Risk Management Issues in Operating a Retail Petrol Station
Risk management identifies with the prioritization, assessment and identification of risks. Findings argue that risk management is clearly explained under ISO 31000 on issues of uncertainty resulting from risk[1]. Risk has a possibility of generating a negative or a positive outcome. Risk management in most cases is followed by economical and coordinated usage of the available resources in monitoring, minimizing and controlling the extent of possible events considered unfortunate, while at the same time maximising possible positive opportunities[2]. This paper identifies with risk management issues faced by a Retail manager in running a petrol station, which is under the Oil and Gas Brand.
There are different sources of risks in a business entity, and the extent of the risks varies. There are risk management standards, among them being ‘National Institute of Standards and Technology’, ‘Project Management Institute’, ‘ISO standards’ and ‘Actuarial Societies’ among others. Organisations dealing with oil and gas products are characterised with unique risks. The risks are classified as natural risks, daily operational risks and man-made risks[3]. Retail manager in a petrol station dealing with oil and gas products must develop an effective model that addresses systems of risk management within the facility. Risk management systems are developed to offer viable solutions in cases of challenging issues.
The risk spectrum associated with petrol stations identify with: Hazard identification and evaluation (HAZOP, HAZID); blast, fire and dispersion modelling; security threat management; catastrophe evaluation planning and modelling, quantitative risk analysis which includes natural hazards and man-made hazards; risk analysis of the pipeline related hazards; evaluation of facility sitting; construction and design management in ways that the facility is resistant to blast and planning and modelling on catastrophe evacuation. Others types of risks are political risks, geological risks, price risk, terrorism risk, cost risks and supply and demand risks.
Internal and external issues in safety and risk management
Accidents in the oil and gas industry are an indication that some leaders are not sensitive to the appropriate and basic safety engineering practices and technologies[4]. It is possible to manage risk effectively in a manner not to interfere with the profits of the organisation. Risk management must be attended to basing on the sensitivity of the issue in the oil and gas industry[5].
Incidences may be caused by internal factors within the petrol station and external factors outside the control of the petrol station. The paper reflects on political risk and terrorism risks as some of the external causes of incidences and accidents among others and also reflects on diverse models that the retail manger could enforce in reducing chances of incidences and accidents.
Investors in petrol stations must be aware that effective risk management results to success of the facility[6]. General risks are common among companies, such as management risks. Political risk is one of the risks experienced by the petrol stations. Political risk is influential basing on the environment of doing business in terms of regulations. Oil and gas companies are characterised with diverse regulations that are responsible for the operations of petrol stations.
Stable political systems are ideal for the normal operations of petrol stations; shifting political winds must be monitored by the retail managers in setting the right mitigation models of dealing with the challenges[7]. It has been noted that chaos can result in people vandalizing the petrol stations if not burning out the whole facility as way of expressing dissatisfaction and anger.
Political risk is common among the developing issues, although in developed nations, there are pockets of people involved in violence. The best model of dealing with the political risks is by building sustainable and effective relationships. Political risks may be predictable and at other times not predictable.
Terrorism is common in the twenty first century; an indication that the retail manager at the petrol station must be aware that terrorism is live. He/she should set mechanisms of managing the condition. Terrorism according to researchers is characterised with systemic usage of violence to cause terror. A good example of terrorism identifies with the world trade centre terrorism attacks in New York. A series of similar attacks has happened United States, an indication that the retail manager must be prepared with terrorism attacks.
Terrorism may originate from political, religious, deliberate attack, ideological goals and general disregard to safety measures. Terrorism creates fear and is considered as an unlawful attack. It has been noted that the oil and gas industry has a number of cartel that at times unleash terrorism as a way of covering up misdeeds.
Internal causes of accidents in the oil and gas companies
Common factors that trigger accidents in the oil and gas industry identify with safety culture flaws, poor commitment to issues of safety by the leaders, poor change management procedures, poor hazard design and analysis, confusion in system safety and occupational safety, general belief that process accidents are part of the organisation, poor reporting and communication systems and poor methods of learning basing on past experiences[8].
