The above academic poster was created after considering the appropriate theories and models applicable in designing of posters. The diagram shows a schematic representation of tools that are expected to be used in the risk management analysis of TECHNEAU. The particular case study was conducted on TECHNEAU to try to perform an effective risk assessment. Also, it was created to improvise risk management techniques in the provision of safe drinking water for individuals. A case study was carried on to assess the risks that exist in the provision of safe drinking water for individuals and the provision at an affordable cost for all the stakeholders involved (Techneau.org, 2009).
There are many potential risks in water provision services. Some of the risks include the provision of water containing too many chemicals. They can be added over the required and recommended levels. Personnel, working at the water provision services organization, might also fault and fail to put any water treatment or no water treatment chemicals as required. This is likely to result in potential health problems for the individuals that might consume the water. Such risk would have a high likelihood of leading to deaths, especially if people would not be notified of the disease causing pathogens that they might be exposed to after consumption of the water. It would also have a high probability of exposing the organization to litigation in court. There are many individuals in the society, which would not understand why the organization failed to perform its duty in provision of safe drinking water to people that depend on it. The actual occurrence of such risk would also make stakeholders of the organization and its clients lose confidence in the company. As a result, they would feel that such an action might occur again since it has already happened in the first place (Techneau.org, 2009).
After analysis of all the possible negative outcomes the company, therefore, felt that it was necessary for them to perform a risk analysis, which would expose the weak areas in the organization. The management of the company developed policies and guidelines that once implemented could avoid risks and remove hazards. Risk management was also performed to offer means through which the organization could develop control measures in case the organization was to actually experience the identified risks (Drennan & McConnell, 2007).
When analysis is performed on water, the personnel evaluates the results and interprets them on the basis on the risks that the water poses, in terms of endangering individuals’ health. The personnel is trained to classify the levels whether it is acceptable or not. The level of risk that is posed might be at low levels and might warrant the personnel to control the overall risk.
Once the risk levels have been measured, the management of the organization should decide on the best ways to deal with the outcomes such as leave the situation the way it is, completely change the situation or reduce the risk levels. The performed action would also be dependent on the available funds and on the training of the available personnel. In the TECHNEAU case study, the risk analysis, risk evaluation and risk reduction tools and methods were analysed more carefully.
Risk measures, utilized in this particular case study, involved use of qualitative and quantitative means to get a better perspective of the situation. The qualitative technique used in analysis and measure of the risks in the organization included Coarse Risk analysis (CRA) (Boulder et al, 2007). The potential hazardous situations in the provision of water services for the organization were ‘graded’ depending on the level of the occurrence chance. The chance that the risk might occur is issued with a P (frequency/ probability). The outcome of the risk event occurring is designated as C for outcome of each of the events. The chances of events occurring are issued with different terms such as rare or frequently occurring. The likely outcomes of the risk factors are classified on the scales as being small, intermediate or very serious (Techneau.org, 2009).
Trained personnel in the water provision sector could be able to give details that are more specific on areas such as a more comprehensive approach of interpreting different levels of the consequences that exist as the risk factors in the water outcomes. For example, an individual that has been trained on technical issues about water supply could be able to translate that rare could mean that the risk factor of the given event could be once in a week or once in three months. A trained individual might also be able to provide the translation of small in context of a health risk. It means that the one should be able to explain how untreated water could affect individual’s health.
The figure shows the probable outcomes. It could be used to give the information used for analysis of the results.
The figure shows the chances of the different likelihoods and the different outcomes.
The obtained results could be used for interpreting the data using methods such as the free tree analysis. It could be done in order to give results that can be clearly understood and used for presentation to individuals that might not have technical training about water provision details (Twig, 2004).
The parameters, which would be affected by the water provision in this case, would be the possible negative health outcomes for clients who consume the water. To correct the situation, the water provision company would have to cut off the water supply to the clients. It is done in order to do damage control of the water by providing treating with necessary chemicals. The company also tested whether the treatment be effective in terms of making the water safe for consumption through killing disease causing pathogens in the water (Techneau.org, 2009).
The management of the organization would have to conduct a survey on resilience of the risk. Acknowledging and accepting risks are one of the greatest steps towards achieving the desired risk management in organizations. The discovered risks could be compared to already established guidelines that state the levels of acceptable risk for the organization. Through use of the acceptable outcomes, the management team could be able to make the necessary decisions concerning water provision and the necessary action to be taken.
For example, the risk factor could be found to be so huge that the company would have to close their water supply to certain areas. It is performed in order to treat the water and control the risk that has already been breached. Risk control would involve strict control measures to reduce the negative effects on people exposed to the contaminated water. The management would have to make fast decisions even if the information available to them would be limited (Thorton, 2002).
