Expert answer:DMM623 Risks in Health Care Facility Discussion Bo

  

Solved by verified expert:For this week’s discussion, focus on the Risk Matrix in Table 15.1 Figure 15.1 on. Give one example of a risk for each “T” in Figure 15.1, and justify why you would select that “T” as a way to manage that specific risk taking into consideration the impact and likelihood of each risk. So, you will identify one risk that you will transfer, another that you will terminate, etc. your example should be about risks in health care facility, 600 words APA style See the example I attached for extra clarification,
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IMPACT
Transfer: When responding to a leak or chemical gas release in private industry,
another party will be at service from a subject matter expert (SME). For instance, in a
business building, a 65-inch industrial line that runs hot water in the facility above the
ceiling has been damaged. Hot water is disseminating into several labs and seeping
down to the basement. The basement has the main electrical panels operating the
entire facility. Emergency responders (ER) within the company arrives on the scene.
Most companies have contractors from other organizations to maintain the facility as
well as assist in accidents that can cease normal business production. Therefore,
emergency responders will start by mitigating the water flood while other personnel
contacts SME, such as electrician and maintenance technician. ER will transfer the event
to the SME to mitigate the damaged industrial line, yet ER will assist in any objectives
SME assigns to them until the event is all clear. Since companies have other
organizations to maintain facilities, and the hazard is not a reoccurring event, the
impact is high, and the likelihood is low; therefore, organizations are inclined to transfer
the risk (Hopkins, 2017).
Tolerate: Engineers have bulk liquefied gas cylinders, also called dewar, are used
inside an isolated room in their lab to maintain production continuity. These are similar
to standard compressed gas cylinders but contain liquified gas stored under pressure.
The container allows holding several times the number of materials as a conventional
gas cylinder. Twice a month, engineers would have to refill liquid nitrogen in the gas
cylinder. This can be a risk if not wearing the proper personal protective equipment
(PPE) while transferring nitrogen into the dewar. Therefore, the company authorizes an
oxygen (O2) sensor inside the dewar room. Since 21% is the normal O2 level, our team
will be notified if the level becomes a cautionary or critical event. Most of the time, our
notification reports O2 depletion when nitrogen is being transferred. In this regard, O2
depletion can be a tolerated risk because the engineer is wearing the proper PPE, and
ventilation will need to be activated, such as opening the doors to release gas into the
vents. According to Hopkins (2017) the example is based as “tolerable when all costeffective control measures have been put in place, so that the organization is accepting
or tolerating the risk at its current level” (p. 179).
depletion can be a tolerated risk because the engineer is wearing the proper PPE, and
ventilation will need to be activated, such as opening the doors to release gas into the
vents. According to Hopkins (2017) the example is based as “tolerable when all costeffective control measures have been put in place, so that the organization is accepting
or tolerating the risk at its current level” (p. 179).
Referenc
Centers for Disease Control and Prevention (CDC) (2018, April 4). Retrieved fro
Hopkins, P. (2017). Fundamentals of Risk Management: Understanding, Evaluat
NY: Kogan
Rxlist (2019). Retrieved from: https://www.rxlist.co
e in private industry,
ME). For instance, in a
the facility above the
ral labs and seeping
anels operating the
arrives on the scene.
aintain the facility as
duction. Therefore,
hile other personnel
will transfer the event
sist in any objectives
anies have other
ccurring event, the
are inclined to transfer
lled dewar, are used
uity. These are similar
ored under pressure.
als as a conventional
d nitrogen in the gas
otective equipment
ompany authorizes an
mal O2 level, our team
Most of the time, our
red. In this regard, O2
g the proper PPE, and
o release gas into the
erable when all costganization is accepting
9).
Terminate: When manufacturing companies create their products, tools contain
hazardous materials, which the delivery system must be safe inside and out of the
environment after usage is completed. There are several steps for chemicals to arrive in
the tool to transfer the final product securely. After the chemicals have been mixed into
the tool, it becomes hazardous waste. The chemical waste will be transferred into an
abatement system that is a vacuum system removing the materials from the immediate
area and releases them to the ambient air outside. Within the abatement system, it
works to dilute the chemicals to filter out hazardous materials before discharging
outside the facility. These systems are essential to have the production run smoothly
24/7; therefore, it can be a high risk for a business to operate when the system is
malfunctioning. If the system is being defective, then the diluted chemical can revert
into the tool, creating another significant event. As a result, to have the business
continue operations, emergency responders and SME have the authorization to shut off
the tool, or terminate, until further investigation has been followed-up. Consequently,
it is acceptable to have a high potential impact and high likelihood to eliminate the risk
when the circumstances are fatal for the business (Hopkins, 2017).
