is responsible of ensuring that risk management management activities are carried out in accordance with the school ‘s risk management policy. He has the authority to appoint a risk owner in case a risk occurs and there is no one acclaimed to the risk.The risk owner will later present a risk audit to the principal. All school staff. The entire staff has a responsibility of identifying risks and reporting them to the immediate supervisors especially during operational practice e.g during class time. They are obligged to adhear to the school’s risk management procedure. Assuarance providers They report to the risk management comittee,the school mangement.They asses measures put in place to mitigate risksas well as make recomendations with regrd to the risk management framework. Risk management process. A risk to the school is an event or acction that could negatively affect bthe school.This incudes: Death or injury Financial loss Damage to the school’s reputation, Damage to the physical environment, Failure to meet regulatory or legislative requirements. Annual risk report. Risk Occurence Casualties Mitigation. Fire out breaks 2 2 Establishment of fire exits Purchase of fire extiguishers Swimming pool injuries 6 3 Treatment at the school clinic Buglary 4 0 Installation of CCTV cameras Employment of more security guards Accidents at the playing fields 1 6 Employment of lifeguards Trainig on safe swimming Food poisoning 1 1 Tests on quality of foods at the store Policy efficiency. The risk management policy adopted by the school has been effective in overcoming technological, political and social issues. A SWOT analysis on the policy reveals that : Strength The policy invoves all stakeholders, i.e the school management, members of staff, and the loca authorities. The establishment of a risk management comittee consisting of both vthe school management, local authorities as well as risk manager is useful in identfying, analysing and developing approches to mitigate risks. Weakness The technologial world is evolving, therefore risks such as buglury are becoming more sophisticated day by day. The costs to mitigate such risks has raised the budget allocation on the risk management docket. Threat. The continuos evoution of risks. The emmergence of new risks will always slightly throw the risk management policy off-balance. Opportunity. The policy minimizes the chances of risks occuring, in the long run activites or events that were considered to be big risks in the school premises will be greatly reduced. The school is conducting periodic risk management trainigs to both its staff and students in effort to avoid or reduce the occurence of risks. Members of risk mangement hwill be receiving regular trainigs on risk management from risk managemnt experts. The risk mangement policy has been excellent at mitigating most risks, howevera review on drawbacks within the system will make the policy more efficient . The policy should invlove more stakeholders, e.g the government, students, parents and the community living near the school premises. The policy should involve a more practical approach during the mitigation efforts.For example training students on safe swimming practices, creation of smoking zones for staff members, renewal of fire exit signs e.t.c Risk Recomendation Fire out breaks Creation of smoking zones for staff, Renewal of fire exit signs Swimming pool injuries Training of safe swimming Accidents at the playing fields First aid trainig Food poisoning Proper food storage Conclusion Occupation health and safety is good for a business, both workers and employees can develop loyalty trust caring and honesty at work in the following ways. Identifying risks that could affect both the workers and employer while at work. Employers should reward employees who observe the work health and safety guidelines. A workman compensation scheme should be devised in order to compensate individuals who suffer losses at work. The risk management comittee should involve both the employer and employees. I ASSESMENT 2. Risk management plan for ABC company Introduction ABC corporation is a distribution company that specializes in distributing soft drinks primarily Nevada state. There numerous intricates in the distribution of soft drinks, therefore a risk management plan plays an important role. Responsbilities/ Stakeholders Board of management. They have the ultimate responsibility for the risk management , they determine the appropriate level of risk that ABC corporation is willing to accept. ABC chief operations officer. He bears the authority to authorize a risk management audit, he chairs the risk managemnt comittee. It is his responsibility to authorize a review of the organization’s risk managent plan. Lastly ,he ensures that risk management activities are in line with the risk management policy. Members of staff All members of staff, both casual and permanent workers have the following duties: Duty to identify potential risk at their work stations. Duty to report the risks to their immediate supervisors. Duty to follow the organization’s risk management plan. Risk management comittee. This is a delegated council whose responsibilities are : Overseeing risk management activities on the operations that ABC carries out. Approve appropriate risk management procedures for ABC corporation. Monitor key risks and report the risks to the ABC management. Risk manager. He/she has a dedicated role in risk managementt, his responsibilities include; Ensures that risk management activities are carried out in accordance with the risk management procedures. Ensures that the risk management comittee presents risk management audits on a quarterly basis. Risk management process. ABC considers a risk to be any activity to be any event or action that has negative effects to the organization, they include that could result to : Death or injury. Financial loss to ABC Damage to the ABC reputation