Risk Management of a Tour Team Composed of Twenty Members to Sydney Marathon - Case Study Example

Risk Management Course Name University Name Professor’s Name 26th March, 2014 Outline: Executive summary………………………………………………………3 1.0. Introduction……………………………………………………….4 1.1. General overview…………………………………………5 1.2. The Crew………………………………………………….4 2.0 Risk identification…………………………………………………6 2.1. The location ………………………………………………...…....6 2.2. Activity…………………………………………………………...7 2.3. Legal requirements associated with jurisdiction………………..6 2.4. Macro, micro and risk management context………………….…7 2.5. Risks associated with the trip……………………………..….….7 3.0. Conclusion…………………………………………………………....8 4.0. Suitability of the activity to the crew………………………………10 5.1. Strategies to manage the risks………………………………………10 5.1. Retaining risks………………………………………………..11 5.2. Reducing risks………………………………………………..11 5.3. Avoiding risks ……………………………………………….11 5.4. Transferring Risks……………………………………………12 5.5. Sharing risk…………………………………………………..12 6.0. References ………………………………………………………….13 7.0. Appendices…………………………………………………………15 7.1. Risk management process…………………………………….15 7.2. Model work health and safety frame …………………………15 Executive summary Introduction Risk management is the systematic and logical method that is applied to analyse, and monitor risks in any activity or process (Edwards &Bowan 2005, p. 281). Many managers use risk management process to ensure that they optimally utilize the resources at their disposal. The risk management can be applied in different sectors which have varying operations. The sectors where risk management is commonly used include: the health care, government institutions and in management. There are set processes for risk management which assist managers in the process of managing risks, the processes entail establishing the context, identification the risk, analysing the risk, evaluating and treating the risk (Nieman et al. 2003, 143). Location, team, foreseen risk and mitigation measure This paper discusses risk management in the context of a tour team composed of twenty members to Sydney marathon. The age of the tour team varies greatly and each has unique needs which should be analysed to identify risks that may relate to them. The risks associated to team members have been identified, analysed, evaluated and possible treatment measures provided. Controls to risks and the management levels policy and procedures that are necessary for risk management have been put forward. The management risks discussed includes retention, reduction, avoidance, transfer and sharing of the risk. 1.0. Introduction 1.1. General overview According to (Baltzan, Phillips and Haag, 2009, p. 524), management of risk involves the process of identifying the risk, analyzing it and coming up with the solutions to the risk factor. Allen, (2007, p. 426) describes risk management as a process that is used by mangers to address challenges and deviations from predicted outcomes and advance preparation taken to tackle the challenges (see appendix 1). Tourism and hospitality industries are some of the industries that have been fast growing all over the world. However, just like any other sector, there are risks which affect the industry. According to (Dorfman, 2007, p. 73) risk is a disaster that is likely to occur due to a hazard. A risk has two components, the vulnerability and hazard. If the two are joined, they then become a risk. Risks can be macro or micro risks. They can affect the industry as a whole or are associated with the people visiting a given area (PMBOK, 2000, p127). The risks that are likely to affect visitors can further be grouped into the following categories: natural factors, terrorism and crime, health and safety risks. For instance, terrorism is a major risk factor affecting the tourism and hospitality industry. There are a lot of concerns among the industry stakeholders on the safety of travelling and the security status of the tourism destinations. Terrorism became a major risk factor after the September 11, 2001 and the subsequent attack in the Boston marathon (Bannett 2005, p.359). This paper focuses on a risk management in the tourism and hospitality industry. It concentrates on a tour team to the Sydney marathon 2014. 1.2. The crew The tour team is composed of 20 team members with different ages, health differences and physiological needs. The composition of the group is as follows: Four elderly people aged between 60 and70 years, one is a female while the three are males. There are two people aged over 75 years and they all have health related problems. There are four children aged between 6 and10 years of age of whom two are having health conditions, i.e. one suffers from chronic asthma and the other one has severe allergy to peanut. There are six people who are aged between 35 and 40; three are males and the rest are females of whom one is in her 18 weeks of pregnancy. The remaining four are aged between 16 and 18; there are two young men and two young ladies. 2.0. Risk Identification 2.1. The location The marathon will be taking place in Sydney Australia. The urban area of Sydney is located in a coastal basin. The climate experienced in Sydney is a temperate climate, the summers are warm and the winters are mild. Rainfall is spread thought the year. Being a coastal town, the weather is greatly moderated by the ocean. During the summer, the extreme temperatures can be very high. In 2013 the highest recorded temperature was 45°c. Cyclones do not affect the city but the remnants of the ex-cyclones sometimes blow through the city. These weather related factors may pose a risk to the visitors. Pregnant women and women are susceptible to heat. Children and pregnant women are likely to suffer from dehydration, heat stroke and other heat related complications more often and severely compared to average adult. Cold weather also affects the children and they can experience cold and running nose. 2.2. Activity The activities to be undertaken during the marathon by the tour team will include the road race and fun races. The other activities that the visitors may be interested include swimming and site seeing. In addition to the above, there will be eating and social interactions. Bearing in mind this in an international affair, the chances of infections cannot be ruled out. 2.3. Legal requirements associated with the jurisdiction There are legal requirements that affect visitors entering Sydney. These include: the travel documents and other migration requirements. In addition, for an individual to participate in the marathon the minimum age for an individual to participate is 18 years. The age categories for participation in the marathon range from 18 years to over 75 years. The health documents required will include complying with the compulsory vaccinations and certificates of good health as per regulations in Australia. 