Safety and Risk Management

Question: Discuss about theSafety and Risk Management. Answer: Introduction The current review paper is primarily aimed to provide a complete evaluation of safety and risk management. It is also focused on the identifying the best way to implement the risk management process. In the current context, the article successfully provides a clear understanding on the risk management procedure along with its various steps. In addition to that, this particle article depicts AS/NZS 31000:2009 standard of risk management implementation in various organizations in Australia and New Zealand. However, the paper offers that Root Cause analysis will be most effective for the risk management implementation within the organization. In order to support the argument the paper carefully evaluates each framework depicting pros and cons quite realistically. In order to justify the selection, the paper describes the disadvantages of AS/NZS 31000:2009 as well as strong argument in support of the Root Cause Analysis. In order to discuss the organizational context the review paper ha s chosen My Cuba Australia company for effective evaluation. Risk management is considered as a highly impressive structured approach, which is capable of managing threat related to uncertainty. The risk management includes a number of operational activities such as risk mitigation through managerial approach, development of strategies as well as assessment of risks (McClaran 2014). The strategies are mainly focused to avoiding the risk or transfer the risk to another party. It is also aimed to reduce the imminent negative risk effect along with particular risk consequences. The traditional sense of risk management mainly attempts to mitigate the risk occurred from physical cause or natural disasters such as lawsuits, death, accidents as well as fires (McNeil et al. 2015). On the other hand, the contemporary risk management such as financial risk management concentrates on mitigating risks using numerous financial instruments. The major purpose of the risk management is focused on reducing the different risks stemming from any field that have been selected by the organization. Primarily, these threats are mainly occurs due to politics, organizations, humans, technology as well as environment (Zhao et al. 2014). Considering the ideal risk management process the organization tends to conduct a priority assessment for the identified risks. At first, the risk management attempts to deal with the risks, which pose a greater threat of potential loss or chance of occurrence. Then the risks with lower chance of occurrence along with lower potential of loss at last. However, this kind of prioritizing is highly complex, as it gets quite complicated to mark the priorities between the risks with high chance of occurrence but low chance of potential loss and low chance of occurrence but high chance of potential loss. This particular risk assessment stage is immensely crucial, as it often tends to be mishandled. Another major challenge of risk management is the difficulties in resource allocation activities (Hopkin 2014). It has been solemnly observed that while traditional risk management approach allocates resources for reducing the negative effects of risks, the organization often misses the chance of using those resources on activities that are more profitable. According to the traditional sense of risk management process, there have been number of steps which are influential for mitigating the risks. These steps are Risk identification and selection of domain of interest Process remainder planning Risk management social scope mapping Stakeholders identity and objectives mapping Risk evaluation and constraints mapping Defining an activity framework Risk analysis development Risk mitigation The risk identification can be categorized in two different ways on the basis of their analysis nature (Pritchard and PMP 2014). These processes of analysis are problem analysis as well as source analysis. There are several major methods of these risk identification, which are risk charting, common-risk checking, taxonomy based risk identification, scenario based risk identification as well as objective based risk identification. It has been identified that traditionally the risk prioritization by indexing them on the basis of risk of occurrence as well as impact of the risk. The formula for calculating the index is Impact of EventMultiplied by Rate of Occurrence The traditional processes for treating the potential risks fall into four major categories, which are transference, retention, reduction as well as avoidance. The organizations are highly encouraged to create a suitable risk management plan so that they can be ready for any given threat in the near future (Holley 2014). According to the risk management principle, they are also required to continuously review and evaluate the risk management plan with satisfactory accuracy. The organizations are needed to develop a suitable risk management policy as well as risk management process for developing a proper risk management framework. In the current context, the risk management implementation can be highly challenging for the organizational context. In order to smoothly operate the risk management processes, the International Organization for Standardization (ISO) fabricated an efficient work group for developing an international management standard in the year of 2005 (Lam 2014). In this situation the risk management working group extensively focused on Australian/new Zealand risk management standard AS/NZS 4360: 2004 for mitigating the risks in the organizations. The review of the standard resulted into a new standard named as AS/NZS 31000: 2009. From the year of 2009 the international marketplace depended on this particular standard for effective risk management practices. Since the year of 2009, the international risk management process highly favored from AS/NZS 31000: 2009 due to its capability to capture the system approach. The major principle of this particular risk management approach is identifying, assessing, evaluating as well as treating. Moreover, this particular framework has been used for the promotional campaign named as ThinkSafe SAM by the WorkSafe Western Australia, Western Australian Gvernment regulatory agency (Pollard et al. 2013). The SAM has been used as the acronym for Spot; Assess and Make. This particular framework has been highly capable of raising various means of qualitative approaches for risk management. The organizations utilize a number of matrices ranged from 5 x 5 matrix to 