Assessing risk in dynamic situations:lessons from fire service operations

Fire Service personnel face risk on a daily basis, frequently working in extremely hazardous conditions—and the severity of the danger faced can fluctuate rapidly. The Fire Service has therefore become extremely experienced at managing dynamic risks. The aim of this article is to review techniques used in the UK fire service to attenuate the effects of risk and to discuss these with respect to organisations which experience dynamic risk in other fields—even if in less dramatic conditions.

Quality risk in global supply network

Purpose - The rise of recent product recalls reveals that manufacturing firms are particularly vulnerable to product quality and safety where goods and materials have been sourced globally. The purpose of this paper is to explore the issues of quality and safety problems in global supply networks, and introduce a supply chain risk management (SCRM) framework to reduce the quality risk. Design/methodology/approach - A conceptual SCRM framework for mitigating quality risk is developed. In addition, four SCRM treatment practices are proposed by consolidating the empirical literature in the operations management and supply chain management areas. The general feasibility was discussed based on literature. Findings - The research has identified the root causes of the recent product recalls and a series of product harm scandals ranging from automobiles to unsafe toys. Supply chains are extended by outsourcing and stretched by globalization, which greatly increase the complexity of supply networks and decrease the visibility in risk and operation processes. Originality/value - The paper identifies four SCRM practices, and proposes two distinct antecedents that can prompt the effectiveness of SCRM. © 2011 Emerald Group Publishing Limited. All rights reserved.

Bottom-up risk regulation? How nanotechnology risk knowledge gaps challenge federal and state environmental agencies

Nanotechnologies have been called the "Next Industrial Revolution." At the same time, scientists are raising concerns about the potential health and environmental risks related to the nano-sized materials used in nanotechnologies. Analyses suggest that current U.S. federal regulatory structures are not likely to adequately address these risks in a proactive manner. Given these trends, the premise of this paper is that state and local-level agencies will likely deal with many "end-of-pipe" issues as nanomaterials enter environmental media without prior toxicity testing, federal standards, or emissions controls. In this paper we (1) briefly describe potential environmental risks and benefits related to emerging nanotechnologies; (2) outline the capacities of the Toxic Substances Control Act, the Clean Air Act, the Clean Water Act, and the Resources Conservation and Recovery Act to address potential nanotechnology risks, and how risk data gaps challenge these regulations; (3) outline some of the key data gaps that challenge state-level regulatory capacities to address nanotechnologies' potential risks, using Wisconsin as a case study; and (4) discuss advantages and disadvantages of state versus federal approaches to nanotechnology risk regulation. In summary, we suggest some ways government agencies can be better prepared to address nanotechnology risk knowledge gaps and risk management.

A flexible cost function model with risk

In examining bank cost efficiency in banking inclusion of risk-taking of banks is very important. In this paper we depart from the standard modeling approach and view risk intimately related to the technology. Thus, instead of controlling for risk by viewing them as covariates in the standard cost function we argue that the technology differs with risk, thereby meaning that the parameters of the parametric cost function changes with risk in a fully flexible manner. This is accomplished by viewing the parameters of the cost function as nonparametric functions of risk. We also control for country-specific effects in a fully flexible manner by using them as arguments of the nonparametric functions along with the risk variable. The resulting cost function then becomes semiparametric. The standard parametric model becomes a special case of our semiparametric model. We use the above modeling approach for banks in the EU countries. Actually, European financial integration is seen as a stepping stone for the development of a competitive single EU market that promotes efficiency and increases consumer welfare, changing the risk profile of the European banks. Particularly, financial integration allows more risk diversification and permits banks to use more advanced risk management instruments and systems, however it has at the same time increased the probability of systematic risks. Financial integration has increased the risk of contagion and changed its nature and scope. Consequently the bank’s risk seems to be an important issue to be investigated.

Real options in multinational decision-making:managerial awareness and risk implications

This paper addresses the theme of real options decision-making in multinational corporations (MNCs) and stresses the role of real options attention and managerial learning in company performance. Using a sample of 278 large MNCs with categorised degrees of managerial real options awareness, we examine the risk implications of switching options in multinational operations, and explore the extent to which the real options logic can be classified as “best practice” in decision-making and risk management. Our results reveal that MNCs which have high managerial awareness about their real options are able to reduce their downside risk through multinationality, organisational slack and other firm characteristics. This finding does not apply fully to MNCs without evidence of such an awareness. Also, although real options awareness does not systematically guarantee lower downside risk from operations, supplementary results indicate that MNCs with evidence of significant investment in the acquisition of real options knowledge tend to outperform competitors that are unaware of their real options. This suggests that if real options are explored and exploited appropriately, real options decision-making can result into superior performance for MNCs in the long-term.