or negative publicity to the organization. Inability to meet legislative requirements. ABC also considers the failure to identify and capitalize on opportunies to be a risk. It is therefore important for the ABC corporation to understand the risks it faces. It is in this view that ABC has developed a risk management process. The process ensures that ABC develops a systematic and standard approach to its risks. Risk identification. This is a structured approach of identifying activites that would negatively affect ABC corporation. ABC has a structured risk identification system , it includes identification time and covergence of appropriate staff to identify the risk.The risk identification process is carried out within the operations of the risk management comittee. ABC also has an ad-hoc risk identification system where risks are identified during normal course of work . Risk are managed in real time and later reported to the risk management comittee. An annual risk identification workshop is carried out , it is chaired by the CEO all members of staff are also involved. Treatment of identified risks Risk rating and analysis. It is a process that ABC uses to analyse the identified risks, this includes understanding the cuses of the risks, as well as understanding control measures that the organization has put in place.The risk assesment determines The extreme effects of the identified risks , as well as the effects that would result iif the risk occured. The probabilities of a negative impact as a result of occurence of the risk. The risks are later rated with respect to their level severity.The ratings are simpified to : High Moderate Low The ranking determines The nature and appropriate mitigation actions to be undertaken Reporting requirements for the risk which includes who the risk should be reported to The monitoring method. The risk rating helps the organization in priotizing its risks as well as helps the management in developing control measures. Risk likelyhood table. Rating description probability Almost certain Expected to frequently occur 84% Likely Occurs in most circumstances 21% -49% Possible Occurs at pecified periods 6% -12% Rare Occurs at exeptional periods 3% Risk Rating description probability Damage of goods while on transit Almost certain Expected to frequently occur 84% Damage of bottles during bottling Likely Occurs in most circumstances 21% -49% Boycotts by workers/ industrial trikes Possible Occurs at pecified periods 6% -12% Ammendments of soft drink distribution legislations Rare Occurs at exeptional periods 3% After periodic identification ,classification and rating of the risks, they are assesd with reference to their score rates .Risks with higher score rates are givien more priority, it is in respect to the ABC risk management procedures that the money delegated for risk management is subdivided with respect to the risk rsting scores. Risk controls. ABC corporation has a number of ways that it responds to identified, rated and evaluated risks. The principle behind the risk strategies adopted by the ABC corporation are in respect to the severity of the risk when it occurs. Assesment on how the risk will be treated ABC is very specific on how risks are treated , they are either Avoided Where the corporation chances of migatin the risk is low the corporation does not under take activities that could result in occurrence of the risk. Risks with high ratings are more often than not avoided Mitigation ABC reduces the chances of the risk occuring by establishing control measures in its systemthrogh contracts, contigency planning, and liabilty cover. It is respect to the latter statement that ABC has contracts with its employees, insiuarance covers on the property and aganist financial lossas a result of business failure. Transfered to next users There are risks that ABC corporation transfers to the retail stores, this incudes warehosing of the already distributed commodities and transfer of financial loss on the distributed commodities,therefore ABC will not be liable of losses that happen once the distribution obligation is complete. Conclusion. Risk monitoring and reporting. All risks rated as almost certain, likely and rarein the risk identification and analsysis process will be reviewed by the risk management comittee on a regular basis. The review will be through: The risk manager reporting on new risks as identified by workers at their work stations The risk manager reporting on reviews of the risk register after an annual structured risk identification workshop. Roles of the risk management comittee. The risk management comittee has the following roles: Advice the senior manageent on risk management, Recommend appropriate action on identified risks. Review and endorse or ammend the risk management report presented by the risk manager. Assesment 3 1.1 Legislation. It is also known as statutory law,.This is a law that is created through a parliamentary process within trhe law making arm of the government ( parliament).Legislation can alsobe defined as the process through which a bill becomes a law , therefore a bill that is being discussed in parliament is known as a legislation. Legislations affect a manigerial roles in the following ways. Legislations can change a managers scope of involvement with the human resource. New laws can be very specific on how a manager interacts withthe human resource especially on the aspects of renumeneration, as well as work health and safety. Legislations can have an impact on the organizations’s policies, changes in some clauses within the law can make a certain policy to be a violation of the law therefore dcausing the organization to review the policy. 