RISK

MANAGEMENT
AS APPLIED TO
SAFETY,
SECURITY, AND
SANITATION
COMPILED BY: HERZEN JAN M. LOFRANCO
CHAPTER 2
RISK
MANAGEMENT
PROCESS
 CHAPTER 2: RISK MANAGEMENT PROCESS

The risk management process involves 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.

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 CHAPTER 2: RISK MANAGEMENT PROCESS
Risk Assessment
The risk management process involves
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.
 CHAPTER 2: RISK MANAGEMENT PROCESS
Risk Identification

It is the identification of potential risk that may endanger human live

and property. Any injuries or illness, or loss of property may pose a threat
and liabilities. The purpose of risk identification is to find, recognize and
describe risks that might help or prevent an organization achieving its
objectives.

The organization should identify risks, whether or not their sources are
under its control. Consideration should be given that there may be more
than one type of outcome, which may result in a variety of tangible or
intangible consequences.
 CHAPTER 2: RISK MANAGEMENT PROCESS
Risk Analysis

The purpose of risk analysis is to understand the nature of

risk and its characteristics including, the level of risk. Risk
analysis involves a detailed consideration of uncertainties,
risk sources, consequences, likelihood, events, scenarios,
controls and their effectiveness. An event can have multiple
causes and consequences and can affect multiple objectives.
Scrutinize the identified risk and use the information as the
basis for calculating the risk level.

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CHAPTER 2: RISK MANAGEMENT PROCESS
 CHAPTER 2: RISK MANAGEMENT PROCESS
Likelihood:

Almost certain – will occur in most circumstances when the

activity is undertaken (greater than 90% chance of occurring)
Likely – will probably occur in most circumstances when the
activity is undertaken (51 to 90% chance of occurring)
Possible – might occur when the activity is undertaken (21 to
50% chance of occurring)
Unlikely – could happen at some time when the activity is
undertaken (1 to 20% chance of occurring)
Rare – may happen only in exceptional circumstances when
the activity is undertaken (less than 1% chance of occurring)
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Consequence:

Insignificant – first aid treatment, minor injury, no time off

work.
Minor – single occurrence of medical treatment, minor
injury, no time off work.
Moderate – multiple medical treatments, not permanent,
serious or permanent injury/illness, greater than 10 days off
work.
Severe – severe injury/illness requiring life support, actual
or potential fatality, greater than 250 days off work.
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 CHAPTER 2: RISK MANAGEMENT PROCESS
Risk Evaluation

Risk evaluation is a procedure that is used to compare risk

analysis results with risk criteria in order identify whether or
not a specified level of risk is acceptable or tolerable
(Ricaforte 2020).
 CHAPTER 2: RISK MANAGEMENT PROCESS
Risk Evaluation
The purpose of risk evaluation is to support decisions. Risk evaluation
involves comparing the results of the risk analysis with the established risk
criteria to determine where additional action is required. This can lead to a
decision to:
·do nothing further;
·consider risk treatment options;
·undertake further analysis to better understand the risk;
·maintain existing controls.
Decisions should take account of the wider context and the actual and
perceived consequences to external and internal stakeholders. The outcome
of risk evaluation should be recorded, communicated and then validated at
appropriate levels of the organization.
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 CHAPTER 2: RISK MANAGEMENT PROCESS
Risk Evaluation Matrix
According to
Cuskelly and Auld as cited by Ricaforte, there is a risk
evaluation matrix that contains management response options referring to the
level of identified risk which include risk retention, risk transfer, risk
reduction, and the risk avoidance.
 CHAPTER 2: RISK MANAGEMENT PROCESS

