Risk Control Systems and Performance

Risk Control Systems and Performance Critical control systems Critical risk control systems are essential in various infrastructures notably those in the energy sector.Advertising We will write a custom assessment sample on Risk Control Systems and Performance specifically for you for only $16.05 $11/page Learn More Due to the increased integration in enterprise systems in modern settings, there is an increased need for the establishment of inherently secure risk control systems which are designed and implemented in such a way that they minimize vulnerabilities to constant threats being posed by both internal and external forces (Young et al 2005). Occurrence of these risks would heavily impact on the effectiveness and efficiency of the organization consequently impacting on the profitability as well as the outlook of the organization (Fraser 2010). Energy companies are often confronted by severe technical security risks due to the delicate nature of their operations. It is therefore the duty o f the organization’s owners and operators to establish the link between the prevailing risks in production and distribution process for energy products and vulnerabilities inherent in the risk control systems (Young et al 2005). Subsequently, the firm’s management should institute and integrate risk control systems, which should be continually improved in order to defend creation and distribution operations from any harm (unintentional and intentional). It is important for companies to implement efficient risk control systems since failure of the same may result in endangerment to human life and the environment, loss of profitability for the affected company, and harm to the nation’s energy production infrastructure (Young et al 2005). Risk refers to the possibility of occurrence of an event that could adversely affect the company’s personnel, assets, environment, reputation or even overflow to the external surroundings (Poupart-Lafarge 2007). Risk is the refore a necessary part of the organization which should be approached with a lot of caution.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Since risk taking is an inherent part of any business enterprise seeking to prosper in the market, it is important for the organization to embrace an amount of risk adequate for effective performance of the business. However, these risks require proper management and control in order to enhance the company’s ability to achieve its long term objectives and maintain its profitability. Risk management and critical control systems play an important role in directing organizations towards achieving operations safety by continually preventing and managing these risks (Poupart-Lafarge 2007). Risk control systems therefore refer to a dynamic system adopted by a specific organization to regulate and maintain risks in the company at certai n acceptable levels (Poupart-Lafarge 2007). Critical risks control systems entails a set of resources, procedures, guidelines and actions that are adopted by the organization in order to manage risks. The risk control systems play a major role in creating and preserving the organization’s values, assets as well as its reputation in both the internal and external environment (Poupart-Lafarge 2007). The risk control systems seek to identify and address the potential risks and opportunities that the company is likely to incur in the future on occurrence of risks after which they address and anticipate these risks rather than submitting them passively. The risk management systems assist in the process of decision making and the company’s processes to attain its objectives (Poupart-Lafarge 2007). Through the control systems, the organization seeks to identify the main incidences and events that are likely to influence the company’s long term performance and interfere with the attainment of the company’s objectives. Since it is every organization’s goal to reach the highest level of performance, controlling these risks promotes the company’s performance and enhances the attainment of the company’s objectives. Risk management is an integral part of any organization’s decision-making and operating processes since the decisions made by the organization have to be based on the possibility of occurrence of various risk. Risk control systems allows managers to gain a comprehensive outlook of the company’s threats an opportunities consequently enabling them to make informed decisions based on the probability of risk.Advertising We will write a custom assessment sample on Risk Control Systems and Performance specifically for you for only $16.05 $11/page Learn More Risk control systems and risk management promote consistency of the company’s actions with its value (Poupart-Lafarge 2007). This is because they seek to address the issues likely to affect both the internal and external environment consequently demonstrating corporate responsibility. Occurrence of risks often threatens the company’s credibility and reflects the company’s lack of consistency between decision making process and critical risk costs. It is therefore important for organization’s to contain the effects of risks occurrence by ensuring that the risk is efficiently controlled. Sound risk control systems significantly reduce the probability of risk occurrence consequently promoting the image of the organization both internally and externally. In addition, risk management systems promote cohesion among company’s employees as well as other stakeholders as they work together behind a shared vision of reducing the incidences of risk occurrence in the organization. It is the duty of each organization therefore, to establish a risk control system