HSC 382 Exam 2 Study Guide
HSC 382 Exam 2 Study Guide HSC 382
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This 5 page Study Guide was uploaded by Helpful on Sunday May 1, 2016. The Study Guide belongs to HSC 382 at Illinois State University taught by in Spring 2016. Since its upload, it has received 8 views. For similar materials see Improving Safety Performance in Nursing and Health Sciences at Illinois State University.
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Date Created: 05/01/16
Exam 2 Chapter 4: Risk Management Risk Management: The process of making and implementing decisions on what will minimize the adverse effects of accidental and business losses on an organization Risk: Probability of harm Harm: Injury, damage, loss of outcome, failure to meet objectives Hazard: Potential sources of harm Residual Risk: Risk that remains after assessment and mitigating controls Acceptable Risk: The risk where probability and severity of harm are determined to be acceptable to the organization As Low as Reasonably Practical: The point at which the cost involved to reduce risk further would be substantially disproportionate to the benefit gained. Risk Assessment: The process where hazards are identified and the level of risk is determined through qualitative or quantitative analysis. The Risk Management Process: 1. Identify & Analyze Risk Exposures a. Systematic identification methods (surveys, questionnaires, financial statement, business flowcharts) b. Analyze to determine impacts 2. Examine Alternative Risk Management Techniques a. Risk Control: Reduce the frequency or severity of losses & include traditional safety activities i. Avoidance ii. Loss prevention: reduce the frequency iii. Loss Reduction: reduce the severity iv. Segregation of exposure units 1. Store items in 2 places 2. Executives travel in separate planes v. Risk Transfer: contract with someone (legal & financial) b. Risk Finance: Transfer the financial responsibilities to another party i. Insurance, fund loss reserve, line of credit 3. Select The Best Technique a. Best long term overall net cost & meet the organizations risk tolerance b. Consider costs and timing of costs c. ALARP 4. Implement Technique a. Requires commitment & cooperation from all affected business areas 5. Monitor Results and Improve a. Set performance standards b. Compare results to standards COSO: Committee of Sponsoring Organizations - Helps businesses improve their internal control mechanisms Categories of Risk: Casualty Risks: Fire, liability, employee injury & business interruption Liquidity Risks: Ability to have enough cash for the business to normally operate (financial risk) Credit Risk: Ability to borrow needed funds at acceptable rates (financial risk) Currency Risk: fluctuating rates in various countries currency (financial risk) Market Risk: Inability to buy or sell products & services & interact with suppliers & customers in the usual markets. (operational risks) Political Risks: Adverse action from governments which may restrict or curtail business activities or seize assets (operational risks) Traditional Risks: Safety, health, environmental issues (operational risks) Technological Risks: Failure to keep up with competitors Compliance Risks: Violating laws, regulations, internal policies, ethical standards Reputational Risks: Events damage organizations reputation & its influence in the market Enterprise Risk Management Categories: - Strategic o Industry changes, competitors, consumer demand, partnerships - Operational o Market Risk, political risk, traditional risk - Financial o Liquidity risk, credit risk, currency risk - Reputational o Events damage company’s reputation (loss of customer, revenue) (carnival cruise) - Technology o Failure to keep up with or recognize emerging technologies (Kodak, blockbuster) - Legal & Regulatory o Regulations (new regulations will change how you do business? o Litigation (potential sources of lawsuits) ANSI Z690 Risk Management: - First US risk management consensus standard in 2011 - Adopted ISO 31000 - 3 main sections (Principle, Framework, Process***) Risk Assessment Process: 1. Identify Hazards 2. Identify Risk Factors 3. Determine Risk 4. Select Control Measures 5. Continually look for new Control Measures Chapter 5 Risk Assessment Risk Identification: The process of finding, recognizing and describing risks Risk Analysis: The process to comprehend the nature of the risk & the level of risk (Likelihood, frequency, Exposure, Consequence, Probability) Risk Evaluation: The process of comparing the risk analysis with risk criteria to determine whether the risk is acceptable or tolerable. Risk Treatment: The process of modifying the risk Risk Register: The record of information about identified risks Cumulative Risk: occupational, environmental, societal, individual risks (Zika Virus, mumps, landfill) Goals of Risk