Safety culture flaw in a company is a major cause of accidents in the oil and gas industry. It has been noted that organisational culture within the petrol station is responsible for shared norms and values, in which decision making processes depends on[9]. Safety culture must be encouraged by the retail manager in petrol station as a reflection of the safety culture of whole organisation. The approaches and attitudes towards safety and to issues of risk management make a difference at the end of the day. It is expected of the retail manager to set the right safety culture in the firm, and incorporate it into the core values of the organisation[10].
If the retail manager is sensitive on safety and risk management, he/she will be in a position to spot abnormalities related to safety and risk management. Dysfunctional safety cultures are easily recognisable basing on the general operations of the petrol station, which in return prompts the retail manager of the firm in taking the necessarily corrective measures in safety and risk management. Firms with unrealistic risk assessments are characterised with credible warnings which ends up in culture of denial, an indication that such firms does nothing to improve on safety and risk management.
The retail manager must be willing to do away with issues of culture of denial, where accidents in firms are assumed to be normalcy and part of the business cycle[11]. It is important for the top management team to accept receiving challenging issues, not only expecting good news. There are people working in oil and gas industries arguing that the field has diverse risks and that nothing can be done to improve the conditions, the retail managers at the petrol station must devise models of convincing such people on the necessity of safety and risk management[12].
Retail manager at the petrol station must incorporate paperwork culture with realistic issues that are happening on the ground. Paperwork culture involves the employees spending substantial time setting arguments on the safety of the firm, it is important to be realistic and face safety and risk management issues with practicability. Paper safety culture must be aligned to the firm’s actual safety and risk management issues. Paper safety culture must not be relied upon in the expense of the real safety and risk issues in the organisation.
There are leaders that lack commitment to safety and risk management issues. Surveys done in organisations have shown that organisations with high levels of accidents are characterised with poor commitment to issues of safety and risk management. In the same way, the retail manager at the petrol station must be willing commit the whole team to safety and risk management in averting any possible dangers.
Poor or nonexistent change procedures related to the management contribute to high number of accidents in the oil and gas industry. It is argued that most uncoordinated changes in the oil and gas industry has a capability of sparking accidents, in that the retail manager at the petrol station must ensure that all the change procedures within the firm are coordinated[13]. The best way of coordinating is by ensuring that open and honest communication prevails. Surveys have shown that most firms have clear guidelines on the change procedures drafted in the books, but what happens on the ground is different to the reality, in that the change procedures are ignored, a factor that contributes to accidents[14].
The retail manager at the petrol station must ensure that he/she performs hazard design and analysis in making sure that the safety levels within the facility are high. Inadequate hazard design and analysis involves placing effort in investigating and recovery from devastating events. This is not the right approach, the top management teams must develop mechanisms of designing and incorporating safety and risk management issues in the firm.
The retail manager at the petrol station must ensure that the reporting systems and communication is not flawed. Surveys on accidents indicated that large number of unsafe working conditions and accidents were previously detected, and that if open communication was fostered, then the accidents could have been averted. If the reporting system is flawed, there are possibilities that the message will not reach the top management team, or the top management team would ignore the message, meaning that the firm is left exposed to accidents. Open communication and open reporting systems are critical in ensuring that high levels of risk management are maintained.
Findings indicated that most devastating events in organisations are felt after the firm ignores prior minor events[15]. Prior accidents and incidences must be used by the retail manager at the petrol station in formulating sound safety and risk management models. In a number of times, top management teams often investigate such incidences with superficiality. It is important to investigate the events and incidences in depth in understanding the levels of safety in the firm[16]. If the firm ignores the signals, sophisticated games of introducing changes follows but the accidents continue to take place, in most cases the game in the organisations is referred to as the ‘whack a mole’ and is characterised with the wrong approach in problem solving. Majority of investigations on accident focus on the errors made by the operators, an indication that the underlying issues are not addressed, presenting another chance for accidents.
It will be important for the retail manager at the petrol station to focus on the systematic and management factors that could lead to negative issues on safety and risk management. It is true that technical factors and operator influence could trigger accidents, but there are other critical issues that must be confirmed in the petrol station. Researchers argue that human errors contribute to existing safety problems in an organisation, and that human error is not actually a cause. It is believed that the behaviours of human beings are regulated by a system or context of the accident.