Development of a risk-oriented strategic sourcing (ROSS) framework for the construction and electronics manufacturing industries

Strategic sourcing has increased in importance in recent years, and now plays an important role in companies’ planning. The current volatility in supply markets means companies face multiple challenges involving lock-in situations, supplier bankruptcies or supply security issues. In addition, their exposure can increase due to natural disasters, as witnessed recently in the form of bird flu, volcanic ash and tsunamis. Therefore, the primary focus of this study is risk management in the context of strategic sourcing. The study presents a literature review on sourcing based on the 15 years from 1998–2012, and considers 131 academic articles. The literature describes strategic sourcing as a strategic, holistic process in managing supplier relationships, with a long-term focus on adding value to the company and realising competitive advantage. Few studies discovered the real risk impact and status of risk management in strategic sourcing, and evaluation across countries and industries was limited, with the construction sector particularly under-researched. This methodology is founded on a qualitative study of twenty cases across Ger-many and the United Kingdom from the construction sector and electronics manufacturing industries. While considering risk management in the context of strategic sourcing, the thesis takes into account six dimensions that cover trends in strategic sourcing, theoretical and practical sourcing models, risk management, supply and demand management, critical success factors and the strategic supplier evaluation. The study contributes in several ways. First, recent trends are traced and future needs identified across the research dimensions of countries, industries and companies. Second, it evaluates critical success factors in contemporary strategic sourcing. Third, it explores the application of theoretical and practical sourcing models in terms of effectiveness and sustainability. Fourth, based on the case study findings, a risk-oriented strategic sourcing framework and a model for strategic sourcing are developed. These are based on the validation of contemporary requirements and a critical evaluation of the existing situation. It contemplates the empirical findings and leads to a structured process to manage risk in strategic sourcing. The risk-oriented framework considers areas such as trends, corporate and sourcing strategy, critical success factors, strategic supplier selection criteria, risk assessment, reporting, strategy alignment and reporting. The proposed model highlights the essential dimensions in strategic sourcing and guides us to a new definition of strategic sourcing supported by this empirical study.

Understanding supply chain disruption risk with the aid of social networks and information flows analysis

Supply Chain Risk Management (SCRM) has become a popular area of research and study in recent years. This can be highlighted by the number of peer reviewed articles that have appeared in academic literature. This coupled with the realisation by companies that SCRM strategies are required to mitigate the risks that they face, makes for challenging research questions in the field of risk management. The challenge that companies face today is not only to identify the types of risks that they face, but also to assess the indicators of risk that face them. This will allow them to mitigate that risk before any disruption to the supply chain occurs. The use of social network theory can aid in the identification of disruption risk. This thesis proposes the combination of social networks, behavioural risk indicators and information management, to uniquely identify disruption risk. The propositions that were developed from the literature review and exploratory case study in the aerospace OEM, in this thesis are:- By improving information flows, through the use of social networks, we can identify supply chain disruption risk. - The management of information to identify supply chain disruption risk can be explored using push and pull concepts. The propositions were further explored through four focus group sessions, two within the OEM and two within an academic setting. The literature review conducted by the researcher did not find any studies that have evaluated supply chain disruption risk management in terms of social network analysis or information management studies. The evaluation of SCRM using these methods is thought to be a unique way of understanding the issues in SCRM that practitioners face today in the aerospace industry.

Managing risk in enterprise resource planning projects

Enterprise Resource Planning (ERP) projects are strategic and capital intensive, so failure may be costly and even cause bankruptcy of companies. Previous studies have proposed ways for improving implementation, but they are mostly generic and follow standardized project management practices as specified in various standards (e.g. the “project management body of knowledge” of the Project Management Institute). Because ERP is interdisciplinary (involving change management, project management and information technology management), it warrants a customized approach to managing risks throughout the life cycle of implementation and operation. Through a practical case study, this paper demonstrates a qualitative, user friendly approach to ERP project risk management. Firstly, through a literature review it identifies various risk factors in ERP implementation. Secondly, the risk management practices of a UK-based multinational consulting company in one of its clients are evaluated. The risk factors from the case study organization and literature are then compared and discussed.