1.2 Code of practice. Codes of practice can be defined as guides to achieving set standard e.g ISO certification, health and safety standards e.t.c. These codes actually help organizations to achieve the desired levels of operations by benchmarking an organization’s quality to the set standards. Codes of practice affect a manager in the following ways. They help the management in planning. Managers have a role in developing quality standards, codes of practice help mamnagers inplannig on the future operations of their companies by benchmarking their standards to the codes of conduct. 1.3 Adivisory standards. These are sets of standards that are to be used by all types and size of organizations as they persue their objectives. Advisory standards relate to all kinds of risks as well as security measures either physical or financial. Adivisory standard s will affect the managers decision making process especially the financial decision, with the advisory 2. Steps that a manager can take to ensure that people from different cultures have access to and understand the OH& S / WHS information. Employee involvement in developing the WHS regulations within the organization. Employees are most likely to embrace the work health safety policies when they are involved in developing these policies.They are inclined to understand the WHS information in a better way when they are invloved in making this policies. Employee invlovement will help bring a dynamic approach of conveying the WHS/ OH information. Employees will give the employer much insight on how to convey the WHS/OH information in a way that people from diverse cultural background can understand. Use of universal signs. Images depicting flamable items and skull with a cross are a universal sign that that paricular item can catch fire, a manager can use such signs to share the information on OH/WHS accross different culture. The univeral signs can pass the WHS information accross cultures, however the employees need to be educated on these signs. Use of the main languages. There are about five languages that are universal, therefore there is a high likelyhood that most employees will comunicate in these languages. There is a bigger chance of employees undertanding WHS/ OH information, if it is communicated in thse languages.The main languages include chinese, english, french and arabic. Developing consultative arrangements. Consultative arrangements suite different types of employees in an organizationWhere permanent and cultural diversified workforce is low , a structured arrangement involving WHS can be developed. 3.Ways you can alert people of potential harzards and risks in the workplace. a) by using alarms. It is an efficent way of alerting people of a potential harzard or risk at a work place.A siren is loud enough to draw the people’s attention thus alerting people of the potential risk.Most work places have automated sirens that can aleret people of risks such as fire breakouts. b) Labels. It is a commnly used to alert employees of risks at work places, all harzadous products carry ladels depicting that the product is a potntial harzard . Workers are inclined to carry labeld products with the needed caution. c) Use of signs. Universal signs that depict danger, or a likelyhood of an item catching fire can be used to alert people in a working area of a potential harzard. This signs can be strategially placed or drawn near work stations where such risks lie, messages of caution can accompany the signs , for example a work station with a flamable material can have the fire warning accompanied by a message alerting smokers to be ware not to smoke in such a place. 4. How to measure and evaluateorganization’s OH & S /WHS systems i) Number of claims/ number of hours injury fequency. The number of claims is useful in evaluating the risk performance in an organization.The rate at which the risk occurs will detrmine the rate of risk in the organizatio faces. ii) Positive performance indicators. This is a measure that allows the organization to verify the progress that the organization has made aganist its risks.Positive performance indexes include safety audit, percentage of substandard conditions identified and corrected as well as the number of employees with WHS training. 5.Strategies that could be implemented to interest employees in OH & S system. i) Involvement of employees in developing the OH& S system Employees are more likely to embrace an OH & S system when their opinions are involved in developing the system. ii) Giving employees a chance to head the OH & S systems. When employees are in –charge of the OH & S system are, they are more likely to contribute their ideas of developing a system that meets their needs and more. iii) Social cutural approach when developing an OH& S system. On social grounds, employees are more likely to give their opinions on the best approach the organization can overcome occupational health and safety. iv) Use of social media to discuss OH& S concerns. The social media platform will provide a constant medium through which their work health and safety concerns while in an open way. 6. Strategies that would ensure participatory arrangements are established and maintained between employees and their representatives within a small business. i) Sharing information which concerns keeping employees informed about the WHS concerns of the organization. ii) Training of employees , training improves an employee’s skill, an employee will be much open to discus WHS/ OH& S concerns since they feel appreciated by the organization. iii) Rewarding of employees who have exemplary performance as well as those who adhere to OH& S /WHS sytems. iv) Involvement of employees in developing the OH& S system Employees are more likely to embrace an OH & S system when their opinions are involved in developing the system. v) Giving employees a chance to head the OH & S systems. When employees are in –charge of the OH & S system are, they are more likely to contribute their ideas of developing a system that meets their needs and more. 8. When to engage expert in OH & S /WHS for advice. It is impotant to involve an expert when