Impact Of People On Risk Management In Complex Organizational Environments

Case study

Risk is a term that is commonly used to refer the aspect of potential gaining or losing something that is of great importance and value. The component to be lost or gained is usually considered to be of great value. Risk usually creates an environment of uncertainty and unlikelihood (Cardona, 2013 p.93).
People within an organization can have some amount of impact on risk management that could actually prevent a project from succeeding in different operating environments such as in a complex, dynamic or even a networked working environment. Basing our argument on this mentioned statement, this write up is set to expound on a number of factors regarding to risk management and the impact that people within an organization can prevent a project from producing the expected results or even succeeding. In regard to that, risk perception will come into play since risk management and the success or failure of a project depends on one way or another on risk perception (Hull, 2012 p.74).

The project analyses the concept of risk management and risk analysis in different organization. Have decided to use Woolworths Company which runs more than 900 supermarkets and groceries in Australia (Hull, 2012 p.114) .The concept explains on the functions of risk management in any given organization. The project analyses how risk management is handled in the company and how it works to enhance performance. The roles include; 

a.Making a commitment to risk management and this simply involves selecting a member within the organization who would be responsible in a certain process.
bCreating a team whose purpose would be that of risk management. The team can consist of stakeholders, employees or even some other out-sourced persons.
c.Setting up a committee that would be responsible for carrying out the risk management and then report to the created team.
d.Communication, this involves communicating the risk management strategies to the other members of the organization.
e.Monitoring and constantly reviewing the risk management plan.

Risk management is a systematic process that involves the identification of risks in an organization or any setting for that matter and also developing ways to minimize the risks (Saunders& Allen, 2010 p.131). Its main purpose has been known to be that of identifying the most important risk to that organization of interest. Through the identification of this important risk, the organization can then allocate resources to deal with that risk appropriately. Risk management is considered very important in an organization because when risks are not properly managed then there is a threat that they would negatively affect the key aspects in an organization and its success in general (Rejda, 2011 p.54).

Risk Management

People within an organization should therefore develop a risk management framework whose sole purpose is to oversee the risks and make decisions on how to handle the risks. There is a process that needs to be followed in risk management. This process is not fixed for every organization. It varies depending on the organization and its nature. The following shows the general risk management processes; 

It is important to note that in as much as risk management focuses on what is likely to go wrong, there are at times that circumstances can provide a means through which opportunities can be created.

The people within an organization have an impact on the success of a project. This is often reflected on their ability to create risk management frameworks and tools that are likely to sustain a project. The people within an organization should therefore ask themselves a number of questions regarding the risks that the project is likely to face (Wachinger, Renn, Begg, Kuhlicke, 2013 p.51).

The following are some of the questions that people in an organization should be asking themselves regarding risk management.

a.What unexpected things are likely to happen?
b.What impact would they have on the project
c.What can the organization do about this impending danger
d.How are we going to communicate to the rest of the organization?

Risk communication is very important in an organization and it should be taken seriously. It is the communication of the risk that is going to make people alert in an organization and make them prepare accordingly for the impending danger that is likely to come. Risk communication should not only be an internal affair, it should also involve the public. The public should be made aware about the risk. Through risk communication, then the organization and its members would know what is at stake and thus take an appropriate action towards dealing with that situation (Rhodes & Pivik, 2011 p.201).

Risk perception is often defined as that judgment that is often subjective and is made by people about a risk and some of its characteristics. It revolves around the perceptions and estimates that people have about the likelihood of occurrence of a certain risk. Risk perception is often preceded by risk assessment. It is after the assessment of a certain risk that individuals give their perceptions and estimates about the risk (Thun & Hoenig, 2011 p.101).The public perception of a certain risk is usually considered to be very important and it puts both the organization and the general public on toes. It is the perception that usually acts as a guide and studies have shown that risk perception is considered as part of risk management. Public perception about a certain risk is driven by a number of things such as the technology involved in the project, the threat that the technology is presenting to the public both at the current moment and in the nearby future and most importantly the uncertainty of the risk truly occurring. All these factors put into consideration makes the public have a say or maybe an estimate about a certain risk (Slovic, 2010 p.117). 

Risk Perception

In risk perception there are a number of factors that come into play. These factors are explained below;

a)Familiarity-This involves an analysis on whether the impending risk is old or new. Whether science and technology understands the risk or not, or if the risk is something that the public encounter and deals with it on a daily basis or not (Aula, 2010 p.67).

b)The number of people exposed to the risk-This refers to the total or may be at times the approximate number of people that are likely to be affected by the impending risk in case it happens.

c)Dread-This comprises of things such as the emotional reactions that arise once the public gets to know about the risk, the threat that the risk is presenting to the future generations.

The ranking on each of these factors is computed and the location of the impending risk on each of them is identified (Sjoberg, 2013 p.99).
The other possible framework that can be used to understand the perception of the public about a certain risk is usually dependent on understanding the difference and at times the similarities between effective and distinction thought. Well, an analytical thought refers to what the experts and the persons in charge practically do in the formal process of risk assessment. It has been known to be a measure that involves the application of various mathematical methods and models in the development of a quantitative estimation of risk (Bearth, Cousin, Siegrist, 2014 p.89).

The effective thought on the other hand is a measure that is considered to be emotional in nature. For quite some time now, the affective thought has been regarded as a means of dealing with a large number of risk that are likely to happen and the resources available are scarce to study and apply mathematical methods. The analytical thought has always been considered to the most accurate method (Covello, McCallum, Pavlova, 2012 p.101). 

A project is usually conducted in different operating environments; complex, networked and the dynamic operating environments. The complex operating environment has been known to host most military operations. It is therefore the responsibility of the officer in charge to analyze and evaluate options based on both the limitations and the capabilities of only the available resources at the moment (Covello et al, 2012 p.161).It is the role of the planners to identify the simplest elements of a risk that the officer in charge must put into consideration or assume so as to obtain positive results. There are always compromising factors in such operating environments but it is the task of both the planner and the officer in charge to get past the compromising factors because at times the life’s of the entire team is dependent on it. The members of that particular unit also need to be made aware about the impending risk so that they can have an opinion on it

(Zipkin,Umscheid,Keating,Allen,Aung,Beyth,Kaatz,Mann,Sussman,Korenstein,Schardt,2014 p.322). Organizations have to make decisions regarding the implementation of certain projects. These projects survival and success depend so much on the decisions that are made (Fagerlin, Zikmund, Ubel, 2011 p.117). Certain initiatives should therefore be put in place to ensure that the decisions made do not have any negative consequences on the project to be implemented. The environment under which both the decision to be made and the project to be implemented is very crucial here; One, the environment should not be unfavorable. It should be in position to support the project and its implementation (Djebali,Davis, Merkel, Dobin, Lassmann, Mortazavi,Tanzer, Lagarde, Lin, Schlesinger,Xue, 2012 p.301).

Conclusion

The workers in Woolworths Company have the challenge of ensuring that the project to be implemented succeeds. For a project to be successful, planning is very crucial. It is the people in an organization that should plan .A comprehensive plan are important because it makes a project seem successful from the very start. All the people in an organization should therefore be on board during the planning process, the sets the alert and keeps then on track on where the goals of the project are and the direction with which the project is taking (Luhmann, 2017 p.203).

References

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