Flashcards in 8. Risk Management And The Roles Of HRM (Week 6) Deck (10)
What is risk management?
1. Coordinated activities to direct and control an organisation with regard to risk
2. International Standard for Risk ISO31000
What is the risk management process (5)?
1. Establish context
2. ID Risks
3. Analyse Risks
4. Evaluate Risks
5. Treat Risks
Ongoing: monitor and review, communicate and consult
What are the approaches to risk (4)?
1. Technical approach
2. Economic approach
3. Cultural theory approach
4. Psychometric approach
What is the technical approach to risk?
1. origins in engineering and hard sciences where Risk = probability x magnitude
2. Assumes rationality where acceptable risks are matters of engineering judgement
3. Risk management involves: measurement of all risk components and then imposing managerial control; regulatory frameworks including external legistlation and compliance, inspections or audits as well as internal mechnisms such as company policy or rules
What is the economic approach?
1. Emphasis on cost / benefit of the risk rather then elimination of harm
2. Tools and techniques used include cost benefit analysis expressed in monetry values. However depends on all relevant consequences being valued. How do you value human life?
What is the cultural theory approach?
1. Adopts an anthropological framework for understanding how groups in society interpret danger and build trust in institutions that create or regulate risk
2. Thus risk is essentially a social / cultural phenomone. Risk handling styles will correspond with a cultural group and their associated lifestyle. This is useful in understnading attitudes to risk at the organisational and country level
What is the psychometric approach?
Develops ideas from prospect theory to incorporate biases used by lay people in estimating risks such as availability, overconfidence and desire for certainty
What are the HR responses to risk management (6)?
1. An active and personal involvement from senior management on a routine basis
2. Open communication links between workers and management
3. A stable workforce with good industrial relations procedures
4. Workforce empowerment to take responsibility for safety
5. A strong emphasis on training and
6. The ongoing collection of safety data
What are the characteristics of a crisis event (6)?
1. high ambiguity with unknown causes and effects
2. Low probability of occuring
3. An unusual or unfamiliar even
4. requires rapid response
5. Poses a serious threat to the survival of the organisation and its stakeholders
6. Presents a dilemma necessitating a decision that will result in positive or negative change