intro to risk management
Introduction to Risk Management
Objectives
Define risk management and its concepts.
Evaluate risk in the area of hospitality and tourism business.
Differentiate risk and hazard in the workplace.
Enumerate the different types of hazards.
Determine the legal liabilities in relation to risk management.
Understanding Risk
Definition of Risk
Risk is defined by the UNWTO as a situation that exposes someone or something to danger, harm, or loss.
Forms of risk include:
Physical safety risk
Property loss risk
Financial business risk
And others.
Importance of Risk Management
Benefits of Practicing Risk Management
To avoid injury to guests and employees
To protect business operations from financial or physical ruin
Concepts of Risk
Real Risk
Definition: Real risk is the actual statistical likelihood of an incident occurring.
It is established through:
Reviews of statistics
Analytical processes
Use of expertise in the field
Characteristics:
Little ambiguity or subjectivity
Based in fact and evidence
Example:
Driving at high speed can cause accidents.
Perceived Risk
Definition: Perceived risk is the perception of risk by those undertaking or evaluating something.
Characteristics:
May vary greatly based on apprehension, anxiety, or experience with the risk.
Can be higher or lower than the actual risk.
Example:
Fear of the ocean because of sharks.
Inherent Risk
Definition: Inherent risk is the risk that must exist for the activity to occur.
Examples include:
Risk of drowning when swimming
Risk of falling when skiing
Characteristics:
Impossible to eliminate inherent risk as it would preclude participation in the activity.
Note: Inherent risks naturally exist before safety measures are applied.
Common Risks in the Hospitality Business
Types of Common Risks
Common Risks in Food Safety
Common Risks in Serving Liquor
Common Risks in Housekeeping
Common Risks in Transportation
Risk vs. Hazard
Definitions
Hazard: A potential source of harm or adverse health effects on individuals.
Risk: The likelihood that a person may be harmed or suffers adverse health effects if exposed to a hazard.
Key Differences
Hazard: Something that has the potential to harm.
Risk: The likelihood of a hazard causing harm.
Types of Hazards
Categories of Hazards
Safety Hazards
Unsafe working conditions that can cause injury, illness, or death.
Biological Hazards
Exposure to harm or disease related to working with animals, people, or infectious materials.
Typical workplaces include schools, hospitals, and outdoor occupations.
Physical Hazards
Environmental factors that can harm the body without contact.
Ergonomic Hazards
Strains from type of work and body positions that can lead to injuries.
Symptoms may include sore muscles or long-term illness.
Chemical Hazards
Exposure to chemicals in any form (solid, liquid, gas) which can lead to health issues.
Work Organization Hazards
Stressors that can cause short-term stress or long-term strain from workplace issues such as workload and lack of control.
Risk Management Process
Steps in the Process
Hazard Identification
Identify hazards to equipment, property, personnel, or the organization.
Risk Assessment
Evaluate the seriousness of the consequences.
Assess the probability of occurrence.
Determine if the consequent risk is acceptable per the organization's safety performance criteria.
Risk Mitigation
Take action to reduce the risk to an acceptable level.
Options include accepting the risk or taking action to minimize it.
Legal Liabilities
Responsibilities of Operators
Safety of Guests and Employees
Operators have an ethical responsibility to avoid emotional and physical harm.
Protection of Business Operations
Includes protection against damage to property, individuals, and avoidance of future litigation.