Risk control involves contacting all the stakeholders so that they could be aware of the situation so that they could play their part. The risk control action should be taken to the management of the company and should involve careful planning. For example, the management should be aware of the time that is needed to resolve the technical difficulties. Risk control should be used together with other tools in the organization to ensure that the risk is well handled and the organization is able to save the situation at hand (Solvic, 2000).
The management should be as open as possible when its representatives communicate to the clients about the problem they might face and the measures being taken. It is used to ensure that systems are corrected, up and running. Once the management briefs the clients through the media, they can be able to salvage their image with the public. As they are admitted to the fact they make mistakes, but they are sufficiently noble to acknowledge their mistake and seek fast and effective solutions. The determination should be shown effective to all the members involved. Systematic processes should be followed by the organization to come up with solutions for risk outcomes. The principle of proportionality dictates that the possible decisions, proposed by the organization, have to offer highly valuable determinations, which confer benefits in comparison to losses and to all the stakeholders.
The principle of reason should use the decision making process. Thee action should be within the economic limits and capabilities of the organization. The principle of allocation should be applied whereby the resultant outcome should ensure that neither the organization nor the society feels unfair through the decision. All the decisions that might have risky outcomes should be avoided. This is dictated by the principle of risk avoidance. The case study shows the different aspects that might have to be considered by an actual organization.
Analysis of Theory, Concepts and Research in the Poster
Application of risk management in the poster
Uncertainty is a risk that all organizations have to encounter because not everything that they plan is likely to come up the way it has to. Furthermore, different actions, carried out by the management, are likely to lead to different outcomes some of which might be unexpected. Risk management is necessary in the modern world where competition has gripped all organizations and they struggle to stay afloat amid the competition (Drennan & McConnell, 2007).
Organizations have to come up with innovative techniques and involvement of talented human resources to gain a competitive advantage, especially when benchmarked with other organizations. Competition has evolved to global level with the introduction of many products and services that have gained popularity and enlarged markets all over the world. Trading in a competitive environment automatically introduces an element of risk. It has to be well managed in order to ensure that an organization remains in business and is still competitive in comparison to other organizations that might be dealing with the same kind of business or trade (Kasperson, 2005).
Risk management can be applied to any form of organization regardless of size and business area. It involves identification of risks, use of available resources to minimize and control those risks. Most common risks are usually caused by the nature of uncertainty in financial markets, wrong direction in the course of a project, carried out (Tversky & Kahneman, 1983).
Failure of a project can occur at any point starting from the initial point, when it was created, to the phase when the project is implemented. Risks might arise from factors that the organization has no control over uncontrolled factors. For example, an earthquake might lead to huge losses in terms of profits. The losses might be huge in terms of lost opportunities or loss of confidence from stakeholders. One of the actual risks might be an attack from competitors. It would require the organization to do damage control and try to emerge on top in such a situation (Twig, 2004).
Risk management is a very important and necessary field to be applied to business. The accurate assessment can be used in the application of strategies dealing with such risks as transfer to a specialist in the area of risk management. The possible negative outcomes can also be managed in a way of mitigating the undesirable effect and lead to better results.
Risk Principles, Practices and Terminologies
Different risks exist in organizations and they are always dealt with according to the seriousness and available resources. In most business structures, the risks that can lead to the greatest losses are a matter of priority. Sometimes risk might not be tangible. This aspect is known as intangible risk management (Thorton, 2004).
The type of risk usually occurs because organizations do not have enough information to deal with the kinds of risks they are exposed to. Process engagement is also a common exposure that might occur when the correct processes are not followed. Relationship hazard occurs in organizations that are usually exposed to ineffective work processes. It might be caused by lack of team work and communication (Twig, 2004).
Various principles are used in the assessment and management of risks to encourage effectiveness in application of different techniques. Creation of value should be one of the first processes that are secured before the implementation of the risk management process. The risk management process should create the concept of integrating all the involved employees in the implementation process that contributes to the reduction or control of risks facing the organization. The international organization standardization (ISO) dictates that risk management principles should involve addressing of all assumptions and uncertainties that might be held by the staff in the organization (Royal Society Study Group, 1992).
Addressing of the employees’ attitudes and actions is a very important factor in the management of risks. A systematic process should be followed to ensure that all members of the organization are involved in the processes that are undertaken in the risk management (Solvic, 2000).