Treat:
Chemical exposure of a patient has been contacted on their right hand
containing hydrofluoric acid (HF). When an HF exposure occurs, the patient is at risk to
lose calcium compounds throughout the body, especially in the bones (CDC, 2018). HF
does not immediately irritate immediately; instead, it can take up until 12 to 24 hours
for visible damage to appear (CDC, 2018). There are three guidelines in responding to a
chemical exposure with HF: 1) irrigate the affected area under cold water for 15
minutes, 2) apply the treatment, 3) transport to an approved medical facility for a
follow-up examination and/or treatment. For treatment, calcium gluconate is used for
this particular chemical exposure. It is a topical cream to treat conditions arising from
caclium deficiencies (Rxlist, 2019). The scenario is a treat risk, considering a private
industry contains hazardous materials, this can likely happen as well as the impact is
low due to providing the right directions to responding to chemical exposure. Also, ISO
31000 deems sharing the risk with another party is deemed a treat risk (Hopkin, 2017).
g the proper PPE, and
caclium deficiencies (Rxlist, 2019). The scenario is a treat risk, considering a private
o release gas into the
industry contains hazardous materials, this can likely happen as well as the impact is
erable when all cost- low due to providing the right directions to responding to chemical exposure. Also, ISO
ganization is accepting 31000 deems sharing the risk with another party is deemed a treat risk (Hopkin, 2017).
9).
References
018, April 4). Retrieved from: https://emergency.cdc.gov/agent/hydrofluoricacid/basics/facts.asp
t: Understanding, Evaluating and Implementing Effective Risk Management, 4th edition . New York,
NY: Kogan Page
rom: https://www.rxlist.com/calcium-gluconate-drug.htm#description
LIKELIHOOD
i
Fundamentals
of Risk
Management
ii
THIS PAGE IS INTENTIONALLY LEFT BLANK
iii
Fundamentals
of Risk
Management
Understanding, evaluating
and implementing effective
risk management
Paul Hopkin
iv
Publisher’s note
Every possible effort has been made to ensure that the information contained in this book is accurate at
the time of going to press, and the publishers and authors cannot accept responsibility for any errors or
omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or
refraining from action, as a result of the material in this publication can be accepted by the editor, the
publisher or any of the authors.
First published in Great Britain and the United States in 2010 by Kogan Page Limited.
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced,
stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the
CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the
undermentioned addresses:
120 Pentonville Road
London N1 9JN
United Kingdom
www.koganpage.com
525 South 4th Street, #241
Philadelphia PA 19147
USA
4737/23 Ansari Road
Daryaganj
New Delhi 110002
India
© The Institute of Risk Management, 2010
The right of The Institute of Risk Management to be identified as the author of this work has been
asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
ISBN 978 0 7494 5942 0
E-ISBN 978 0 7494 5943 7
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Hopkin, Paul.
Fundamentals of risk management : understanding, evaluating, and implementing effective risk management / Paul Hopkin.
p. cm.
Includes index.
ISBN 978-0-7494-5942-0 — ISBN 978-0-7494-5943-7 (ebook) 1. Risk management. I. Title.
HD61.H567 2010
658.15’5–dc22
2009046006
Typeset by Saxon Graphics Ltd, Derby
Printed and bound in India by Replika Press Pvt Ltd
v
Dedication
Michael, David and Kathy
vi
THIS PAGE IS INTENTIONALLY LEFT BLANK
vii
Contents
Dedication
List of Figures
List of Tables
Preface
Acknowledgements
Introduction
Part 1
v
xvii
xix
xxiii
xxv
1
Introduction to risk management
Learning outcomes for Part 1
Part 1 Further reading
9
9
10
1
Approaches to defining risk
Definitions of risk
Types of risks
Risk description
Inherent level of risk
Risk classification systems
Risk likelihood and magnitude
11
11
13
14
16
16
17
2
Impact of risk on organizations
Risk importance
Impact of hazard risks
Attachment of risks
Risk and reward
Risk and uncertainty
Attitudes to risk
20
20
21
22
23
25
26
viii
Contents
3
Types of risks
Timescale of risk impact
Hazard, control and opportunity risks
Hazard tolerance
Management of hazard risks
Uncertainty acceptance
Opportunity investment
28
28
29
31
32
33
34
4
Development of risk management
Origins of risk management
Insurance origins of risk management
Specialist areas of risk management
Enterprise risk management
Levels of risk management sophistication
Risk maturity models
36
36
40
41
42
43
45
5
Principles and aims of risk management