that is applicable to its specific circumstances (Poupart-Lafarge 2007). The risk control system should incorporate an organizational framework that defines the roles and responsibilities of all the stakeholders, sets out the procedures, and clearly outlines the consistent standards of the system in order to enhance the attainment of its purpose. In addition, the framework should constitute a risk control policy that sets out the system’s objectives in accordance with the corporate culture that should highlight the company’s approach to the identification, analysis and management of risks in the organization. Further, the system should have an advanced information system that facilitates efficient and accurate dissemination of information within the organization. This ensures that the relevant information is transmitted intended recipient within the stipulated time which consequently enhances performance in the organization. An efficient risk control process manifests itself in a three sta ge process; the three stage process entails risk identification, risk analysis and risk management procedures (Poupart-Lafarge 2007). In risk identification, the company seeks to establish the main risks threatening the company’s attainment of its goals and objectives. These risks may derive from internal or external forces.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Risk analysis on the other hand involves the examination of the potential financial, personal, and environmental as well as the reputation implications of the risk occurrence on the company (Greenberg 1991). This enhances the company’s response to accidents upon occurrence. Further, the likelihood of risk occurrence should be assessed in order to award priority to events most likely to occur. The final step involves risk management procedures whereby the most appropriate action plans for the organization are chosen and executed (Poupart-Lafarge 2007). The organization adopts these measures in order to maintain a certain acceptable level of risk necessary for effective performance of the company. The organizations’ risk control systems seek to reduce the amount of risk, transfer the risk, and accept the risk or to completely eliminate the risks. The company makes the appropriate decision by weighing the costs and the opportunities of risk management measures with due co nsideration of their potential effects on the overall performance of the organization as well as its environs. The organization should subject the risk control systems to periodic supervision and reviews which facilitates constant performance improvement. Critical risk control systems for a nuclear plant Nuclear plant activities carry with them an inherent risk that may negatively affect people or the environment (Heinrichs and Fell 1995). Consequently, the aim of all risk managers in the industry is to maintain risks levels as low as possible. The governing bodies embark on extensive regulation and control of the plant in order to safeguard it from internal and external threats. The United States Nuclear Regulatory Commission protects nuclear materials within the country from misappropriation, sensitive information from unauthorized disclosure, and regulates the use of radioactive materials in the plants in order to protect people and the environment (NRC 2010). Radioactive materia ls pose danger to human life and the environment through exposure to ionizing radiations. As defined by IAEA in 1988, one of the major goals of safety management in nuclear plants is ensuring the protection of the plant’s personnel, the general public, and the environment through extensive defence against radiological hazards (Neeb 2007). The US NRC has implemented various measures to attain this goal. The events of September 11th that resulted to massive losses of lives prompted US to increase its emphasis on security of radio active materials. Consequently, the NRC has been fully dedicated to the process of providing security to nuclear materials without discouraging their beneficial use through the office of federal and state materials and environmental management program and the office of nuclear security and incidence response (NRC 2010). In the modern global energy, nuclear plant management are confronted with numerous dimensions of risks other than radio active hazards . Therefore, the management has to address these risks in order to remain competitive in the global market (IAEA 2001). Due to major advancements in information technology, there is an increased need for securing sensitive information in nuclear plants. Both classified and sensitive information relating to nuclear operations must be protected by the governing bodies due to its delicate nature. This is important since leakage of information to unauthorized persons may in some instances result in threat to national security, or enable unauthorized people to design, utilize or manufacture nuclear weapons (NRC 2010). According to a report by IAEA (2001), the operating system of nuclear plant comprises of three major sectors; safety, productions, and commercial sectors which are embedded within a strategic outline and are interdependent of each other such that a decision made in one of the sectors consequently impacts on the performance of other sectors. An integrated risk control system therefore analyzes these factors and aims at minimizing or eliminating the risk associated with the same. Various bodies have been established to regulate nuclear activities in the world. These bodies award responsibility to the material licensees to maintain security and accountability of the radioactive material in their possession (NRC 2010). The nuclear licensees and security regulators