developing an OH & S / WHS system for the organization.The most critical time to involve an expert is during major changes in the organization. For example when introducing new equipments, new workers or incase there is news of a new harzard that deems to change your WHS system. Changes in the organization such as introduction of new equipment might require an experts opnion on how to handle changes brought by the change in the WHS policies that you currently have. 9 Elements of the OH & S / WHS systems hieracy control. a) Reorganization of work to eliminate the hazardfrom workplace. b) Elimination or substitution of the hazard. Ensure that hazards are expozed as new materials and equipmentare being planned for the work place. c) Adoption of safer approaches Alternative tools or work systems should be developed , with the aim of mainting safety in the organization systems. d) Enclosure or isolation of the hazard. Potential hazards should be islated or enclosed to minimize the chances of the hazard occuring. e) Creation of harzard seives This is an engineering control that aims atmaking the working environment clean by either cleaning the air, purifying sewerage systems e.t.c. f) Administrative procedures They include job rotations, routine maintainance, trainings on hazards . administrative procedures facilitate continuity of hazard contol measures. g) Personal protective equipment It is a last resort control measure when other measures are not applicable. 10.1 Components of duty to care that are applicable to this case. i) Presence of a duty to care. The employer has a duty to care, he should be seen to take responsibility or to care about his employees and clients health , and safety while they are at hthe workshop. ii) Breach of duty to care. The employer fails to keep his clients and employees from suffering loss and injuy by continuing to have a failing hydrolic hoist at his work premises iii) direct injury as a result of breach of duty to care Both the workers and the client suffer body and financial lossed respectively as the hydrolic hoist was being used to repair a client’s car. 10.2 Evidence of breach to care The workshop owner has failed to make his wrkshp sae to both his employees and clients by having a hydrolic hoist that needs repare yet he refuses to carry out necessary repair on the hoist. As a result , both his workers and a client suffer injuries and a loss as due to his failure to repair the failing hydrolic hoist. 10.3 Repercussions of the incident under WHS /OHS regulations in regard to the worker and custtomer reactions With reference to WHS regulations the owner of the workstation should compensate both the employee and the client for the losses they suffered as a result of his breach on WHS regulations. The employer can face cancellation of his business permit or a fine as a result of violating WHS regulations. 10.4 Was this a foreseeable accident ? Yes. The accident was forthcoming, the assesment of the hydrloic hoists by the technician from Tripple industries indicated that tone of the hydrloic hoists was in a very bad condition. The assesment revealed that the braking system, some cables among other components were completely worn out. The technician’s conclusion was that the machinery was extremely unsafe and could not be serviced without extensive repairs. The technician affirmed that , without extensive repairs on the hoist was was a danger to the employee. It is therefore evident that the hydrloic hoist would cause an accident soon. 10.5 Measures that could have been taken to prevent the accident. The workshop owner would have adheared to the technician’s recomendation , he would have allowed the technician to carry out extensive repairs on the hoist. Workers would have boycotted using thehydrolic hoist with extreme damage, they would have cited that the hoist was a health and safety risk at their work station. The workshop owner would not have disregared the technician’s decision of locking the hoist and putting appropriate signs that the hoist was a health risk.His disregard to technical advice led to the loss. 11.1 What will likely happen. There will be an increased work pressure on the employees especially with the increased production quota. It will be very difficult for the employees to meet the increasing demands of their employer especially with the increased production quota, there is a poor working environment. Employees might decide to boycot work, the increased working demands and the poor working conditions for the employees might result to go- slow from the owrkers as they demand for better working condtions. New workers will have a hard time settling in their jobs, due to the incerase in production quotas, new employees could not follow the required channel of job enrollment and orientation to the job, as a result there is a high likelyhood that new employees might perform poorly . 11.2 Harzards in the situation. a) Health problems among the working force due to bad posture while at work. b) A potential health risk due to continued oil spill at the work station, a mundane of risks could occur due to the oil spillage, they incude a fire risk. c) A financial and health risk to the organization for hiring an employee without a proper introduction to the job. Thre financial risk would be that the employees turnover or contribution to the overall peerformance of the company might be low due to a poor introduction to the organization. 11.3 Harzard rates in terms of risk. High, The health harzard that employees are exposed to due to their bad posture can cause the organization to loose human resource yet it seeks to increase its production quota. Moderate. The oil spill is a moderate risk, the organization has already put measurees in place to reduce the oil spill by using sawdust to absorb the oil . High. The financial loss that the organization would face for not following the correct hiring procedure wil be catastrophic,employees with improper documentation on hiring as well as have no orientation to the job could jeophardize the organization’s goal of increasing the production quota. 