3 x 3 matrix to 5 x 6 matrix variances. It has been popular belief among the organizations that these qualitative matrices are capable of eradicating numerous harmful risks. Despite various strengthening characteristics of ISO 31000: 2009, the framework is highly flawed in terms of its numerous applications (Gredal et al. 2017). It has been identified that there have been a number of challenges faced by various organizations at the time of implementing ISO 31000: 2009. The scholarly societies of organizational activities have rigorously expressed their concern regarding the effectiveness of ISO 31000. In addition to that, the numerous organizations have been highly doubtful regarding the fitness of this framework at the time of execution. The major identified challenge of the risk matrices is foundation of rules-centric decisions for implementing effective risk assessment process. Archival studies has been successful to indicate that the rues-based standard highly cumbersome. In addition to that, it has been also observed that the rules based approach make the implementation of the standards highly exhaustive (Shanmugavelu and Ramos 2016). The rules based approach is highly focused to maintain every minute detail reflection in any given transaction. The risk management implementers find it highly difficult to execute the standard under rules based approach, as it is immensely complex. In addition to that, the AS/NZS 31000 standard tends to get greatly time-consuming as well as difficult under the rules based approach. In addition to that, the rules based approach can be highly problematic in the case of dealing with various sections of the standards along with detailed interpretation. It has been often noticed that th e organizations face critical distort in their financial statements due to the inflexibility of rules based approach of AS/NZS ISO 31000 standard (Glendon et al. 2016). It has been also identified that the ISO 31000 standard is highly dependent on the risk matrices as well as one of the most popular risk prioritization tool, IFAP (Industrial Foundation for Accident Prevention). Considering all of these facts ISO 31000 has not been selected as a Risk Management standard in My Cube Australia. On the other hand, the organization is highly depended on one of the most impressive WHS model named as Root Cause Analysis (RCA). Root Cause Analysis (RCA) is one of the most structured and effective frame work for mitigating the risks within the organization. This particular analysis framework is highly focused on identifying the core reason of the identified issue as well as performance variation (St Germain et al. 2014). This framework seeks to identify the major steps that are highly influential for identifying the source of the problem with the help of several major steps. Several most essential tools are utilized for finding the problem as well. The root cause analysis is highly focused on evaluating the issue and the reason behind it. It also concentrates on reducing the occurrence chance of the identified risks. It has been long assumed by the root cause analysts in various organizations that the events as well as systems are highly interrelated. The actions are likely to trigger another reaction in consecutive manner. Therefore, it is evident that the last incident that causes the problem within the or ganization can be traced back to find out the underlying reason of the problem and so on (Dey et al. 2014). Considering this facet the root cause analysis approach evaluates the chain of events in order to find out the exact cause of the issue. It has been observed that root cause analysis has been able to identify mainly three kinds of most important causes, which are physical causes, human causes as well as organizational causes. The physical cause refers to the material as well as tangible items, which can create a very dire consequence at the time of organizational activities (Hillson and Simon 2012). The physical cause is mainly occurs due to the faulty machinery within the organization and reason for major loss of time and funding. This particular cause has the capability of creating very potent loss for the organization. In addition to that, another reason that has been often identified by the root cause analysis is human cause. The human cause refers to the human mistakes that lead towards evident problem for the organization. It is often observed that the human causes are highly responsible for physical causes. For instance, if the employees are not inclined towards proper maintenance, it will evidently lead toward s the machinery faults (Christoffersen 2012). Therefore, the human cause has the capability of creating very compelling loss for the organization. At the same time, the root cause analysis has been able to identify that the organization also face a severe risk from the organizational causes. Generally, the organizational causes can be derived from the failure of any policy, process as well as system to execute the operation with effectiveness. For instance, the lack of information sharing is not fault of any individual or object but the management system itself. The management policy has not been able to develop an information sharing environment within the organization. The organizational cause is most critical compared to the other causes due to high probability of greater loss. In order to properly execute the root cause analysis the organization must focus on several major steps that are highly influential for the effective result. In this context, the first step is defining the problem that poses the threat for the organization. In this context, the analyst must properly detail the issue in a detailed manner so that no fraction of the issue can be missed. In addition to that, the root cause analyst also needs to identify the specific symptoms within the issue. The second step states the analyst to collect most relevant as well as effective result in the context of the issue (Holley et al. 2015). The major focus of the data collection is identifying the major proofs in context of existence of the issues. In addition to that, the data collection also deals with collecting the data in terms of the period so that it can be identified that how long the issue has damaged the organizational activities. In addition to that, the data collection is also quite conce ntrated on finding out the exact impact of the problem. These data can be most effective for identifying the severity of the problem. The analyst must analyze a situation in a proper as well as detailed manner so that the contributing