Principles of risk management
Importance of risk management
Risk management activities
Efficient, effective and efficacious
Perspectives of risk management
Implementing risk management
46
46
47
48
49
50
52
6
Risk management standards
Scope of risk management standards
Risk management process
Risk management framework
COSO ERM cube
Features of RM standards
Control environment approach
53
53
56
56
58
59
62
Case study: Barclays Bank – risk management objectives
63
Risk strategy
Learning outcomes for Part 2
Part 2 Further reading
65
65
66
Part 2
Contents
ix
7
Risk management policy
Risk architecture, strategy and protocols
Risk management policy
Risk management architecture
Risk management strategy
Risk management protocols
Risk management guidelines
67
67
69
72
72
73
74
8
Risk management documentation
Record of risk management activities
Risk response and improvement plans
Event reports and recommendations
Risk performance and certification reports
Designing a risk register
Using a risk register
76
76
77
78
79
79
83
9
Risk management responsibilities
Allocation of responsibilities
Risk management and internal audit
Range of responsibilities
Statutory responsibilities of management
Role of the risk manager
Chief risk officer (CRO)
87
87
88
88
90
92
93
10
Risk architecture and structure
Risk architecture
Corporate structure
Risk committees
Risk communications
Risk maturity
Alignment of activities
95
95
97
98
100
101
103
11
Risk-aware culture
Styles of risk management
Defining risk culture
Components of a risk-aware culture
Measuring risk culture
104
104
105
106
107
x
Contents
Risk culture and risk strategy
Establishing the context
108
108
Risk training and communication
Risk training and risk culture
Risk information and communication
Shared risk vocabulary
Risk information on an intranet
Risk management information systems (RMIS)
Consistent response to risk
110
110
111
112
113
113
115
Case study: Tesco – risk management responsibilities
117
Risk assessment
Learning outcomes for Part 3
Part 3 Further reading
119
119
120
13
Risk assessment considerations
Importance of risk assessment
Approaches to risk assessment
Risk assessment techniques
Risk matrix
Risk perception
Risk appetite
121
121
122
123
125
126
127
14
Risk classification systems
Short, medium and long-term risks
Purpose of risk classification systems
Examples of risk classification systems
FIRM risk scorecard
PESTLE risk classification system
Hazard, control and opportunity risks
131
131
132
132
134
135
137
15
Risk likelihood and impact
Application of a risk matrix
Inherent and current level of risk
Control confidence
140
140
141
143
12
Part 3
Contents
xi
4Ts of risk response
Risk significance
Risk capacity
143
144
146
16
Loss control
Risk likelihood
Risk magnitude
Hazard risks
Loss prevention
Damage limitation
Cost containment
148
148
149
150
151
152
152
17
Defining the upside of risk
Upside of risk
Opportunity assessment
Riskiness index
Upside in strategy
Upside in projects
Upside in operations
154
154
156
157
160
161
162
18
Business continuity planning
Importance of BCP and DRP
Business continuity standards
Successful BCP and DRP
Business impact analysis (BIA)
BCP and ERM
Civil emergencies
163
163
164
166
168
168
169
Case study: Invensys – risks and uncertainties
171
Risk and organizations
Learning outcomes for Part 4
Part 4 Further reading
173
173
174
Corporate governance model
Corporate governance
OECD principles of corporate governance
175
175
176
Part 4
19
xii
Contents
LSE corporate governance framework
Corporate governance for a bank
Corporate governance for a government agency
Evaluation of board performance
177
179
180
182
20
Stakeholder expectations
Range of stakeholders
Stakeholder dialogue
Stakeholders and core processes
Stakeholders and strategy
Stakeholders and tactics
Stakeholders and operations
185
185
186
188
189
189
190
21
Analysis of the business model
Simplified business model
Core business processes
Efficacious strategy
Effective processes
Efficient operations
Reporting performance
192
192
193
194
195
196
196
22
Project risk management
Introduction to project risk management
Development of project risk management
Uncertainty in projects
Project life cycle
Opportunity in projects
Project risk analysis and management
198
198
199
200
200
202
202
23
Operational risk management
Operational risk
Definition of operational risk
Basel II
Measurement of operational risk
Difficulties of measurement
Developments in operational risk
205
205
206
207
208
210
212
Contents
24
xiii
Supply chain management
Importance of the supply chain
Scope of the supply chain
Strategic partnerships
Joint ventures
Outsourcing of operations
Risk and contracts
214
214
215
216
217
217
219