2.4. Macro, micro and risk management context The macro risks normally affect the activities across board. Macro risk management is what might happen during the marathon to affect all the people attending the marathon (Hall et al. 2003, p 145). In the contrast the micro risk are very specific and are more localized. In the context of the marathon, the micro risk management will include the risks that may be associated to specific visitors. The management of risks will relate to the occupational health and safety regulations. In Australia there are New Work Health and Safety (WHS) laws. These regulations include a model WHS Act, the code of practice. Healthy regulations which are important to control diseases and workplace injury (see appendix 2 for a model WHS). 2.5. Risks associated with the trip There are different strategies that can be used to manage the anticipated uncertainties that are likely to have adverse effects. This may include the transfer of the threat to another party, avoiding the threat, taking actions to reduce the probable negative effects or absorbing the risk (Nieman et al, 2003, pp. 136-141). The risk may relate to the location an activity is being undertaken, the people undertaking the activity, the physical environment where the activity is taking place. These factors are very important in effective identification, analyzing and evaluation of the risk. It is through the factors that a proper risk management can be drawn. In the case, of the Sydney marathon, the risk that may relate to the location is the climate and weather related risks. Sydney experiences moderated climate but sometimes extremes have been witnessed. During the summer, the temperatures can range to a high of 45°C; the highest extreme temperature recorded in the summer of 2013 was 45.5°C while the lowest recorded during the winter of 2013 was 2.1°C. Bearing in mind the people attending the marathon, extreme temperatures can be a major concern. In the group there are two people aged over 75 years and have health problems. The temperature changes may also be a health issue to the four children aged between 6-10 years. Overheating during the hot weather can lead to dehydrations and heat stroke to the pregnant lady. Sydney also experiences ex-cyclones which may be risky to the visitors. Ex cyclones can also blow to the asthmatic child and trigger asthmatic attack. The location risks are natural and cannot be controlled. However, their anticipation will help in devising mechanism to reduce their likely adverse effects (Bharwani and Butt 2012, p. 147). 3.0 Conclusion The people to undertake the activity are twenty; they are of different age brackets and special needs. The fact that there are two people aged over 75 and all with health related problems, makes it a risk for them to travel for the marathon. However, their age related risk can be reduced by taking health care measures (Quieroz, 2001). For instance, is advisable that a doctor will travel with them. In addition, the four children aged 6-10 years will need special care; they are at risk of health problems in case of adverse weather changes. For instance, two of the children have allergies, which mean risk management strategies to avoid the allergic attacks should be put in place, such as carrying peanut free food for the allergic child and advising the child against buying other foods without an adult consent, for the asthmatic child a doctor will provide the right advice and possible preventive medications. There is also likely to be a health related risk for the pregnant lady in the 18th week of the pregnancy. For instance, the location of the activity is likely to experience extreme temperatures which may pose danger to her. Increases in temperature may affect the fetus during the first trimester. An increase in the core body temperature of a pregnant woman may affect the fetus, especially during the first trimester. The safety for the lady taking a flight will be determined by doctors medical examination, different airlines have different regulations and requirements for the pregnant passengers, this will be taken into consideration (Australian Government, 2013). In addition, the four people aged 60-70 are susceptible to health problems related to the old age. The physical environment where the activity is to take place is expected to have a lot of people as this is an international affair. This will be a risk to the asthmatic child due to possible dust and body sprays used by the people and overcrowding. The care giver should be educated on the preventive measures to asthma to protect the child. Terrorism has become a major threat in places where there are many people. In the Boston marathon, there was a terrorist attack and many people were injured (Bharwani and Butt 2012, p. 163). Even though this is a macro risk, awareness and caution is very important especially when the tour group consists of children. Sydney is also a coastal town and there are a lot of winds that are emanating from the ocean, for the asthmatic child, this can be a risky issue. The environment is also to have food joints and food vendors. One of the children has severe allergy to peanuts. This means that food being taken by the child should have ingredients highlight according to food, safety to ensure it is safe and peanut free. FSANZ carried out regulatory management of food allergens. A law in Australia was enacted in 2002 which requires mandatory declaring of allergen related foods and their products. The law requires label information; FSANZ has legislation on the information that must be on the food labels. Example is fish, peanut and the quantity used (Australian Government, 2013). 