factors can be analyzed from all angles. In order to enhance the effectiveness of the Root Cause Analysis the analyst must focus on the people who have a clear understanding on the problem so that an evaluated understanding can be acquired from extensive brainstorming. This brainstorming would be highly effective for analyzing the situation from various different points of views (McClaran 2014). In addition to that, the analyst must analysis the situation from the angle of every stakeholders of the organization. My Cube Australia finds the CATWOE tool as one of the most effective instrument for analyzing the situation. Another most crucial step of Root Cause Analysis is identifying the possible causal factors so that core cause of the problem can be identified. This stage is mostly focuses on the identifying the exact sequence that is influential for leading towards the problem. In addition to that, it also concentrates on the exact nature of the situation which allows the occurrence of this particular problem. This way the exact condition can be identified which is most likely essential for the problem occurrence (McNeil et al. 2015). In addition to that, this particular stage also identifies the surrounding secondary problems. Generally, one problem can lead to another major problem. Therefore, identification of the surrounding problems would be highly effective for providing the understanding regarding the severity of the problem. In order to identify the causal factors as much as possible, My Cube Australia mostly focuses on the Appreciation process. This process is highly depended on using the facts to cross check the validity, reliability as well as relevance. This way the organization can attain a numerous number of information regarding the factual consequences. Another method applied by the organization is Five Whys. This process is basically a set of questions that can lead towards the heart of the problem. These questions are highly effective to identify the core reason of the problem in day-to-day business (Zhao et al. 2014). My Cube Australia also attempts to use Drill Down process which is basically focused on breaking down the individual issues into separate smaller issues for perceiving the entire scenario of the problem. In this context, Cause and Effect Diagram is also useful for identifying the beginning stage of the problems. In order to identify the beginning time and scenario this technique develops a chart depicting every causal factor. The fourth stage of the Root Cause Analysis is focused on finally identifying the root cause of the problem. The major two purpose of this step is unearthing the reason of the existence and likelihood environment of the problem. My Cube Australia uses the same tools that have been used in the previous stage in order to identify the roots of the each factor. This way the organization would be able to reveal the each level of cause within the problem (Hopkin 2014). Lastly, the fifth step of Root Cause Analysis mostly focuses on the recommendation as well as implementation of the solution. This step identifies potential strategies for resolving the issue. In addition to that, this particular stage also recommends the process of implementation so that the outcomes can be effective. In addition to that, this step would be also able to suggest the most suitable party for implementing this solution. Furthermore, the associated risks to the solution would be also identified by this particula r stage. In addition to that, the organization is also needed to plan before the implementing the solution so that potential failures can be properly identified. The major reason for selecting the Root Cause analysis is numerous operational benefits that would be highly effective for the organizational success. In this context, the major benefits of Root Cause Analysis are given below Solve Real Problems: Root Cause Analysis is highly effective for resolving the practical issues in the organization with its simplistic serial wise stages. Safer Workplace: As the root cause analysis is capable of providing most effective evaluation of every organizational problem as well as its surrounding problem, it can effectively provide a safer work environment (Pritchard and PMP 2014). Less spending: As the root cause analysis is mostly depended on the basic as well as simplistic steps it can evidently reduce the cost of the analysis in comparison with others analysis procedures. Longer lasting solution: Root Cause analysis is not only focused on resolving the issue but also eradicates the chances of further occurrence. Therefore, it can effectively provide a long lasting solution. Improve reliability: Due to its highly effective analysis procedure along with chain identification process it is proved to be highly reliable for providing realistic solution. Identifying possible supply chain interruptions: Root cause analysis can be proved as a major tool for identifying the major potential interruption in the supply chain management practices (Holley 2014). Analyze near misses: Root Cause analyses never provide any simple chance to miss out any problem at the time of analysis. In addition to that, it is also effective for identifying possible chance of risks. Reinforcing quality control: Root cause analysis is highly effective for reinforcing quality control as it can effectively evaluate the situation in a minute fashion (Pollard et al. 2013). Supporting continuous improvement: Root cause analysis is highly popular for its effective support in the continuous improvement due to its identification of every chain problems within the organization. Facilitating change management: Root Cause Analysis is also very important for facilitating the change management within the organization as it can effectively identify as well as resolve the arising issues in an effective fashion. Reduce environmental impacts: As Root Cause Analysis is highly capable of identifying every point of views of potential problems; it is evident that it will be able to identify the environmental problems in advance. Therefore the organization would have better opportunity to reduce the environmental impacts in a successful fashion. Improving performance management: The organizations performance management can be successfully improved by the Root Cause Analysis, as it can effectively identify the core problem regarding the performance flaws. The above-described paper has been able to identify and discuss the models, assumptions and values that underpin the risk assessment principles. 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