RUNNING HEADER: RISK MANAGEMENT 1

International University of the Caribbean

RISK MANAGEMENT (MAN 413)

Doreen Taylor

October 28, 2019

 2

1. Risk Management Case in Review

In the case presented, it seems that the school does not have a proper risk management system.

This was found base on the facts presented:

1. The school burns debris on the compound.

2. Lack of supervision on the part of the property manager

3. There are no emergency evacuation exit

4. No fire assembly points

5. No fire-fighting equipment (fire hose reels, emergency lighting, fire extinguishers, fire

blankets etc.) available

6. It also seems that the staff does not received training in the use of fire-fighting equipment

7. The driver is an alcoholic

8. The bus driver lacks concentration or attention

9. No valid driver’s licence

10. Dangerous or hazardous driving

11. Lack of training for drivers

Recommendations

The primary objective of risk management is to preserve the operating effectiveness of the

organization, that is, to guarantee that the organization is not prevented from achieving its other

objectives by the losses that might arise out of pure risk (Vaughan & Vaughan, 2007).
 3

Risk identification is the first step in the risk management process. This is where you identify the

relevant risk exposures that can confront the organization. According to Vaughan & Vaughan

(2007), risk identification is one of the most difficult steps in the risk management process. It is

difficult because it is a continual process and because it is virtually impossible to know when it

has been done completely.

The following table presents some of the many methods for identifying risks:

Questionnaire Distributing a questionnaire to staff and volunteers about their observations of

risks and knowledge of risk management procedures. There is every chance that

people within the organization are aware of a risk that has not been previously

identified in any risk management audit. The risk management questionnaire

may serve to prompt memories of specific events or encourage people to voice

their opinion on perceived risks.

Organization's Reviewing the following organization documents may yield information about

Records risks exposures. However, this aspect of risk auditing may be time intensive.

 Minutes of committee meetings

 Event management plans and report

 Policy documents

 Contracts for facilities

 Sponsorship proposals
 4

 Resource agreements with government funding providers

Flowcharting A worthwhile risk identification strategy is to create flow charts for the

organization and delivery of programs, events and services provided by the

organization.

The benefit of a flowchart to the risk identification process is that it identifies

possible ways in which basic processes in sport and recreation management can

be interrupted.

Any interruption to the provision of events, programs and services is a potential

for loss.

Professional Sport and recreation organizations may consider using risk management

Expertise consultants with expertise to identify virtually any risk exposure. However the

services of such consultants may be available only at a significant cost.

On-Site On-site investigations provide opportunities for face-to-face discussions with

Investigations organization personnel. Such discussions may lead to a better understanding of

the extent of risks arising when events and activities do not go as planned. On-

site investigations may also shed light on the frequency with which such

undesirable events occur.

 5

Evaluating the Risk

According to the Austrailian Governement Department of Finance (2016), risk evaluation

determines the tolerability of each risk. Tolerability assists to determine which risks need

treatment and the relative priority. This is achieved by comparing the risk severity established in

the risk analysis step with the risk criteria found in the likelihood and consequence criteria

already defined. At its simplest, an entity might decide that risks above a certain severity are

unacceptable, and risks below this are tolerable. Decisions on tolerability should also be made

after considering the broader context of the risk including the impact of the risk upon other

entities outside of the organization.

According to Hall (2019), there are two ways to evaluate risk. They are:

1. Qualitative Risk Analysis- Qualitative analysis such as rating probability and impact

should always be performed. This allows you to quickly prioritize and rank your risks.

2. Quantitative Risk Analysis- Quantitative analysis is not always performed. This

analysis requires more time but provides more data to aid in making decisions.

The risk manager should also look at the risk management techniques. These include:

1. Avoid risk

2. Transferring risk

3. Share risk

4. Mitigate risk

5. Retain risk
 6

 Avoiding the risk is the process by which you reduce the risk exposure by avoiding or

eliminating the activities. This could mean not burning debris on the school compound

which could cause other problems.

 Transferring the risk is the use of contracts, insurance, disclaimers, and/or releases of

claims to transfer the liability for the expected loss to other parties involved. In this case

the institution should insure it’s property if haven’t already done so.

