The Importance of Risk Management - Essay Example

Risk Management Table of Contents Risk Management Table of Contents 2 Risk Assessment 4 Health & Safety Legislation 6 Fire and Rescue Services Act,2004 7 Emphasis on ‘Prevention’ 8 Integrated Risk Management 10 Examples 11 Introduction Risk can be described as combination of threats, vulnerabilities and their impacts. If it is possible to reduce any of the above factors, the risk can be minimized. Threat can be arise due to natural, technological and man-made reason and can harm the assets. And the threat is also exploited by vulnerabilities due to a weak security system. All of these lead to a loss of assets, maybe partial or total loss. Risk management is a systematic process of identifying a risk, assessing the effect in the business and taking right financial steps to deal with the assessment result. Even it is also consisted of implementation of a program for assessing the effectiveness. Therefore, it can be said that risk management is an ongoing process. There are four ways to deal with the risk. The first method consists of just rejecting the risk hopping that it will be resolved automatically. Accepting the risk and initiating appropriate actions against the risk can be another option. Transfer of the risk is another measure which indicates the acceptance of alternative risk, higher than the reasonable risk. Lastly, to mitigate the risk i.e. to implement the physical, administrative and technical controls in order to reduce the risk is the another way. Risk Assessment Risk assessment is a process or examination through which it can be understood that what can be harmful for the workplace and how it can be prevented in advance. It is important because it gives the authority an advanced alert for the risk that may occur in future so that the future accidents can be avoided. Apart from accident, risk assessment is also useful for reducing insurance cost and damages in machineries. This is a part of risk management and can be better understood by the following diagram. (Olzak.T, 2007). The main objective of the risk assessment is to determine the risk associated with a particular asset. In order to assess risk successfully, few more steps have to be followed, firstly the critical information regarding the assets have to be gathered and possible threats attached with the asset should be identified. Then, the vulnerabilities of the threats and possibility of exploitation are assessed. For assessment of risk, quite a few steps have to be taken. At the outset, identification of risk is necessary. The assessor must visit each and every corner of the work place to have a better understanding with the present condition of the plants and equipments attached in it along with the premises. They may also take advice of the employees. Then, it has to be made out that who are the persons those might be harmed and how. After spotting all the hazards and risk associated with a work place, the assessor must analyze it to take preventive measure to get rid of the risk. Completing the risk assessment, the result and the outcome should be written down and shared with the employees of the organization. Time to time, this assessment should be upgraded as per the changes to be brought at the workplace. The risk assessments have to be conducted by a competent person, having knowledge and experience in this field. The organization can take help of a specialist for the most critical and technical problems. In a hostel or a student accommodation centre also all kind of fire preventive measures should be adopted. Regular supervision is necessary in order to prevent any such accident. Apart from this, adequate steps should be followed by the authority of student accommodation centre for risk assessment. Health & Safety Legislation “Health & Safety at Work etc Act 1974” is attached with the risk assessment from the very basis. This act mainly shows the guidelines to the employers regarding their duties and responsibilities toward the employees. The act only asks the employers to take a step which is reasonably practicable. If the measure is too costly and time consuming in proportionate to the risk, then it is advisable not to initiate any measure. The act ensures that the employee should take sensible decision and measure to handle such kind of risk. As per the act, the prime requirement is to carry out the risk assessment even if the organization is small and has only 3-5 employees. Apart from risk assessment, the employers also have to hire competent people to implement the health and safety measures and to make arrangements for that along with the emergency procedure. The employer always should facilitate the training procedure to provide clear information to the employees. While measuring the risk through an ongoing assessment procedure, the employer of a particular department should work together with the employers of other department also to setting up an integrated measure (Government of UK, n.d.). Now, apart from the particular act there are few of the other legislations which need or have a provision of risk assessment. Those are as follows: Control of Substances Hazardous to Health Regulations, 2002 (COSHH): It refers to assessment of the risk from hazardous materials and takes suitable preventive actions. Management of Health and Safety at Work Regulations, 1999: This act is quite similar with “Health and Safety at Work etc Act 1974”. Here, also employer is required to appoint a competent person to carry out the risk assessment. Not only the above two there lots of relevant legislation which require risk assessment such as “Electricity at Work Regulations, 1989” and “The Health and Safety Information for Employees Regulations, 1989” etc (Government of UK, n.d.). Fire and Rescue Services Act, 2004 Fire and Rescue Services Act, 2004 contradicts the Fire Service Act, 1947. The purpose behind it is to bring a modernized Fire and Rescue Services. It should be as per the requirement of the 21st Century. This act primarily covers seven part of the Fire & Rescue Service. It consisting of the fire & rescue authorities, their functions, administration, employment, water supply and supplementary and general provisions. Emphasis on ‘Prevention’ The core duties of the authority can be undermined as follows: The core values of a fire service provider define that the limitation and give an understanding when the employees should take position within a controlled risk. Core values provide the employees with the understating that what has been expected from them. Inclusion of risk assessment in the fire service has the benefit of being expected by the Health and safety Executive. As per Sec 6 of Fire & Service Act 2004, this service always tries to prevent death and injuries. They provide fire safety education, Chip pan safety demonstration and smoke alarm installation for both the householders as well as others. Many of this authority also arrange training program for young people. They even work with local agencies and business. The Sec 7of this act ensures that the authority should have sufficient equipments, personnel and services to fight against the war. Therefore, they also provide adequate training to the personnel. It also stated that there should be proper arrangements for phone calls also that no phone calls can be missed out. The service provider also should have to possess information regarding the characteristics of the buildings and availability of water suppliers in the locality. The Sec 11 and Sec 12 of this act states that the fire service authority can work beyond its responsibilities to save life of people that are under challenge because of certain unusual events like that of terrorist attacks. As per section 31, training should be provided to all the employees and other staffs. This training session may be held centrally, regionally or locally. That is why the training institutes should be located in all areas. The core values of the fire and rescue service has been defined under Sections of 6, 7, 8 and 9. Where Sec 8 is mainly concerned with the traffic accident and Sec 9 is about the emergencies and from the descriptions of above two sections, it is cleared that both are given emphasis on the preventive measures. It is understandable from the above act that it tries to ensure the preventive measures (Goverment of UK, 2004). There is a well known proverb “prevention is better than cure”. This is minutely followed by the fire & rescue service providers. A research has revealed that in England & Wales around £6.6 billion is considered to be the cost of fire in the economy. The authorities engaged with this service always try to encourage fire prevention. A new task or duty has been taken by the authorities. They consider fire prevention as the main stream activity. These authorities have already implemented an Integrated Risk Management Plan to identify the risk group of their areas and the resources also. As they are moving to preventive and risk based approach, the authorities must maintain balance between the intervention and prevention. This act undertakes these changes (Office of the Deputy Prime Minister, n.d.). Integrated Risk Management Integration of risk management means accumulating all the risk of each level in strategic planning and decision making process within an organisation. The integrated risk management framework provides a guide lines which can help the employees to adopt more advanced and systematic approaches. Even it’s useful to setting up a risk-smart workforce which allows the innovation while taking preventive measures for that to taking care of the public interest. The integrated risk management process also recommends a set of risk management practices that the organisation can adopt in specific circumstances (Love.W &Lawyers.N, n.d.). The integrated risk management planning in case of fire service is about to dropping down the number of incident occurred from fire band improving public safety. Now, the integrated risk management has moved its focus at putting the people first then looking at the emergency incidents and focusing at the option for reducing those incidents (Communities and Local Government, n.d.). Examples The efficient and effectiveness of integrated risk management plan can be described through two examples. The first case is that of Oxfordshire Country Council Fire and Rescue Service (OF&RS). The aim of this authority is to safeguard the community as well as the persons visiting Oxfordshire. OF&RS have 24 fire station in Oxfordshire providing safety advice, emergency response and education. Here, the process of IRMP is the basic element of the planning process. It aligns all the activities related with the fire and rescue with the strategic priorities of the communities and local government and the local fire authority. The aim of this integrated risk management is to provide the fire and service as per the needs and requirement of the locality and ensure more productive use of the resources as they believe that the outcome will be safer for the workplace and the community. The targeted projects have been specified by the annual action plan and it help the fire authority to deliver long term aim. Before taking the action plan every year, the authority takes feedback and consults with the stakeholders. Likewise, they plan forward. After implementing integrated risk management plan the authority has set up plans for the future. They fixed their emergency response within 14 minutes (95%) and within 11 minutes (80%). As per the statistics of 2007, 90.42 % time they are able to respond within 14 minutes and 78.10% time they responds within 11 minutes. By this year they targeted to reduce the number of accidental fire-related death by 20% in accordance with the base year of 1999. The performance of the emergency response and fire protection responsibilities has been measured against the series of National Best Value Performance Indicators (BVPIs). The current activities of the authority are information fairs for older people, Electric blanket testing, Group talks on home regarding fire safety and special needed education. Their achievement can be better understandable by