4.0. Suitability of the activity to team members Having identified all the risks that relate to the location, the people, and the environment, the Sydney marathon activity will be suitable for all the tour group members. The four members aged between 60 and 70 years have no health problems, except their advanced age. The risk that relate to their age can be reduced by organizing for tour guide group that has a health physician to monitor their overall health. The greatest risk relates to the elderly team members aged over 75 years who have health problems. However, close supervision of the doctor the two will be in a position to participate in the activity (Hall et al. 2003, p. 139). The four children aged between 6 and 10 will also be suitable for the activity. These children will not participate in the marathon event; they will be engaged in other activities as spectators, sightseeing and even indoor activities such as swimming. For the child allergic to peanuts, food taken by the child will be checked by the qualified guides to ensure that it is peanuts free. For the asthmatic child, the guide team doctor will also monitor the child. The same will apply to the pregnant woman. For the rest of the team that is aged between 16 and 18, there are no major risk concerns. In addition, all the team members are English speaking even though those aged over 60 English is not their first language. This rules out any major risk related to language barrier. With proper risk management in place all the team members will be included in the trip. 5.0. Strategies to Manage Risk The concept of managing risk involves the undertaking of various strategies in order to manage the risk. This is depended on the type of the risk and its probable magnitude. According to (Nieman, Hough and Nieuwenhuizen (2003, p.139) a risk can be retained, reduced, avoided or transferred. 5.1. Retaining the risk In some situations, the best strategy to be adopted will be to accept the risk. Retaining the risk happens when the risk is not great; i.e. the potential outcome of the risk is very minimal. This implies that even if the risk happened, the adverse impacts will not be immense (Gray & Larson 2006, p.217). For instance, the four people in the team aged between 60 and70 are in good health, likelihood of adverse health risk affecting them is minimal, even if it happens it will not be a great health risk. For the old team members and children, the risk is retained. This means there is a capacity to bear the risk. 5.2. Reducing or treating the risk Reducing a risk involves taking an action to counter the risk in case it happens. The course of action is supposed to ensure that the likelihood of the risk happening is reduced. This also involves reducing the effect of the event incase the risk happens (Gary and Larson 2006, p. 215). In the reduction of the risk, the cost of the mitigating is considered and the adverse probable consequences predicted. In the case, of the team members with health related risks a doctor was provided to help reduce the risk in case it happened. 5.3. Avoiding the Risk According to (Nieman et al., 2003, p.140) avoiding risk means doing away with an undertaking or the business venture. Avoidance of risk takes place if the projected cost of the risk is too high to the person or business. Gray and Larson, (2006, p 126) stated that a risk can be avoided by coming up with a new plan that will eliminate the risk. The avoiding of risk is normally taken in circumstances where there is no way to treat or reduce the risk. For the child with peanut allergy, peanut free diet should be recommended, most international cooking can contain peanut, the child should not risk, instead should avoid the foods completely no matter the quantity used. 5.4. Transferring the Risk Transferring of risk involves shifting the risk to another party. In many occasions businesses normally transfer their risks to insurance which is paid to take care of the risk in case it occurs (PMBOK 2000, p.142). According to Nieman et al (2003, p.143) risk transfer is the most popular way that is followed by business people to manage risks. 5.5. Sharing the Risk Risk can also be shared among different parties. This means that a business identity gives a portion of the risk to an associate and retains some cost of the risk. 6.0. References Allen, K.R. 2007. Growing and managing an entrepreneurial business. Boston, Mass.: Houghton Mifflin, pp.426-431. Australia. 2004. Risk Management. AS/NZA 4369; Sydney: Standards Australia. Bennett, J.A. 2005. Managing tourism services. Pretoria: Van Schaik, pp. 357-369. Australian Government.2013. Occupational health and safety [online]. Available at http://www.business.gov.au/businesstopics/occupationalhealthandsafety Bharwani, S., and Butt, N. 2012, Challenges for the global hospitality industry: an HR perspective. Worldwide Hospitality and Tourism Themes, Vol. 4 No.2, pp.150-162. Dorfman, M. S. 2007. Introduction to Risk Management and Insurance. Englewood Cliffs, N.J: Prentice Hall, pp. 72-89. Edwards, P.J. and Bowen, P.A. 2005. Risk management in project organisations. Sydney: Butterworth-Heinemann, pp. 271-289. Gray, C.F. and Larson, E.W. 2006. Project management: the managerial process. Boston, Mass.: McGraw-Hill, pp.311-328. Haag, S., Baltzan, P. and Phillips, A. 2009. Risk management: business driven technology. Boston, Mass.: McGraw-Hill, pp. 39-43. Hall, C.M., Timothy, D.J. and Duval, D. T.2003. Safety and security in tourism: relationships, management, and marketing. Binghamton: Haworth Hospitality Press, pp. 133-137. Nieman, G., Hough, J. and Nieuwenhuizen, C. 2003. Entrepreneurship: a South African perception. Pretoria: Van Schaik, pp. 129-173. Queiroz, L. 2001. Risk management strategies for the hospitality industry. Available at: www.hotelinteractive.com/article.aspx?articleID=1099. PMBOK. 2000. A guide to the project management body of knowledge. Newton Square, Pa.: Project Management Institute, pp.113-158. 7.0. Appendices 7.1. Appendixes 1: risk management process Figure 1 Risk management process 7.2. Appendix 2: Model work health and safety framework Read More