Managing project risk using combined analytic hierarchy process and risk map

The main purpose of the study is to develop an integrated framework for managing project risks by analyzing risk across project, work package and activity levels, and developing responses. Design/methodology/approach: The study first reviews the literature of various contemporary risk management frameworks in order to identify gaps in project risk management knowledge. Then it develops a conceptual risk management framework using combined analytic hierarchy process (AHP) and risk map for managing project risks. The proposed framework has then been applied to a 1500 km oil pipeline construction project in India in order to demonstrate its effectiveness. The concerned project stakeholders were involved through focus group discussions for applying the proposed risk management framework in the project under study. Findings: The combined AHP and risk map approach is very effective to manage project risks across project, work package and activity levels. The risk factors in project level are caused because of external forces such as business environment (e.g. customers, competitors, technological development, politics, socioeconomic environment). The risk factors in work package and activity levels are operational in nature and created due to internal causes such as lack of material and labor productivity, implementation issues, team ineffectiveness, etc. Practical implications: The suggested model can be applied to any complex project and helps manage risk throughout the project life cycle. Originality/value: Both business and operational risks constitute project risks. In one hand, the conventional project risk management frameworks emphasize on managing business risks and often ignore operational risks. On the other hand, the studies that deal with operational risk often do not link them with business risks. However, they need to be addressed in an integrated way as there are a few risks that affect only the specific level. Hence, this study bridges the gaps. © 2010 Elsevier B.V. All rights reserved.

Resilience and adaptation of small and medium-sized enterprises to flood risk

Purpose – The UK has experienced a number of flood events in recent years, and the intensity and frequency of such events are forecast to further increase in future due to changing climatic conditions. Accordingly, enhancing the resilience of small and medium-sized enterprises (SMEs) – which form an important segment in a society – to flood risk, has emerged as an important issue. However, SMEs often tend to underestimate the risk of flooding which tends to have a low priority in their business agenda. The purpose of this paper is to undertake an investigation of adaptation to the risk of flooding considering community-level measures, individual-level property protection, and business continuity and resilience measures. Design/methodology/approach – A total of four short case studies were conducted among SMEs to identify their response to flood risk, and what measures have been undertaken to manage the risk of flooding. Findings – It was observed that SMEs have implemented different property-level protection measures and generic business continuity/risk management measures, based on their requirements, to achieve a desired level of protection. Practical implications – SMEs are likely to positively respond to property-level adaptation following a post-flood situation. It is important that information such as costs/benefits of such measures and different options available are made accessible to SMEs affected by a flood event. Social implications – Implementation of property-level adaptation measures will contribute towards the long term adaptation of the existing building stock to changing climatic conditions. Originality/value – The paper contributes towards policy making on flood risk adaptation and SME decision making, and informs policy makers and practitioners.

Private climate change reporting: an emerging discourse of risk and opportunity?

Purpose – This paper aims to explore the nature of the emerging discourse of private climate change reporting, which takes place in one-on-one meetings between institutional investors and their investee companies. Design/methodology/approach – Semi-structured interviews were conducted with representatives from 20 UK investment institutions to derive data which was then coded and analysed, in order to derive a picture of the emerging discourse of private climate change reporting, using an interpretive methodological approach, in addition to explorative analysis using NVivo software. Findings – The authors find that private climate change reporting is dominated by a discourse of risk and risk management. This emerging risk discourse derives from institutional investors' belief that climate change represents a material risk, that it is the most salient sustainability issue, and that their clients require them to manage climate change-related risk within their portfolio investment. It is found that institutional investors are using the private reporting process to compensate for the acknowledged inadequacies of public climate change reporting. Contrary to evidence indicating corporate capture of public sustainability reporting, these findings suggest that the emerging private climate change reporting discourse is being captured by the institutional investment community. There is also evidence of an emerging discourse of opportunity in private climate change reporting as the institutional investors are increasingly aware of a range of ways in which climate change presents material opportunities for their investee companies to exploit. Lastly, the authors find an absence of any ethical discourse, such that private climate change reporting reinforces rather than challenges the “business case” status quo. Originality/value – Although there is a wealth of sustainability reporting research, there is no academic research on private climate change reporting. This paper attempts to fill this gap by providing rich interview evidence regarding the nature of the emerging private climate change reporting discourse.