Case study: Hercules Incorporated – outsourcing logistics
221
Part 5
Risk response
Learning outcomes for Part 5
Part 5 Further reading
223
223
224
25
Enterprise risk management
Enterprise-wide approach
Definitions of ERM
ERM in practice
ERM and business continuity
ERM in energy and finance
Future development of ERM
225
225
226
227
229
229
231
26
Importance of risk appetite
Risk capacity
Risk exposure
Nature of risk appetite
Cost of risk controls
Risk management and uncertainty
Risk appetite and lifestyle decisions
233
233
235
236
239
240
242
27
Tolerate, treat, transfer and terminate
The 4Ts of hazard response
Risk tolerance
Risk treatment
Risk transfer
Risk termination
Project and strategic risk response
244
244
248
248
249
250
250
xiv
Contents
28
Risk control techniques
Hazard risk zones
Types of controls
Preventive controls
Corrective controls
Directive controls
Detective controls
253
253
254
257
258
258
259
29
Control of selected hazard risks
Risk control
Control of financial risks
Control of infrastructure risks
Control of reputational risks
Control of marketplace risks
Learning from controls
261
261
262
265
270
272
273
30
Insurance and risk transfer
Importance of insurance
History of insurance
Types of insurance cover
Evaluation of insurance needs
Purchase of insurance
Captive insurance companies
277
277
278
279
281
282
284
Case study: Intercontinental Hotels Group – loss-control strategy
287
Risk assurance and reporting
Learning outcomes for Part 6
Part 6 Further reading
289
289
290
Evaluation of the control environment
Nature of internal control
Purpose of internal control
Control environment
Features of the control environment
CoCo framework of internal control
Risk-aware culture
291
291
292
293
295
296
298
Part 6
31
Contents
xv
32
Activities of the internal audit function
Scope of internal audit
Financial assertions
Risk management and internal audit
Risk management outputs
Role of internal audit
Management responsibilities
299
299
299
300
302
302
304
33
Risk assurance techniques
Audit committees
Role of risk management
Risk assurance
Hazard, control and opportunity risks
Control risk self-assessment
Benefits of risk assurance
306
306
308
309
310
311
312
34
Reporting on risk management
Risk documentation
Sarbanes–Oxley Act of 2002
Risk reports by US companies
Charities risk reporting
Public sector risk reporting
Government Report on National Security
313
313
314
315
317
318
320
35
Corporate social responsibility
CSR and corporate governance
CSR and risk management
CSR and reputational risk
CSR and stakeholder expectations
Supply chain and ethical trading
CSR reporting
321
321
322
323
323
324
326
36
Future of risk management
Review of benefits of risk management
Steps to successful risk management
Changing face of risk management
Concept of risk appetite
327
327
328
331
332
xvi
Contents
Concept of upside of risk
Future developments
333
334
Case study: BP – risk reporting
336
Appendix A: Glossary of terms
Appendix B: Implementation guide
Index
338
348
351
xvii
Figures
1.1
2.1
2.2
4.1
4.2
6.1
6.2
6.3
6.4
6.5
10.1
10.2
13.1
13.2
15.1
15.2
15.3
18.1
19.1
19.2
20.1
21.1
22.1
26.1
26.2
26.3
Risk likelihood and magnitude
Attachment of risks
Risk and reward
7Rs and 4Ts of (hazard) risk management
Risk management sophistication
IRM risk management process
Components of an RM framework
COSO ERM framework
Risk management framework from BS 31100
Risk management process from ISO 31000
RM architecture for a large corporation
RM architecture for a charity
Risk appetite matrix (risk averse)
Risk appetite matrix (risk aggressive)
Personal risk matrix
Risk matrix and the 4Ts of hazard management
Inherent, current and target levels of risk
Model for business continuity planning
Corporate governance framework
Corporate governance in a government agency
Importance of core processes
Simplified business model
Project life cycle
Risk and uncertainty
Risk appetite, exposure and capacity (optimal)
Risk appetite, exposure and capacity (vulnerable)
18
22
24
40
44
55
57
58
60
61
96
97
128
128
140
141
142
165
178
180
188
193
201
234
237
238
xviii
26.4
26.5
27.1
27.2
27.3
28.1
29.1
29.2
29.3
29.4
30.1
31.1
32.1
Figures
Illustration of control effect
Risk management and uncertainty
Types of controls for hazard risks
Risk versus uncertainty in projects
Risk versus reward in strategy
Hazard risk zones
Cost-effective controls
Cost–benefit analysis
Learning from controls
Risk and reward decisions
Role of captive insurance companies
Criteria of Control (CoCo) framework
Role of internal audit in ERM
239
241
246
251
252
254
262
274
275
276
285
293
303
xix
Tables
1.1
1.2
3.1
4.1
4.2
4.3
5.1
6.1
6.2
7.1
7.2
7.3
7.4
8. …
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