Risk Management Responses

The management at the Principal organization developed three strands in their SCRM response to the key risk sources and drivers perceived and evaluated. All three strands involved developing a much closer relationship with all 40 distributors, involving changes to the stractures, processes, systems and interactions that governed their principal-agent relationship at that time. These three initiatives comprised  

The development of shared Management Information Systems, based on the principal s own extensive database plus regular market research reports (e.g., official UK vehicle registrations for agriculmral equipment competitor sales analysis by brand and model within individual post codes, areas and regions). This type of information on market developments, market shares and competitor activities would normally not be available to the distributors due to the cost of acquisition. 

The Principal organization sought to manage the risks in the downstream supply chain through a process of close collaboration, effective communications and the building of trust within the relationships. The development of Performance Standards was not seen by the distributors as the imposition of a risk management strategy to protect the principal but rather a collaborative approach that resolved the risks within the chain to the mutual benefit of all partners. 

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The fust stage was a diagnosis of the scope of the problem of public safety related to coastal structures, and the review identified potential responses to this problem. The second stage developed a systematic approach to the selection and implementation of hazard mitigation measures and risk management responses to improve public safety. 

After the initial risk categorization, the next step in the risk assessment process is the systematic identification of hazards associated with the project. Hazard discovery is the responsibility of all members of the system safety working group and others associated with the project. Other risk management responsibilities are dependent on the level of the risk, with decisions involving more significant risks reserved for senior commanders or managers. 

However, the most effective way to fix accountability for health, safety and indeed risk management responsibilities is by financial accountability of directors and managers. 

The Health and Safety at Work etc. Act (HSW Act), 1974, instituted a system of enforced self-regulation which placed primary responsibility for health and safety with industry. It charged companies with risk management responsibilities which ideally involved companies in developing risk management systems and rules to secure compliance and also entailed worker participation (Ch. 6). But, as Dawson et al. (1988 44) warn, the creation of health and safety structures and procedures within a company is an imperfect measure which does not in itself indicate an improvement in health and safety. Indeed their own case studies demonstrated that compliance with the formalities did not necessarily indicate a serious and established concern to improve standards of health and safety (1988 87). There is therefore a need to consider the impact of these structures in terms of the difference they make at an everyday level. As Stone (1975) comments, the key task is to make bureaucracies think like responsible individuals, so the systems and decision-making processes they institute are critical. 

What are the primary risk management responses employed ... 

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