have consequently agreed on a shared vision to ensure safe, secure and efficient utilization of nuclear materials under the Regulatory Nuclear Interface Protocol (HSE 2009). Plant protection and mitigation systems form an additional yet separated system of layers to the control systems by monitoring the nuclear plant variables (Chapin 1997). If these systems detect that the plant monitoring and control systems are not operating in line with the plant’s pre determined set of conditions, they proceed to shut down the plant. The systems (mitigation and protection) are discrete for the reason that they are physically detached from the software and hardware being employed by the firm’s control and operating systems. In addition, they are environmentally designed to survive in the harshest anticipated accident conditions e.g. earthquakes (Chapin 1997). Licensing of risk control systems is governed by the Regulatory Commission in United States. The federal government has established the (DHS) which has the overall responsibility among the federal agencies for assessing the vulnerability of the nation’s critical infrastructure to external threats and coordinating efforts to enhance security of the same. Back in 2005, DHS sought to inspect the nuclear sites in the United States in order to conduct security reviews which would assist them in assessing the risk and consequences of various events likely to affect the nuclear power plants (Wells 2007). This enabled the body to establish the most effective way of allocating federal resources to improve security in t he nuclear plants. For the Nuclear Regulatory Commission, the primary focus is on the security of the sites and the protective measures applied to enhance such security. The NRC staffs possesses vast knowledge and experience on matters relating to threat assessment which comes in handy in the process of assessing the possibility of threat to the nuclear power plant. Through the use of reports and secure data bases, the NRC is able to analyze the information in order to identify specific references to nuclear power plants and to determine the possibility of terrorist attack to the nuclear plant (Wells 2007). Identification of risk control systems Flight control is an interesting yet a technically challenging subject for which a wide range of engineering disciplines have to align their skills and efforts in order to establish a successful control system that ensures that the aircrafts are operated in safe conditions (Pratt 2000). Since airline operations require maximum security and s afety conditions, it is important for the airline management to ensure that the safety standards are maintained at all levels in order to avoid accidents. The causes of accidents and incidents in aircraft operations refer to events or conditions that lead to occurrence of aircraft accident. Accidents on the other hand refer to occurrences that affect the normal operations of an air craft. Accidents may occur during the operations from the time a person boards an air craft to the time that all the people have disembarked from the plane that results into serious injuries to people, damage to the air craft and/or the disappearance of the aircraft (National research Council 1998). In the bowtie, the possible risks for the aircraft are clearly outlined. The causes of risks range from helicopter failure, overloading the helicopter, hazardous cargo on board which may result in aircraft accidents. In order to reduce the probability of such risk occurrences, the management should utilize pro per risk control systems. Aircraft operators should strictly adhere to quality control systems which considerably reduces cases of aircraft failures and accidents. Aircraft owners and operators should ensure that their suppliers are providing them with approved aircrafts which have undergone extensive inspection and approval by the governing bodies. Aviation contractors should ensure that the helicopters are maintained in good and safe working conditions in order to promote safety in the long run. Regulatory bodies should certify effective aircraft manufacturers and constantly inspect their production processes in order to promote continuous quality aircraft manufacturing. In addition, the manufacturers must incorporate the standards upheld by airline operators which ensure that high quality aircrafts are utilized consequently reducing the probability of aircraft failure. Governing bodies should ensure that safety procedures are followed at all levels of operations in order to preve nt helicopter. Aircrafts should be used for the appropriate duties and the operators should be highly qualified. Experienced and qualified pilots have the ability to execute their duties effectively and this significantly reduces the number of accidents. The pilots should accurately calculate the required weight and balance for each trip in order to avoid overloading the aircraft which often result in aircraft accidents. In case of adverse environmental conditions, the pilot has the authority to abort any take off or landing in order to prevent an accident. A competent pilot has the ability to adjust route in order to avoid sudden environmental changes such as storm. However, the airline operators should ensure continuous and accurate monitoring of environmental conditions in order to avoid such incidences. Effective communication among the relevant stakeholders is important in the coordination of aircraft operations. The helicopter landing officer should be in constant communicatio n with the pilot in order to promote safe landing and take off. Pre flight induction and video briefing should be highly emphasized in order to enlighten those on board on matters