Chapter 3 C: Risk

Management
CLO4 Analyze the social and environmental
implications of technological developments
including sustainable developments, risk
management and OSH issues.
Last class- recap
Project management:
1. Has a specific goal.
2. Has a set of different activities to do.
3. Has a definite start and finish date.
4. Consumes resources.
5. Has uncertainty and risk.
6. Unique in some way.
2
 Today’s class

1.Risk assessment
2.Examples
3.Management
 What is Risk?

• Risk is an unwanted negative consequence of

an event of which the possible undesirable
outcome can be identified, predicted and
quantified.
• Uncertainty is an unknown situation, where
its possible outcome cannot be analysed or
predicted. E.g. weather uncertainty.
 What can you do about Risk?
• Risk lends itself to statistical analysis.
• Risk can be statistically analysed for
being prepared to face it.
• The methods of resolving risks are by:
1. eliminated,
2. reduced,
3. transferred to a third party at a cost and
4. managed for a profit.
 A Sampling on Potential Risks
• Alcoholic beverages • Nuclear power

• Food preservatives • Pesticides

• Handguns • Power mowers

• Motor vehicles • Smoking

• Mountain climbing • Surgery

 Risk These include:
Management 1. Finance and
practices are Investment
widely used in 2. Insurance
public and the 3. Health Care
private sectors,
4. Public Institutions
covering a wide
range of 5. Governments
activities or 6. Construction
operations. 7. Research center and
Source: UNCTAD 2000
8. Any industries
RISK = LIKELYHOOD X CONSEQUENCE

INPUT--- PROCESS --- OUTPUT

 Subjective Factors in the
Determination of Risk
1. Extent to which risk 6. Whether the victims
appears controllable are especially
2. Whether the risk is sympathetic and
feared, even dreaded vulnerable
3. Extent to which the 7. Extent to which risk is
risk is imposed rather new and unfamiliar
than assumed 8. Extent and type of
4. Extent to which risk is media attention
easily observable 9. Extent to which the
5. Whether the risk is information source is
natural, not manmade trusted
 The risk assessment sequence

Source: M.R. Willis and A.A. Keller, J. Environ. Mgt., 83, 213-227, 2007.
 What is Risk Management (R.M)?

• Good management practice

• Process steps that enable improvement
in decision making
• A logical and systematic approach
• Identifying opportunities
• Avoiding or minimising losses

Source: UNCTAD 2000

 Risk Management is the name given
to a logical and systematic method
of identifying, analysing, treating
and monitoring the risks involved in
any activity or process.

Risk Management is a
methodology that helps managers
make best use of their available
resources

Source: UNCTAD 2000

 Risk Management
The identification, analysis, assessment, control,
and avoidance, minimization, or elimination of
unacceptable risks.

An organization may use risk assumption,

risk avoidance, risk retention, risk transfer,
or any other strategy (or combination of strategies)
in proper management of future events.
 The purpose of studying R.M.

To develop the capability to identify, assess,

improve and limit risk in the management and
practice of engineering through the application
of concepts and tools of risk engineering.

On completion, you will be able to identify

hazards in an engineering project and
design an appropriate risk management
strategy.
 The Risk Management process steps are a
generic guide for any organisation, regardless
of the type of business, activity or function.

There are
7 steps
in R.M
process

Source: UNCTAD 2000

The basic process steps are:
1. Establish the context

2. Identify the risks

3. Analyse and evaluate the risks

4. Treat the risks

5. Create elimination/ improvement plans

6. Implement the plans

7. Review and Evaluate the plans

https://www.youtube.com/watch?v=-E-jfcoR2W0&t=1s
 Summary
• Experts and the public evaluate risk differently
• Familiar risks can be much more potentially
hazardous than unfamiliar ones
• Risks to humans and the environment are real,
and should be carefully evaluated, taking
human perception into account
International Standards Organization, ISO:
https://www.iso.org/standards.html

1. ISO 31000:2018 RISK

MANAGEMENT Guidelines

2. IEC 31010:2019 Risk management

— Risk assessment techniques
(IEC, International Electrotechnical
Commission)