Minimizing the operator error will involve the retail manager to address the core issues in functioning of the petrol station. Some of the common issues attached to the operator errors are based on the design of the firm, unclear operating procedures and conflicts in goal setting in the production unit. Human errors in the petrol station indicates that the retail manager must redesign the working model, and that involving the employees in the decision making processes is the best in building rapport and teamwork[17].
Technical errors in the petrol station provides a basis of investigation shedding light on the issues that caused the process to permit errors indicated or not noted during testing and reviews. The main reason of the investigation is to define the root cause of the accident. Defining the root cause is not an easy process, and requires a critical look, else it leads to illusion of control. It has been noted that incidences and accidents are complex, and if the investigators oversimplify the causal factors, there are high tendencies that future incidences and accidents will not be preventable. Performance audits on the petrol station will enable the retail manager identify possible causes of incidences and accidents, hence an important tool in the safety and risk management. Physical and social components of the petrol station must be pegged to constant improvements in relation to the safety and risk management.
Confusion between system safety and occupational safety
Occupational safety in the oil and gas industry focuses on managing and controlling injuries that happens in the workplaces in protecting human beings. Occupational safety is more on pegged to the human behaviours that lead to the accidents in the workplaces. On the other hand, system safety is concerned on the design of the system, an indication that the retail manager at the petrol station must be concerned on the design of the facility[18]. The design of the facility is directly proportional to the operational components and engineering components of the facility.
Confusion of the two models in the petrol stations could emphasize on safety measures in one area and ignoring a number of other critical areas. Top management teams emphasize on the occupational safety or the personal safety assuming that both components will protect the firm from other hazards. Risk management in oil and gas industry calls for conclusive considerations of the safety metrics on the system.
There are high tendencies that incidences and accidents in firms always have low probability of occurring. Some of the top management teams argue that accidents are characterised with high consequence but with low probability. It is important for the retail manager in the petrol station to shun such arguments and embrace modern methods of enhancing safety and risk management in the organisation[19]. Oil and gas industry is a unique one, an indication that special measures must be observed in dealing with the issues. Accidents in petrol stations are rampant; taking an example, a car may ram at the pump dispensers sparking fire. If the attendants at the petrol station are ill prepared, the results may be devastating.
Safety and risk management is the solution to incidences and accidents
Safety in oil and gas industry has been considered critical, and that preventing incidences and accidents in the petrol station requires that each and every component must be working excellently. Failure to coordinate all the components in petrol station could result to devastating situations[20]. Assumptions make people ignore the underlying dangers. Failed components have a capability of generating high levels of risk in the petrol station. An example is sealing any forms of leakages in the firm; the trait can prevent possible dangers. Safe behaviours among the employees and customers could also reduce risk, examples being discouraging smoking near the pump dispensers. Enforcement of law and order in the facility plays a critical hand in enhancing safety and risk management.
Flaws in issues of safety and risk management are regulated by the organisational culture within the petrol station. Workplace culture is not influenced by the size of the organisation. Each and every organisation can develop a competitive edge, in that it influences the business operations[21]. Workplace culture in the petrol station will enable the retail manager to improve safety and risk management, increase productivity, increase marketability and enhance unity among the employees.
Safety and risk management in petrol stations are emphasized by setting controls. Setting an organisational culture, emphasizes on safety and risk management structure that must encourage open communication models that make reporting effective and a better way of mitigating safety and risk management in the petrol station[22]. Strengthening safety and risk management in the oil and gas industry calls for providing change incentives on the safety culture, observing the standards in the oil and gas industry, setting own industry policing, observing updated safety management systems, engaging safety engineers in setting operational models involved in decision making, offering training and certification to the employees, learning from past events, taking precautions on hazard analysis, making sure that maintenance is done in the right time, allowing third party certification by the regulating authorities and allowing effective change management[23].
Safety management in the oil and gas industry is characterised by the mitigation of many risks that exist in the industry, considering that the petroleum products supports almost each and every economic activity. Disruptions in the petroleum industry indicate that the nation would result to nationwide crisis. Retail managers in the petrol stations are encouraged to develop and enforce mechanisms that encourage high levels of risk management[24].
Bibliography
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