Understanding Strategic Risks In Risk Management: A Case Study

Identifying different kinds of risk in the context of the case study

Discuss about the Risk Mitigation And Work Health.

The term strategic risk refers to the risks that are related to the strategic planning of an agency and the management process that is associated with it. The impact of strategic risks are evident in the in the challenges faced by an organization in achieving the vision and the strategic objectives that are documented in the strategic plan of the agency (Glendon, Clarke & McKenna 2016). There are certain kind of risks that requires identification, monitoring, treatment and management through the involvement of the executives of the company (Clarke & Cooper 2004). The operational risks pertain to the challenge in achieving the individual programs for the management objectives. The operational risks entail the senior officers who are responsible for the branch, work unit and division. The aim of the paper is to identify the different kinds of risks in context of the case study and elaborate on them. In addition to it, there is discussion on one specific hazard and analyze it through the risk management model.

The risks that have been identified from the given case study are injury from the high chain wire that surrounds the fence. The second risk pertains to the use of the forklift that may lead to injury. The third risk in this context pertains to the noise pollution that is caused due to the late night operations that leads to extreme level of noise pollution for the residential areas that are located in close proximity to the area of operation. The fourth hazard that can be identified in this instance is the robbery that happens during overnight. In the same light, another hazard that has been identified is that there may be theft of harmful chemicals. If this chemical is passed on to the wrong people, it will lead to chemical hazards. Another hazard that has been identified in this context is the installation of chain wire that is topped with the barbed fence. The last hazard that has been identified is boring holes in the ground that may lead to earthquakes and create problem for the community.

There are multiple definitions of risk that are commonly used in the discourse of risk management and workplace safety, however a more sophisticated understanding of risk implies the opportunities and possible threats and the ability of these threats on the organization or the agency to meet the objectives. Therefore, in other words is associated with both the challenges and the opportunities for an agency. A standard distinguishes between operational risks and strategic risks (Clarke & Cooper 2004). The notion of risk management represents the culture of an organization. This is the process of recognition, evaluation and response to the risks and the different responses to the communication of the outcome of the risks through engagement of the appropriate parties. The objective of an effective risk management system is to improve the process of planning and enabling the key focus to be fixated on the core business and the appropriate delivery of the service (Geller 2005). It would reduce the tendency of the costly surprises and helps in the preparation of the undesirable and challenging outcomes and events. The principals of effective management in the context to the Queensland government agencies are that the risk management framework is weaved with the different agencies that are processed by the government that includes the operational planning, strategic planning and the executive management functions (Hale, Borys & Adams 2015). The risk management needs to be supported by the program of education, development for the staff and training that is to be devoted at each of the levels in the agency (this includes the manger, supervisor, executive and the director. The risk management process designates the clear ownership of the accountabilities of risk and the associated duties and responsibilities of risk. The discourse of risk management involves both the lessons learnt over a period of time and the existing experiences.

The importance of risk management in achieving agency objectives

Hazards can be controlled through the hierarchy of control elimination, substitution, isolation, engineering, administration and personal protective equipment (PPE). The stage of elimination is concerned with the controlling the measures entail the elimination of the risks. There are high levels of risk that pertains to the theft of the goods from the parks that are parked overnight. The thieves are climbing over the fenced and passing on the goods over the fence to the lightweight utility vehicles.

The control factor in this situation would be having a security guard near the trucks to ensure that there is someone to look after the goods and thereby prevent the theft. An alternative to this would be to shift the goods in a storage house instead of keeping it overnight in the truck that enables the thieves to steal the products easily from the truck. The next stage is the stage of substitution. This stage involves the substitution of the hazards with a safer material or a process once on recognition of the hazardous process or the identification of the material. Risk: It has been identified that the presence of harmful chemicals in the trucks would provoke the thieves to steal it and thereby the objective should be to substitute the harmful chemicals with the less harmful alternatives. Control- The control measure in this situation would be to immediately substitute the goods with other kinds of substances so that it does pose any threat to the wider community even in a situation when it is trespassed.

Another kind of respond against hazard can be the stage of isolation. In this control would be separating the hazard or the hazardous work practise from that of the employees through sectioning off the area or through the erection of barriers or relocating the hazardous work practise of the other employees and the practises associated with their work. For example since the hazard in this case is the misuse of chemicals and the potential threat that may emerge in the context of the theft of the harmful chemicals. Another risk in the light of the theft is the transferring the goods from the truck that are parked overnight. Through the application of the isolation strategy, the measure would be keep the area fenced with barbed wire or through the transference of the hazardous materials to a safe place.