11.4 Behaviours and problems contributing to potential accident situation. Poor hiring policy. The organization does not have a clear guideline as to how employees are to be hired, lack of a proper hiring process can result to loss for the organization, if it hires an employee who is not qualified. Poor comunication between the supervisor and the plant manager. It is poor communication that results to a poor hiring process , the plant manager did not inform the manager of need to increase employees or the increased producvtion quota, these failure has resulted to un informed hiring decison. Improper work schedules. They result to the organization over working its employees especially with the increased prodcution quota. Workers are not able to perform well under very high pressure. 11.5 Ways to resolve the stated problems. Developing work schedules. Work schedules will make the organization to organize its human resource, be in a postion to detrmine the excact number of employees needed to work under the proposed increase in production quota. Periodic meetings between the supervisor and the production manager will help the organization to plan for the human resource as well as for the proposed increase in production quota. Organizational goals and procedures can be clearly generated during these meetings. Developing a structured hiring process .The structured hiring process will attract qualified personell , it will also lower the risk of hiring an under qualified person. A structured lower the risks of the organization failing to orient newlly accuired employees to their jobs. 11.6 How and what level the stated problems should be addressed. Both the supervisor and the plant manager should be liable to how the organization is running, however the plant manageer has a greater responsibitity of setting up the goals of the organization, and developing the hiring procedures. The supervisor should develop the work schedule as well as monitor the operations of the plant. The plant manager and the supervisor should work harmony for the overall objectives e.g increase in produvtion quota to be successful, therefore they are both to held accountable. 11.7 Actions that could be taken by employees of the company. Go- slows on work. Employees could refuse to turn up for jobs, as they demand propeer employement procedures as well as proper renumenereation incase of risks, as well as due to the increased job demands . 12. Principles of ISO cerification on risk management. It is an international standard of risk management that is used to benchmark an organization’s policies and procedures whether they have attained the international certification. The ISO Certification 2009 covers risk management in all levels of management. Any organization that wishes to get to the international level of efficiency in managing risks must attain these standards. Organizations that have the ISO certification have attained these level of efficiency. 13. Duty of care. It is a a legislation that requires that directors and employees in an organization to perform their duties with due diligence , the duty to care principles demands that both the employer and employees to perform their duties in a manner that shows that they care . Their actions should not seem to infringe on the rights of clients and employees. 13.1. company law. This is a code f practice for all limited companies, this code of practice enables a company to conduct its duties as a legal and independent entity separate from its members (owners) it is under company law that the organizations accuire property, investcan sue or be sued e.t.c. 13.2. Environmental law These are laws that relate to the environment around the business premises. Business have a mandate of protecting their environments. It is under this codes of conduct that the law evaluates on business 13.3 Contract law This is a legisation that defines the terms of engagement between two parties, incuding companies.This code of conduct facilitate a smooth interaction between parties as they engage in business. 13.4 Freedom of information. This is a legislation that demands that any party engaging in either trading, employment has the full knowledge of what he/she is commting him/herself to before e.g penning a contract or before making a complete commitment to any activity. 13.5 Industrial relations and how a work place can be modified to accomodate people with disability. Modifying equipments and devices such as comuters so as to accomodate staff with disabilities. Restructuring of jobs so as to give persons with disabilities more job opportunities, some jobs can be job slots can be left out to people with disabilities. Training materials, modifying exminations are some of the measures that organizations can adjust . Such adjustments will open up job opportunities to people with disability. The working premises can be altered to accomodate people with disabilities , for example creating paths that will allow people with disability move with much ease. 13.6 Disability legislation. This is a law enacted in parliament to protect persons with disability from exploitation at work places, the disability act aims at giving equal opportunities to persons with disability at work places. 14. Relevant risk insuarances. a )Statutory insuarance b)Fire insuarance c)Workman compensation insuarance 15. Ways through which risk management can be monitored. a) Consent monitoring b)Plan monitoring c)Monitoring plan effeciveness References SWA (Safe Work Australia). (2011c). Interpretive Guideline – Model Work Health and Safety Act: The Meaning of ‘Reasonably Practicable.’ Retrieved on 24th October 2016, from; http://www.safeworkaustralia.gov.au/sites/swa/about/publications/pages/interpretivegu ideline Read More