 Sharing the risk means insuring the office building and inventory with a third-party

insurance company.

 Mitigating the risk includes reduction in the extent of exposure to a risk and / or the

likelihood of its occurrence. This is also called risk reduction. Risk can be reduce in two

ways-through risk prevention and control

 Risk retention is where the risk is retained rather than transferred. This can be planned or

unplanned, funded or unfunded.

Risk Avoidance and Risk Reduction Measures

Risk Avoidance Measures

1. Consider the hazards- Avoid burning grass on the school compound.

2. Employment of driver- Could avoid employment of the driver.

3. Could avoid driving the bus if documents were periodically checked.

4. Could avoid the accident by discontinuing the use of hazardous drugs

 7

Risk Reduction Measures

1. Installation of a sprinkler system illustrates the use of loss control. If a fire starts, the

sprinkler system will limit the damage the fire can cause.

2. Put in place fire-fighting equipment (fire hose reels, emergency lighting, fire

extinguishers, fire blankets etc.)

3. Inspect all fire installations and equipment and serviced as per legal requirements

4. Provide training for staff in the use of fire-fighting equipment

5. Fire extinguishers are fitted and maintained

6. Formally check classroom/immediate work environment to ensure it is safe and free from

fault or defect;

7. Put in place an emergency evacuation plan

8. Communicate the evacuation and plan to all parties and put it in display

9. Identify and mark all fire assembly points

10. Have a minimum of two fire drills per year

11. Make sure that these drills are timed

12. Record outcomes of fire drills and take necessary actions

13. Appoint a school Bus Manager

14. Ongoing vehicle maintenance program

15. Drivers undertake pre-departure checks to ensure the serviceability of vehicle lights,

indicators, brakes, steering etc. and anomalies logged for immediate resolution.

16. Implementation of Drug and Alcohol Program including:

 8

-Information and Training

-Testing Procedures

-Remedial Procedures

-Drug and Alcohol Policy

17. Driver contracted to:

-Report any loss / change to their licence / authorization

-Report any injury or illness (including mental illness) that may affect their fitness to

drive

-Renew their licence / authorization periodically to ensure currency.

-Extra staff allocated for every bus trip so they can provide student supervision.

18. Incident management system in place should an ‘incident’ occur whereby Principal

notified immediately.

19. Drivers instructed to document / report all incidents

20. Provide training for drivers- e.g. Defensive driving course

5. Give your opinion or answers to the questions that ran through the Vice-President’s

mind.

a. How did we ever let this guy drive a college bus? The Vice-President is

probably thinking that he should have never employed this driver, and had he

gotten a driving record and recommendation from previous employer, then he

certainly could have prevented this from happening.

 9

b. Was the school insured for the loss sustained? I am not sure, because it was not

stated in the case presented that they would go to an insurance company to make

claims.

c. Did the college’s lack of a driver training program contribute to the

accident? I believe that the college failed to train the driver, and so that might

have contributed to the accident.

d. What could have been done differently (before, during and after the fire)?

 What I think could have been done differently before the fire is: the school

should have put in place a sprinkler system in the event that the fire

department might take a while to respond. Also, desist from burning

debris on the school compound as perils are likely to occur.

 During the fire, there should have been an alarm system, which should

prompt students and staff to exit the premises.

 After the fire, the management team should meet and implement a risk

management program to prevent this from happening in the future.

In concluding, not all risk can be avoided by any means, but measures must be put in place to

mitigate the likely occurrence of any such risk in the future.

 10

REFERENCES

Austrailian Governement Department of Finance. (2016). Retrieved October 27, 2019, from
https://www.finance.gov.au/sites/default/files/Risk-Management-Process.pdf

Hall, H. (2019). Project Risk Coach. Retrieved from https://projectriskcoach.com/evaluating-

risks-using-qualitative-risk-analysis/

Vaughan, E. J., & Vaughan, T. (2007). Fundamentals of Risk and Insurance. USA: John Wiley&
Son, Inc.