This step is concerned with the assessment of risks and the potential impact on the business. It is not sufficient to rely on the perception that may be misconstrued and therefore lead to repercussions or unplanned outcomes. This results to the demand for systematic approach to the management of risk. Although there are a number of methodologies in this regard, there five key elements or five steps to this- Identification of the hazard, assessment of risks, controlling the risks, allocation of the responsibilities with the aim of dealing with problems and the final step is the evaluation of the problems.

• Identification of the hazard- This is the first step of risk management and is concerned with the appropriate identification of hazard taking into account all the elements of the workplace. The hazard that has been identified at this stage is chemical hazards. Chemical hazards are caused by the chemical substances that are found in every workplace and leads to a number of risks of variable nature ad that may bore severe consequences (Geller 2005). Hazardous substances include correction fluid, photocopier toners and ozone, adhesives to name a few. In the context of the case study, there has been no mention of specific chemical substances that are being stolen by the thieves. It has been identified that construction sites are replete with chemical substances that may cause hazards. Ingestion of the chemical substances may lead to poisoning and damage of heath of the person.
• The second stage is the risk assessment stage that is concerned with two key aspects. The first is the likelihood or the probability of risk of an event and the repercussions on its occurrence. According to Stranks, this is concerned with the identification of the risks and it has been understood and defined as the third parameter. The likelihood of an event-taking place can be assessed on an appropriate scale. There are five points in this regard- rare, unlikely, possible, likely and almost inevitable. In the context of the case study, the likelihood or probability of the theft of goods and chemical substances are quite likely considering that those are left in the truck without any security.
• Risk consequence- The third stage in the risk assessment is similar to the likelihood stage. In this stage there are five measurements like insignificant, minor, moderate, major and critical that needs to be taken into account. Considering the theft of harmful substances along with the important goods that are useful for the construction project of the company, it can be stated that the risk consequence is of major nature. This is because the chemical substances that have been stolen may be used for wrong reasons and thereby can cause severe damage to the health. It will cause immediate threat to the people. Secondly, the goods that have been stolen will interfere with the work of the company and the company may have to incur loss for the days when there are no work. The company will have to repurchase the goods that will add to the cost of the company along with the cost of the labour
• Risk matrix- The fourth stage has been identified as the risk matrix stage. This stage is concerned with the urgency for responding to the risk. This can be achieved through two methods-one through the calculation of the score and another through the matrix. Often colour-coded tables are used. Since a single risk has been identified in this case, it can be stated that the likelihood of the risk is quite likely and the consequence of the risk is major. Based on this outcome, it would be easier to provide justification and decide o the priorities of the organization in responding to the risk. Considering the framework of WHS, the risk management model should incorporate the tasks and occupations associated with risk, the number of people who are the receiving end of the risk, the probability of the hazard that may lead to the injury, the duration of exposure of the person to the hazard, controlling the measures that are already in place and the possible consequences of the risk (Hillson & Murray-Webster 2017).
• Risk control- The final stage of the risk management is concerned with the controlling the risks that includes elimination, substitution, engineering, administration and the personal protective Equipment (PPE).

Controlling hazards through hierarchy of control

There is a need for the implementation of the risk management model with the objective of managing the risks. The term implementation is concerned with the actual adaptation of the controlling of the risk management strategies. This stage involves the agreement, commitment and the acceptance of the risks that are to be developed by the managers, users and the system designers. There needs to be a consensus regarding the nature or characteristic of risks, the concomitant issues that emerge with the prevalence of the risks and the control measures that have been adopted in the process (Christian, Bradley, Wallace, & Burke 2009). Secondly, there is a need for acceptance of responsibility with the aim of successful implementation of the risks and the various stakeholders who would be committed towards the management of the risk. In this case, it is important for the site manger to deploy security guard and the risk management designer to create plan that would appropriately respond to the risk. Thirdly, there is an imperative for risk monitoring which is the most neglected area of risk management. The feature of this stage is to refer to the different kinds of risks and monitoring of the hazards and in the assessment of the effectiveness of the control measures in a periodical manner. This stage would allow in redefining the priorities. The entropy model of risk can be adopted in this context. This model is concerned with the risks that are present in the natural systems as well as the entropy that is the degradation of the universe (Goetsch 2011). The adoption of this model is motivated for countering and tackling the different kinds of risks that have emerged in this case study.

References

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