Olympic Games: The Risk Management Process

Risk management

Risk can be defined as the impact of uncertainty on objectives which can be either positive or negative. Risk management can be referred to as identifying and giving risks the priority, by organizing and making use of the resources economically to minimize the effect of the unfortunate events. The risk management process gives an outline that should be followed when identifying, organizing, and controlling risks. In this process, one can point out each risk, measure the impact, and take the right step to control it or on the other hand find some ways of reducing the effect should the risk occur (Baranoff, et al. p. 102). The risk management process is applied whenever one realizes that his ability to meet the set goals and objectives is at risk. This essay paper is deeply focusing on the environmental risk management of a large sports event. A plan to reduce the environmental effect of such a big event is widely discussed.

Putting into consideration a large sports event like the Olympic Games the environment is subject to various risks mainly because of many participants. The most appropriate initial step is identifying the various types of risks likely to be encountered in such an event. Identification of the risks exposes the place in question to all the uncertainties. For one to perform the best identification of the risks, there is a need to be aware of the place in question, legal, cultural, and social aspects surrounding the place as major risks come from outside. Both strategic and operational objectives of the event should be well understood as well as threats and opportunities connected to the achievements of those objectives (Levine and Jones, p. 73). In our case of a sporting event, the approximate number of the participants should be noted, social and cultural practices within that area, and the set objectives of the event.

A methodical way should be applied when identifying the risk. This helps by ensuring that all the significant activities which would be taking place in the sports field are identified. This, therefore, makes it easier to also identify all the types of risks flowing from these events. All the volatility in connection to these events is also identified and arranged categorically. Large events like Olympic Games have got both strategic and operational activities (Pritchard, p. 101). Strategic activities are the long-term goals of the events which are likely to be affected by the physical environment all these should be put together. Operational activities are the daily issues of the events which usually confront the ongoing event as it is trying to achieve its set objectives. Compliance should also be put into consideration to take care of issues like healthy and safety and environmental practices.

Moreover, the next most important step is to describe the risk. This is meant to lay out all the identified risks associated with the Olympic Games in form of a table. A well-designed table gives one assurance of elaborate risk identification, complete description, and useful assessment process. In that table, the probability and consequences of each of the risks are defined to give priority to those risks which call for deep analysis. In the risk description table, the name of the risk should be listed and the scope of the risk which entails the qualitative report of the Olympic event, the size, number, and dependencies (Skipper, p. 320). The nature of the risk should be also included in the table defining whether compliance, strategic or operational.

Risk quantification in terms of significance and probability should be determined as well as risk tolerance. This would entail the financial effect of the risk, risk value, size of the potential benefits or losses, and the desired level of performance in controlling the risk. In addition, risk treatment and control mechanisms should also be put into consideration especially the primary means through which the identified risks are currently managed. The levels of confidence in the existing control measure should be listed and the protocols for monitoring and review identified (Skipper, p. 432). Potential action for improvement and recommendations to reduce risk in the future should be made to enable the developments of strategies and policies to be followed in the effort of environmental risk management.

Risk estimation should also be determined whether it’s quantitative, semi-quantitative, or otherwise qualitative which is determined by the probability of occurrence and the expected effects. Threats are downside risks while opportunities are upside risks which may be classified as to whether high, medium, or low. The high probability of threats stands for the likelihood of occurrence in each year or 25% chance of occurrence. Medium probability stands for occurrence in ten years or else less than 25% chances (SAA, p. 58). Low probability represents an unlikelihood of occurrence in ten years, the same as 2% chances. The high probability of occurrence of opportunities represents the likelihood of a better outcome in one year, the same as more than 75% chances. Medium probability shows favorable results of between 25% to 75% chances of occurrence. Low probability shows some chances of good results of less than 25% chances.

Several techniques can be applied to analyze risks. These techniques can act specifically to either upside or downside risk or act on both. Afterward, the outcome of the risk analysis gives out a risk profile that allows some risks to be prioritized. After doing the right analysis the estimation of the risks against the established risk criteria is done. The risk criteria may involve costs and benefits, social economic, and environmental factors. Risk evaluation serves as a tool of decision making concerning the significance of risks to the event in question, and whether the risks involved should be taken or treated (Pritchard, p. 86).

Both internal and external reporting of the risk is done later as different individuals and bodies need the awareness of environmental risk management. The board of directors should be notified about the most significant risks facing such big events. Ensure the awareness of those risks reaches everyone concerned. The individuals should be made aware of their accountability for their risks (Baranoff, et al., p. 115). This would enable the individuals to contribute to the continuous improvement of environmental risk management. Individuals are as well given the responsibility of reporting to the senior management of any seen new risk or any failing control measure.

External reporting should be made to the stakeholders on the effectiveness of the environmental risk management to offer their support as may be required. Risk treatment is another aspect that should be included in the plan. This involves selecting and implementing some ways through which the risks can be modified. Risk treatment may call for risk avoidance, transferring the risk, or financing it. The majority are seen to go for risk financing whereby an insurance program is set aside to fund any financial impacts of the risk (Skipper, p. 357). Finally, monitoring and reviewing the environmental risk management plan is done. This ensures that all the risks involved are well identified and described, and the appropriate measures are in control.

Works cited

  1. Baranoff E, Brockett P, and Kahane Y: Risk Management for Corporations and Individuals Flat World Knowledge, NY, 2009.
  2. Levine. R. and Jones, L. Risk Management for Corporations: Materials Prepared for the Continuing Legal Education Seminar, Risk Management for Corporations, ISBN1552586685, 9781552586686. Continuing Legal Education Society of British Columbia, 2009.
  3. Pritchard, P. Environmental risk management, (2nd ed), ISBN1853835986, 9781853835988, reprintPublisherEarthscan, 2000.
  4. Skipper, D.H. Risk Management and Insurance: Perspectives in a Global Economy. ISBN8126515937, 9788126515936. India Pvt. Ltd., 2009.
  5. Standard Association of Australia (SAA). Environmental risk management: principles and process, ISBN0733735401, 9780733735400. Standards Australia, 2000.

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