ALYSSA MAE H.

ATUN
Instructor
Sorsogon State University

RISK MANAGEMENT AS APPLIED TO SAFETY, SECURITY AND SANITATION

ALYSSA MAE H. ATUN

Instructor
Sorsogon State University
MODULE 1: RISK MANAGEMENT CONCEPTS AND PRINCIPLES
CONTENT SUMMARY LEARNING OUTCOMES

As a management tool, risk

assessment is powerful as it  At the end of this module, the
provides fact-based and science- student should be able to:
based decision making in safety,
security and sanitation. The trifocal  1.Define risk as used in risk
functions of risk assessment as assessment.
overarching process shall be  1. Discuss the principles of Risk
conducted through the discipline of
Management.
risk identification, risk analysis and
risk evaluation. It follows that risk  3. Summarize the factors to consider
shall be communicated to all levels in risk identification.
of organization to understand the
risk, to promote awareness and to
gain support.
INTRODUCTION
The ability of predicting what the future holds and choosing effectively among varying
alternatives lies at the center of contemporary societies and organizations. Risk
management helps us navigate over a broad range of decision-making processes, from
making investment decisions to safeguarding our health, from waging war to planning
families, from paying insurance premiums to wearing a seatbelt when we drive, from
planting sugar canes to promoting delicious sweets, and many other aspects of life.

Nowadays, people and organizations rely way less on traditions and superstition than they
did in the earlier days, and this may not be due to mankind being more rational itself, but
rather because of our ability to understand risk, which allows us to make more informed and
rational decisions.

The opportunity to manage risk, including here the amount and type of risks that the
organizations accept to pursue or retain in order to make forward-looking choices, are key
ingredients that catalyze the progress of the economic system.
RISK
 A situation that exposes someone or something
to danger, harm or loss.
RISK VS. HAZARD
HAZARD
Anything that can cause harm.

RISK
How great the chance that someone will be
harmed by the hazard.
RISK MANAGEMENT

 The identification, evaluation and prioritization of

risks. It is followed by coordinated and economical
application of resources to minimize, monitor and
control probability of unfortunate events to achieve
the desired output.
IDENTIFYING RISK TYPES
 An organization aiming to implement a risk management process should be
aware of all the risk types that have been or can be faced by the
organization while they operate. This can be achieved by considering all of
the past risk registers and identifying whether any risk from the past has
been intertied or is still present. In case the organization does not have risk
registers at all, the top management should provide the risk management
team with enough information on what risks have been faced in the past and
what were their sources. In case the organization has not faced any risk in
the past, they still should identify potential risks so the organization does not
have to suffer any consequences.
TYPES OF RISKS
 Operational risk – the loss resulting from inadequate procedures, policies, and systems
within the organization.
 Financial risk – the process of coping with uncertainties that derive from financial
markets.
 Credit risk - the loss that is generated due to the inability of the counterparty to meet its’
obligations Information technology risk – the operational, financial, and project failures
due to the usage of new technology.
 Integration risk – the negative outcomes triggered by the integration of new processes
and technology, and/or lack of communication.
 Security risk - the losses encountered due to the information security incidents or
physical incidents.
 Legal risk – the risk that emerges because of the inability to comply with the applicable
regulatory obligations.

SOURCES OF RISKS
 Uncertainty in the financial markets
 Threats from project failures
 Legal liabilities
 Credit risk
 Accidents
 Natural causes and disasters
 Deliberate attacks from an adversary
 Events of uncertain or unpredictable root-cause
RISK MANAGEMENT PRINCIPLES
RISK MANAGEMENT OPTIONS

 Avoid: The best thing you can do with a risk is avoid it. If you can prevent it from
happening, it definitely won’t hurt your project.
 Mitigate: If you can’t avoid the risk, you can mitigate it. This means taking some sort of
action that will cause it to do as little damage to your project as possible.
 Transfer: One effective way to deal with a risk is to pay someone else to accept it for
you. The most common way to do this is to buy insurance.
 Accept: When you can’t avoid, mitigate, or transfer a risk, then you have to accept it. But
even when you accept a risk, at least you’ve looked at the alternatives and you know
what will happen if it occurs. If you can’t avoid the risk, and there’s nothing you can do to
reduce its impact, then accepting it is your only choice.
 Avoidance (eliminate, withdraw from or not become involved)
 Reduction (optimize – mitigate)
 Sharing (transfer – outsource or insure)
 Retention (accept and budget)
IMPLEMENTING THE RISK MANAGEMENT PROCESS
 The organization’s risk management process should involve the
systematic application of policies, procedures and practices to the
activities of communicating and consulting, establishing the context and
assessing, treating, monitoring, reviewing, recording and reporting risk.
The main purpose of the risk management process is to enable the
organization to assess the existing or potential risks that may be faced,
evaluate the risks by comparing the risk analysis results with the
established risk criteria, and treat such risks using the risk treatment
options. The organization should use such process in the decision
making process
RISK MANAGEMENT PROCESS