regarding safety and emergency procedures. Effective and constant communication between the pilot and air traffic controllers has been essential in tracing lost aircrafts in the past. Further, the communication enables the air traffic controllers to establish the accurate time for aircraft landing consequently reducing incidences of helicopter crash at the rig. Functional and survivability requirements Continuous monitoring of the performance and quality standards of aircrafts and airlines is necessary in order to ensure that safety performance is achieved and maintained in the long run (Heldman 2005). Adopting critical risk control systems in the short run reduces the effectiveness of risk control systems in achieving long term objectives of the airline. To avoid such incidences, the airline administratio n should make use of the AIR monitors to guarantee constant execution of safety standards and continuous scrutiny of the producer’s control systems in order to establish the level of protection and to incessantly validate that they are still abiding by terms of the documentation as well as the delegation that they hold. The airline companies should establish solid regulatory bodies which should govern the safety standards in aircraft operations. Regulatory bodies should ensure that the rules and regulations such as IATA which regulates transport of hazardous materials are strictly enforced in order to avoid aircraft accidents resulting from hazardous material onboard. Further, these bodies should ensure that aircraft operators are highly qualified. For instance, the regulatory bodies should ensure that the aviation personnel possess valid helicopter underwater training escape training which they must present before boarding the aircraft. Regulatory bodies should constantly in spect the quality standards in aircraft operations in order to ensure that they are implemented and practiced in the long run. Effective communication should be embraced at all levels of aircraft operations. The management should constantly motivate their fellow employees to maintain safe standards in aircraft operations. Both vertical and horizontal communication should be promoted in order to promote coordination of the operations as well as contribution by fellow employees. Risk control system should be based on the basic fundamental principles of risk identification, risk analysis, action plan, and continuous monitoring of the process. Communication between aircraft operators should be enhanced through the utilization of modern technology which has substantially improved communication in the modern world Performance assessment Although the airline management may implement risk control systems effectively, it is important for them to assess the effectiveness of the system in orde r to achieve the intended objectives. Integration of risk control systems and safety assurance enables the attainment of this goal within organizations. The risk control process enables the management to identify the hazards prevalent in airline operations and the subsequent assessments of these risks. Performance assurance on the other hand takes control of the process by ensuring that the risks controls continue to be practiced within the organization and that they continue to achieve their intended purpose. This system further provides for an opportunity for the assessment of the need for new controls arising as a result of changes in the operational environment (Halford 2008). The management should therefore review the long term objectives of risk control systems and assess the probability of achievement based on current performance. Reference List Chapin, D. M., 1997. Digital instrumentation and control systems in nuclear power plants: safety and reliability issues: final repor t, Washington D. C., National Academic Press. Fell, R., Heinrich, P., 1995. Acceptable risks for major infrastructures: proceedings of the seminar on acceptable risks for extreme events in planning and design of major infrastructures, Sydney, N.S.W., Australia, 26-27 April 1994. NY: Taylor and Francis. Fraser, J., 2010. Enterprise Risk Management: Today’s leading Research and Best Practices for Tomorrow’s Executives. Canada, John Wiley and Sons. Greenberg, R. H., 1991. Risk Assessment and Risk Management for the Chemical Process Industry. Canada, John Wiley and Sons. Halford, D. C., 2008. Safety Management Systems in Aviation. London, Ashgate Publishing Limited. Heldman, K., 2005. Projects Manager’s Spotlight on Right Management. Canada, John Wiley and Sons. HSE. 2009. Regulatory Nuclear Interface Protocol. Web. International Atomic Energy Agency. Risk Management: A Tool For Improving Nuclear Power Plant Performance, Austria: IAEA Web. National Academic Press, 1998. Improving the Continued Airworthiness of Civil Aircraft: a Strategy for the FAA’s Aircraft Certification Service. Washington DC, National Academies Press. Neeb, K., 1997. The Radio Chemistry of Nuclear Power Plants with Light Water Reactors. London, Walter de Gruyter. NRC. 2010. Ensuring the security of radio active materials. Nuclear Regulatory Commission. Web. Pratt, R., 2000. Flight Control Systems: Practices Issues in Design and Implementation. London, Institution of electrical engineers. Telefonica, S.A., 2005. Annual Report on Corporate Governance 2005. Web. Wells, J., 2007. Nuclear Power Plants: Efforts Made To Upgrade Security, But the Nuclear Regulatory Commission’s Design Basis Threat Process Should Be Improved. New York, Diane publishing. Young M L, Stoddard M, Watters J, Nitschke R, Bodeau D., Kertzner P., 2005. Process Control System Security Technical Risk Assessment: Analysis of The Problem Domain. Dartmouth, Dartmouth publishing.