All risk analyses and management should be designed to suit the risk needs of the specific organization. There are no two organizations alike and this should be reflected in the solution that is made available to one of them. To ensure that there are free flow of information, risk management solutions should be very transparent. This would increase clarity for the employees in terms of their roles and objectives that they would be expected to fulfil (Chapman, 2007).
Key Conceptual Models of Safety Culture and Error Management
Organizations should ensure that the employees are highly trained in terms of dealing with potential risks that might occur depending on the field of business. Management should also strive to establish safety cultures whereby regular training is performed. Teams should be put together to improve their trust relations and their ability to tolerate and appreciate each other’s differences. it would promote a harmonious working environment at the workplace (Drennan & McConnell, 2007).
Organizations should establish and implement consistent and systematic guidelines that would promote a safety culture in the organization. Error management targets the reduction of risks occurrence in organizations and the mitigation of the consequences when they do occur in organizations. Organizations can positively view the management of errors to avoid too much pressure on the employees, which might result in more errors. Organizations find out the situations that might lead to high stress factors for their employees. Management has to work in the direction of reducing stress factors and any other aspects that might cause to reduction of errors made in the organization (Kasperson, 2005).
Construction of Risks
Risk is constructed with the help of various techniques. The stuff of higher level determines the risk management tools and techniques to be utilized in organizations. The qualitative risk management tools are usually aimed at the development of knowledge about tools that can reduce the risks, which can occur in organization, and means of avoiding those hazards. Quantitative risks are usually used to control the risks that might occur in an organization through the implementation of security systems, which would avoid or mitigate the risk in question (Solvic, 2000).
Qualitative methods should make proper use of the human personnel in the organization. Those people, who are on the ground, might be in a good position to offer solutions to problems that the organization is facing. Tools for identifying risks involve using technology, brainstorming, self-assessment sessions and workshops, carried out by risk management experts, filling questionnaires and conducting interviews (L ö fstedt, 2003).
Relationship between Risk Management, Strategy, and Governance
Risk management is considered to be important as far as organizations need to develop in order to gain a competitive advantage over their competitors and ensure that they perform as well as expected within an organization. Risk management is a strategic tool used in organizations to develop stable workable systems. Effective managers ensure that the organizations have well equipped risk management systems so that they could effectively diagnose the risks that might be faced. It is performed in order to reduce negative financial effects related to risks (Chapman, 2007).
This would help businesses to stay afloat in the market and to appear competitive when benchmarked with others that work in the same sphere. Leaders, using risk management, can expect high results in terms of performance because of the effective diagnosis and tools used in risk management (Bouder et al, 2007).
Vulnerability and Resilience
In an organization, the management of factors that might lead to the reduction of profits that are likely to be gained should be given priority in terms of resources, time and personnel allocation. Avoiding risks can be one of the best methods to ensure that businesses do not risk losses of their resources and, in case they risk their losses, the losses might be reduced. The disadvantage with avoiding risks is that it might lead to loss of opportunities that might present potentially high benefits (Frenkel et al, 2005).
Hazard prevention involves avoiding risks in case of an emergency. Risk reduction is also a commonly used by many organizations, for example, use of software security systems to ensure that the costs that are incurred are controlled effectively.
Risk resilience involves acknowledging and accepting losses that have occurred and an attempt to reconstruct the parts of the organization that has incurred damage. Risk resilience might involve risks that result in high damage to the organization in terms of not being insured or risks that might not be acknowledged by insurance companies. Such risks might include natural catastrophes such as earthquakes, typhoons and other kinds of natural disasters that might involve a lot of damage to a company. Risk communication involves various principles, which should be adhered, to ensure that firms maximize available risk management resources (Frenkel et al., 2005).
Communication in risk management should be concise and involving to the members of the organization. It is important that the employees feel they are involved in not only the implementation process, but also in the decision making. In risk communication, the management should ensure that they have all the necessary analysis information in terms of strengths, weaknesses, opportunities and threats.
The detailed information would place the organization at a competitive edge in comparison to their competitors and give possibility to deal with issues that affect them. Problems that organizations encounter can be either internal or external. The external environment and the stakeholders should be communicated to and given the necessary information they require. It helps them to perceive the organization in the way that is intended and in a beneficial manner. The management of the organization should ensure that it deals with the concerns of both the internal and the external stakeholders (Bouder et al, 2007).
Shareholders might have concerns about anticipated risks or those that have already occurred in the organization. The management should ensure that it prepares the necessary information of a report to address the concerns of such clients. When clients and shareholders feel that their concerns are addressed instead of being ignored, they are more likely to show trust to the organization and confidence in it even when it appears that the organization performs badly (Crounchy, Galai & Mark, 2000).