F. Operations
Skill 2. Manage Risk
- 2.1 define risk management
- efforts to protect assets, earning power and human resources
against unexpected loss
- 2.2 identify objectives of risk management
- a) minimizes potential loss and liability, e.g. financial, property,
personnel
- b) enhances image and professionalism of business
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- 2.3 describe ways to manage financial risk
- a) obtain line of credit from financial institution
- b) define credit policies and terms of sale:
- ensure understanding and agreement by all parties
- ensure quick assets are available for emergency situations
- c) maintain cash flow
- d) limit amount of borrowed funds:
- money borrowed has to be paid back
- e) allocate portion of income to costs before spending profit
- f) arrange for bank to collect funds for contracts in foreign
currency:
- avoids fluctuating exchange rates
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- 2.4 develop risk management plan
- a) perform risk analysis, determining:
- what is exposed to loss or liability, e.g. people, property,
cash
- what could cause loss or liability
- who could suffer loss or liability
- when damage or loss might occur, e.g. seasonal fluctuations
- what financial consequences could occur
- what damage could occur to reputation
- what is possible maximum loss
- b) consider risk management techniques, for example:
- loss prevention, e.g. security, incorporation, copyright
- risk financing, e.g. insurance, hold backs, payments, liens,
factoring
- spreading risk, e.g. take on partners/investors, incorporate
second company, require partial payments
- risk control, e.g. safety precautions, employee training,
maintenance programs
- contingency plans for:
- recovery after loss
- alternate equipment, accommodations or procedures to
allow operations to continue
- c) select techniques to manage risk:
- seek professional advice, if necessary
- d) implement techniques, e.g. train staff:
- take active role in claims handling
- e) evaluate risk management plan on ongoing basis
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- 2.5 prepare for emergencies
- a) identify possible emergency situations, for example:
- personnel:
- absenteeism
- medical
- special needs
- environment:
- fire
- flood
- storm
- hazardous-waste handling
- crime:
- robbery
- vandalism
- pilferage
- b) determine where insurance is needed
- c) purchase insurance:
- consider special needs, e.g. transport of equipment
- d) familiarize employees with appropriate responses to emergency
situations:
- provide training
- post emergency procedures and telephone numbers
- explain necessity of reporting details, e.g. date, time,
action taken
- conduct regular safety drills
- f) ensure first aid kit is:
- accessible
- fully stocked
- meets facility requirements
- g) conduct routine safety audits, for example:
- ensure employees know location of emergency equipment, e.g.
first aid kit, fire extinguisher, fire alarm
- ensure emergency equipment is operational, e.g. fire extinguisher
is charged, emergency lighting is operational
- ensure emergency access routes are clearly marked and unobstructed
- post signs outlining emergency procedures
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- 2.6 respond to emergencies
- a) remain calm
- b) assess situation
- c) follow appropriate emergency procedure
- d) call emergency authority:
- follow instructions of emergency authority, for example:
- evacuate building
- provide requested information
- e) meet emergency personnel and assist as directed
- f) record details of emergency by documenting:
- date and time of report
- nature of emergency
- time authorities were contacted
- time authorities arrived
- action taken
- names and telephone numbers of witnesses
- g) follow up, for example:
- inform appropriate agencies, e.g. insurance company
- take action to prevent recurrence
- secure area
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- 2.7 maintain facility and equipment
- a) identify information sources for repair and maintenance,
for example:
- operating manuals
- reference books
- building and safety codes
- lists of contractors and tradespeople
- b) determine maintenance and repairs required, for example:
- preventative maintenance
- daily operating and safety checks
- repairs of nonfunctioning equipment
- c) determine who will perform required maintenance and repairs,
considering qualifications, for example:
- self
- employee
- hired contractor, e.g. licensed electrician, janitor
- d) have maintenance and repairs performed
- e) follow up, e.g. ensure repairs are complete
- f) document maintenance and repairs, e.g. comply with warranties
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