Class 13 Flashcards
Avoidance
making decisions with the intention of eliminating either (1) some existing potential for loss or (2) a future potential for loss from a new venture (in essence these are lost opportunities)
risk management tools address
- lost opportunities
- costs to manage risks
- loss or risk control costs
- loss or risk financing costs
risk or loss control
actions that reduce frequency or severity of loss (or both)
mechanisms
prevention, reduction
prevention
any measure that lessens the probability (frequency) of loss but does not eliminate it (bill to outlaw cell phone use while driving)
reduction
any effort that lessens the size (severity) of losses that do occur (click it or ticket)
pre-loss
actions taken prior to loss, even though effect is realized only when loss occurs (crisis management)
segregation
lower an org’s dependence on any single asset, activity, or person and as a result each loss is smaller in size (and probably more predictable)
examples of segregation
separation and duplication
separation
divide assets or activities into 2 or more separate units (diversification)
examples of something that is both prevention and reduction
speed limits, holes in the top of legos
duplication
reproduce an orgs assets or facilities with the duplicate intended solely as a back up (with more units, this action may increase frequency)
crisis management
plans of action to prepare for an emergency
post-loss
actions taken after a loss occurs (legal defense, rehabilitation, etc)
heinrich’s domino theory
focus on behavior
- problem begins with social environment
- the social enviro leads to fault in people
- fault in people results in unsafe act/condition
- unsafe act/condition (hazard) leads to an accident
- the accident results in injury/damage