 Establishing the context: When establishing the context, the organization needs to
take into account the organization’s external environment (political, social, etc.) and
internal environment (objectives, strategies, structures, ethics, discipline, etc.). The
organization’s context must be understood before the full range of risks can be
identified. While establishing the context, the organization should define the purpose
and scope of its risk management activities, and determine the objectives of the risk
management process and the specific objectives of risk assessment. Furthermore, the
organization should define the scope and boundaries related to the risk management
process and identify all of the constraints that affect the scope. After identifying the
constraints, the organization should define the risk criteria which will be used during the
whole process.
RISK MANAGEMENT PROCESS
 Risk identification: The identification of risks should be a formal, structured process
that includes risk sources, events, their causes and their potential consequences.
Simply said, risk identification is about the creation of a comprehensive list of risks (both
internal and external) that the organization faces, and can involve input from sources
such as historical data, theoretical analysis, expert options, and stakeholder’s needs.
The risk identification process enables the organization to identify its assets, risk
sources, risk events, existing measures and consequences. By identifying such
elements the organization will be ready to begin the risk analysis process.
 Risk analysis: The organization should analyze each risk that was identified in the
previous step. Based on the level of risk that is determined after the risk analysis, the
organization is able to define whether the risk is acceptable or not. As so, if the risk
turns out to be unacceptable, the organization can take actions to modify the risk to
correspond to the acceptable level of risk
 Risk evaluation: This step offers the organization the opportunity to have a mechanism that
helps them rank the relative importance of each risk, so that a treatment priority can be
established.
 Risk treatment: Proper risk management requires rational and informed decisions about risk
treatment. Typically, such treatments include: avoidance of the activity from which the risk
originates, risk sharing, managing the risk by the application of controls, risk acceptance and
taking no further action, or risk taking and risk increasing in order to pursue an opportunity.
 Remember that organizations do not always find themselves in trouble because of their
excessive and reckless behavior. Sometimes organizations fall behind their competitors as a
result of their reluctance to take risks and pursue opportunities.
 Communication and consultation: Proper risk management requires structured and
ongoing communication and consultation with those affected by the organization’s operations.
The communication seeks to promote awareness and understanding of risk and the means to
respond to it, whereas consultation involves obtaining feedback and information to support
decision-making
 Recording and reporting: Another step of the risk management process based on ISO
31000 is the recording and reporting, i.e. the outcomes of the risk management process are
to be documented and reported through appropriate mechanisms. Recording and reporting is
important for reasons such as communication of the risk management activities and
outcomes pertaining to those activities throughout the organization and providing the
necessary basis and information for making informed decisions.
 Monitor and review: Considering that both the external and internal environments are
subject to constant change, the purpose of this step is to help organizations assure and
improve the quality and effectiveness of the risk management process.
 Monitoring includes actions such as examining the progress of treatment plans, monitoring
the established controls and their effectiveness, ensuring that activities which are proscribed
are being avoided, and checking that the environment has not changed in a way that affects
the risks.
ASSESSMENT

 An activity will be posted on the LMS.

REFERENCES
 Osorno, Rene D. (2019) Risk Management as Applied to Safety Security &
Sanitation. Wiseman's Books Trading, Inc.
 Somoray, Ana Marie M. (2020) Risk Management as Applied to Safety,
Security, & Sanitation. Unlimited Books Library Services & Publishing, Inc.
 Maranan, Jovid Maricar D. et. al. (2018). Risk Management for Tourism and
Hospitality Management. Mindshapers Co., Inc.
 https://pecb.com/whitepaper/iso-31000-risk-management--principles-and-
guidelines