Assessment: - Identify hazards - Assess the risks from these hazards - Evaluate controls that reduce the risk - Reduce risks to an acceptable level - Document the results Levels of OHS Risk Assessment: - High (effectiveness of program, identifies system deficiencies, prioritize efforts) - Operational (specific task or process, appropriate to nature of hazard & level of risk - Personal Move from compliance based to risk based thinking Systematic Method: - Repeatable: The process must be able to effectively categorize risks - Objective: The process must eliminate subjective evaluations that are based on perceptions, bias, and other human factors - Consistent: Multiple assessments with the same risk factors must deliver the same outcome results. Types of Risk Assessment Techniques: - Delphi, Environmental Risk Assessment, Business Impact Analysis, Root cause Analysis Risk Assessment Process: 1. Identify Risks a. Risk Register b. Risk Statement i. Briefly describe the nature of the risk ii. Each risk category can have multiple risk statements iii. Statement highlights what types of failures could produce risk 2. Identify Risk Factors a. Type – what type of risk is it? b. Impact – how bad can it be? c. Likelihood – how often can it happen? 3. Determine Inherent Risk a. What would happen if no controls were in place? b. Combination of impact and likelihood 4. Evaluate Control Measures a. Determine control type b. Determine control rating 5. Determine Residual Risk a. Level of risk after controls are in place b. Different methods can be used to determine effectiveness of controls c. Residual risk i. Inherent risk rating + Controls Rating / 2 Agencies Requiring Risk Assessments: - ANSI Z10, European Union, MIL STD-882E, ANSI B11 Machine Safety, OSHA Process Safety, EPA Superfund Risk assessments transform safety thinking. Acceptable risk & tolerable risk levels depend on many factors Chapter 6 Measures & Metrics Performance Indicators: Track the types of activities that make a difference in actual safety performance Measures: The general category of what is being looked at Metrics: The specific ways to quantify and report on a measure Good Measures: - Designed to continually improve safety culture - Drive specific behaviors & activities - Measureable - Easy to understand Poor Measures: - Disconnect between measures & results - Manipulated to show desired results without affecting true results - Measure activity, not progress Leading Measures: Predict future outcomes (measure actions, behaviors, processes, things people do for safety) Categories of Leading Measures: - Safety Management System o Audits, Risk Assessments, Training - Employee o Observable behaviors & performance - Supervisor o Safety communication o Observations & inspections o Accident investigations - Management o Visibility o Engagement in process o Employee perceptions Positive Leading Measures: - They evaluate the process before a final outcome - Allows organization to make changes - Measuring positive actions Limitations Leading Measures: - Validity - Ease of use Lagging Measures: Look at the results after they have occurred (OSHA Incidence Rate, Lost time injury rates, injury cost) Positive Lagging Measures: - Easily understood - Easy to compare - Statistically valid Limitation Lagging Measures: - Luck, manipulation, limited precision, reactive Develop Effective Measures: - Customize by site - Prioritize based on risk assessment - Involve employees in developing measures and goals - Develop measures to specifically improve safety culture Trailing measures have value - Results oriented & easily understood Trend Analysis: - Helps to explain variability of results Rolling Averages - Smooth out ups & downs - Calculates average for previous number of time periods Connecting Leading Measures with Results: - (+1.0) means both variables move in the same direction all of the time - (-1.0) means they move in the opposite direction all of the time Balanced Scorecard: - Financial o Accident costs, worker’s compensation costs - Customer knowledge o Illness & injury rates, industrial hygiene exposures - Internal business processes o Safety Management System Assessment Scores, Management System Improvement Initiatives, Risk Reduction Scores - Learning & growth o Training completion & reduction, Conformance with significant controls, Inspections & observation data, Compliance with audit results Scorecard Risk Levels: - High/Intolerable Risks: Represent imminent danger and should be stopped immediately - Medium Risks: Should be prioritized for business-level risk reduction measures, through implementation of more effective control or more detailed task-based assessment & identification of control. - Low/Tolerable Risks: Considered controlled to minimize harm. Business levels can still consider risk-reduction strategies & objectives
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