the following information. They have provided advice regarding home fire safety to the 3800 persons through various medium like events, road shows, fairs and group talks. They have fitted 10-years smoke alarms approximately in 500 homes. The core element of the fire and rescue services is Prevention, Protection and Intervention. All of these constitute of an integrated approach for minimising and controlling risk. Prevention is based on the Community Fire Safety (CFS) that is the primary component of the integrated risk management process. The aim is to adopt a proactive programme to reduce the impact and incidence of fire. The CFS policy is based on the best practices designed by CLG. Currently these authorities setup their own standards after withdrawn of National Standard by Government in 2004. That is why they bring more flexibility in the process to deal with the changing risk. By achieving the integrated risk management plans, OF&RS is able to set a standard to cover all incident types which is helpful to provide security and safety to the community (Oxfordshire County Council, n.d.). The second example is that of Lancashire Fire and Rescue Service (LFRS). LFRS is the part of Combined Fire Authority (CFA). Currently they operate in 39 local fire stations. The staffs of the LFRS provide protection, prevention and emergency response services. They have employed 1500 staffs to serve this wide range of roles. They have set their strategic objectives over the next three years. First objective is to minimise the number of emergency incidents and reduce their consequences. Second objective is to ensure a healthy, competent, safe and representative workforce. Next is to reduce the impact of the environment. They even have an objective for community too. They want to build healthier, stronger and more sustainable communities and the last one is to deliver reasonable value for money service. In March 2004, LFRS published its first IRMP that had been covered in 2004-09 period and sketching an outline of their intension that is radically improvement of the fire safety in entire Lancashire. This has sifted their approaches and priorities towards the preventive measure from emergency response. Now, it is the time to judge the efficiency and effectiveness of the IRMP process for this service provider. The organization is able to increase 300% of the number of Home Fire Safety checks. As per the data available of year 2007-08 and 2003-04, a comparative analysis can be carried forward. The percentage changes from 2003-04 to 2007-08 are as follows: Accidental Dwelling Fire - Reduced by 13% Deliberate Property Fires - Reduced by 57% Deliberate Vehicle Fires - Reduced by 49% Deliberate Secondary Fires - Reduced by 30% Staff Injuries - Reduced by 42%. Thus, it can be proved that with the implementation of Integrated Risk Management Plan the efficiency and effectiveness of the process can be increased (Lancashire Fire and Rescue Service, n.d.). Conclusion In each and every organisation, the importance of risk management is significant. It is primarily because of the safety of the people and property engaged with it. Risk management is followed by risk assessment that identifies the risk associated with a property. Moreover, all the health & safety legislation have a provision for risk assessment. Regarding the Fire & Service Authorities, they also follow risk assessment procedure. From the Fire & Service Act 2004, it is cleared that all the fire and rescue service providers should take preventive measure. It can be carried on by a pro active program. With the increasing and modern need and requirement of the communities it is necessary to adopt an Integrated Risk Management Plan within the organisation. Two examples have been cited in this paper namely Lancashire Fire and Rescue Service and Oxfordshire Country Council Fire and Rescue Service. Both of the fire service providers are able to develop its operation and minimise the accidents after implementing IRMP process in the system. With this note it can be concluded that there is a huge scope and application of risk management not only in Fire & Rescue Service Organisations but also in every kind of entities. References Love, W. & Lawyers, N., No Date. Integrated risk management. ARPI. [Online] Available at: www.arpi.org.au/Docs/ARPIIntegratedDefenceRiskManagement.doc [Accessed June 02, 2010]. Communities and Local Government, No Date. Integrated Risk Management Planning (IRMP). Fire and Resilience. [Online] Available at: http://www.communities.gov.uk/fire/developingfuture/integratedriskmanagement/ [Accessed June 02, 2010]. Goverment of UK, 2004. Commentary on Sections. Explanatory Notes to Fire And Rescue Services Act 2004. [Online] Available at: http://www.opsi.gov.uk/acts/acts2004/en/ukpgaen_20040021_en_1 [Accessed June 02, 2010]. Goverment of UK, No Date. Health and safety regulation. Health & Safety Executive. [Online] Available at: http://www.hse.gov.uk/pubns/hsc13.pdf [Accessed June 02, 2010]. Goverment of UK, No Date. Health and Safety at Work etc Act 1974. Health & Safety Executive. [Online] Available at: http://www.hse.gov.uk/legislation/hswa.htm [Accessed June 02, 2010]. Lancashire Fire and Rescue Service, No Date. Risk Management Plan 2008-11. Office of the Deputy Prime Minister, No Date. Fire & Rescue Services Act 2004 - Key Factsheet 2. Focus on prevention. Oxfordshire County Council Fire and Rescue Service, No Date. Integrated Risk Management Plan 2008-13. Olzak.T., 2007. What is risk? Use risk management for reasonable information asset protection. [Online] Available at: http://www.google.co.in/imgres?imgurl=http://i.techrepublic.com.com/blogs/Risk%2520Management%2520Cycle.jpg&imgrefurl=http://blogs.techrepublic.com.com/security/%3Fp%3D158&h=2545&w=2557&sz=331&tbnid=Evr6eM1vz4_rYM:&tbnh=149&tbnw=150&prev=/images%3Fq%3Drisk%2Bmanagement&hl=en&usg=__DZTGNsulrvfUksuE9RnU6BpNNNA=&ei=LbwCTNPdIM-3rAfs_Lg8&sa=X&oi=image_result&resnum=5&ct=image&ved=0CCEQ9QEwBA [Accessed June 02, 2010]. Bibliography Frenkel. M & Et. Al. Risk Management: Challenge and Opportunity. Springer, 2005. Read More