Risk retention is where both the frequency and severity of risk is low,
risk is often retain. Retention is either passive like risks are being
retained by business operator without the knowledge that they are
occurring, or active like where risk is identified and a decision is made
to retain and pay for any losses from the business operator’s own
resources (Ricaforte 2020). As cited by Maranan [Link]. (2018), the
company would have to pay for the losses from the risk out of their own
reserve fund thus it should it decide to retain the risk. The company
should assure that it is financially capable in dealing with the retained
risk. Companies would usually retain risk if they would find it
impractical to apply for insurance because of a relatively high amount
of premium for such matter.
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Risk transfer is when the frequency of risk potential is low, but the
severity of a potential incident is high, the most common and
traditional approach to risk management is transferring accountability
to other parties. It is when the burden is being shifted from one party to
another, from individuals to another individual, from individuals to an
insurance company. Risk transfer encompasses the contractual shifting
of real risk from one party to another.
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Risk reduction is where the severity of a potential risk remains low,

but the overall frequency of risk is increasing. Management need to
consider ways of reducing their exposure.
 CHAPTER 2: RISK MANAGEMENT PROCESS
Reduction of risk level can be achieved through the implementation of
precautionary measures, risk controls or treatments. The exercise of risk reduction
may consider any of the following:

1. Observance of the safety standards.

2. Use safety devices.
3. Earthquake-proof building/extensive training given i.e. food safety, waste
management, cleaning and sanitizing
4. Qualification requirements like getting qualified tour guides, adventure trek
leaders and drivers.
5. Providing PPE necessary to avoid contact to biological and chemical hazards.
6. Training for disaster preparedness.
7. Training in handling work related injuries.
8. Regular workplace inspections to identify situations likely to cause/facilitate loss
of property or stocks.
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Observance of the safety standards. The tourist accommodation
providers are duty bound to assure the health and safety of the guests
while they are on their premises. The said responsibilities extend not
only to guests but as well to the staff and anyone on the premises.

Precautionary measures may include but not limited to the following;

1. Removal of risks and obstructions that may cause the slipping,
tripping, and falling of the guests.
2. Assurance of the fitness of the furnishings for guest accommodation;
3. Making sure that the appliances are safe to use;
4. Giving orientation to the guest about the emergency procedures;
5. Attendance at all the needs of the guests.
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Use of safety devices. Risk are always attached to activities which is

relevant in tourism. Tourist feel a great sense of safety and security
through specific physical and behavioral devices such as deadbolt
locks, closed-circuit TV cameras, doors viewports caller screening by
telephone operators.
 CHAPTER 2: RISK MANAGEMENT PROCESS

Risk avoidance is where frequency and severity of risk potential are

both high, business owners should consider withdrawing a program or
activity. It is a common understanding that it would be hazardous on
the part of tourism operators to continue the conduct of their business
even in the occasions of impending jeopardy given the poor weather
conditions.
 CHAPTER 2: RISK MANAGEMENT PROCESS

According to the Risk Assessment Methodology from The University

of Melbourne, there are two important risk that must be realized;
inherent risk and residual risk.

Inherent risk is the level of risk that an activity/hazard category

would pose if no controls or mitigating factors done.

Residual risk is the level of risk associated with an activity after

proposed/additional controls have been implemented to further
eliminate or reduce the risk.
 CHAPTER 2: RISK MANAGEMENT PROCESS

Risk Monitoring
To get outstanding results after thorough planning, monitor the
progress and success of the plan then progress present and future
management of results, outcomes and impact. Continuous monitoring
and control keeps the tract of the identified risk, residual risk and new
risks.
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Recording and Reporting

The risk management process and its outcomes should be
documented and reported through appropriate mechanisms. Recording
and reporting aims to:
1. Communicate risk management activities and outcomes across the
organization;
2. Provide information for decision-making;
3. Improve risk management activities;
4. Assist interaction with stakeholders, including those with
responsibility and accountability for risk management activities.

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Recording and Reporting

Reporting is an integral part of the organization’s governance and
should enhance the quality of dialogue with stakeholders and support
top management and oversight bodies in meeting their responsibilities.

Factors to consider for reporting include, but are not limited to:
1. Differing stakeholders and their specific information needs and
requirements;
2. Cost, frequency and timeliness of reporting;
3. Method of reporting;
4. Relevance of information to organizational objectives and decision-
making.
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Thank You