Reporting and managing risk:a look at current practice at Tesco, RBS, local and central government

These case studies from CIMA highlight the need to embed risk management within more easily understood behaviours, consistent with the overall organisational culture. In each case, some form of internal audit team provides either an oversight function or acts as an expert link in that feedback loop. Frontline staff, managers and specialists should be completely aligned on risk, in part just to ensure that there is a consistency of approach. They should understand instinctively that good performance includes good risk management. Tesco has continued to thrive during the recession and remains a robust and efficient group of businesses despite the emergence of potential threats around consumer spending and the supply chain. RBS, by contrast, has suffered catastrophic and very public failures of risk management despite a large in-house function and stiff regulation of risk controls. Birmingham City Council, like all local authorities, is adapting to more commercial modes of operation and is facing diverse threats and opportunities emerging as a result of social change. And DCMS, like many other public sector organisations, has to handle an incredibly complex network of delivery partners within the context of a relatively recent overhaul of central government risk management processes. Key Findings: •Risk management is no longer solely a financial discipline, nor is it simply a concern for the internal control function. •Where organisations retain a discrete risk management cadre – often specialists at monitoring and evaluating a range of risks – their success is dependent on embedding risk awareness in the wider culture of the enterprise. •Risk management is most successful when it is explicitly linked to operational performance. •Clear leadership, specific goals, excellent influencing skills and open-mindedness to potential threats and opportunities are essential for effective risk management. •Bureaucratic processes and systems can hamper good risk management – either as a result of a ‘box-ticking mentality’ or because managers and staff believe they do not need to consider risk themselves.

A comparison of antibiotic prescribing indicators and medicines management scoring in secondary care

Poster: - Robust prescribing indicators analogous to those used in primary care are not available currently in NHS hospital trusts - The Department of Health has recently implemented a scheme for self-assessment scoring medicines management processes (maximum 23) in NHS hospitals - There is no clear relationship between average values for two antibiotic prescribing indicators obtained in ten NHS hospital trusts in the West Midlands - There is no clear relationship between either indicator value and the corresponding self-assessment medicines management score - This study highlights the difficulties involved in assessing the medicines management processes in NHS hospitals; better medicines management evaluation systems are needed

Emerging of human factor in risk analysis of home care service

Risk management in healthcare represents a group of various complex actions, implemented to improve the quality of healthcare services and guarantee the patients safety. Risks cannot be eliminated, but it can be controlled with different risk assessment methods derived from industrial applications and among these the Failure Mode Effect and Criticality Analysis (FMECA) is a largely used methodology. The main purpose of this work is the analysis of failure modes of the Home Care (HC) service provided by local healthcare unit of Naples (ASL NA1) to focus attention on human and non human factors according to the organization framework selected by WHO. © Springer International Publishing Switzerland 2014.

On the Lp-Norm Regression Models for Estimating Value-at-Risk

Analysis of risk measures associated with price series data movements and its predictions are of strategic importance in the financial markets as well as to policy makers in particular for short- and longterm planning for setting up economic growth targets. For example, oilprice risk-management focuses primarily on when and how an organization can best prevent the costly exposure to price risk. Value-at-Risk (VaR) is the commonly practised instrument to measure risk and is evaluated by analysing the negative/positive tail of the probability distributions of the returns (profit or loss). In modelling applications, least-squares estimation (LSE)-based linear regression models are often employed for modeling and analyzing correlated data. These linear models are optimal and perform relatively well under conditions such as errors following normal or approximately normal distributions, being free of large size outliers and satisfying the Gauss-Markov assumptions. However, often in practical situations, the LSE-based linear regression models fail to provide optimal results, for instance, in non-Gaussian situations especially when the errors follow distributions with fat tails and error terms possess a finite variance. This is the situation in case of risk analysis which involves analyzing tail distributions. Thus, applications of the LSE-based regression models may be questioned for appropriateness and may have limited applicability. We have carried out the risk analysis of Iranian crude oil price data based on the Lp-norm regression models and have noted that the LSE-based models do not always perform the best. We discuss results from the L1, L2 and L∞-norm based linear regression models. ACM Computing Classification System (1998): B.1.2, F.1.3, F.2.3, G.3, J.2.