Page 137 - DMGT304_EVENT_MANAGEMENT

Event Management

Notes Introduction

In general everyone has some understanding of the meaning of the word ‘risk’. As children we
are taught that something is risky, or we are told not to take risks. But what exactly is ‘a risk’?

We do things knowingly that there is a risk involved.

Example: We know that there is a risk involved in driving a car, or riding a bike, or
going on a skiing holiday. We accept the level of risk because in our minds, although the
potential consequences can be death or serious injury, we think that if we are careful, the chances
of something dreadful happening is very low.
When we evaluate a risk, therefore, we take into account two factors - the probability of something
happening that we don’t want, and the consequences if it does.
!

Caution Always be careful to reduce the chances of risk

Example: An airplane flight is a very good example. The consequence of a airplane crash
is usually the loss of most, if not all life on board - dreadful. Fortunately, when we fly, the
probability of being in an airplane crash is very small (1 in 52.6 million according to the
National transportation Safety Board). This very low probability makes the risk very acceptable.

Did u know? In fact we all take risks everyday quite happily.
At the other end of the spectrum, there are risks where the probability is very high but the
consequences are relatively low. For example, when we go to work there is a very good chance
that we will catch influenza from a work colleague at some time in the year. The probability of
this happening might be 1 in 4, but if it does happen we will be just laid up in bed for a week and
no serious or long-term damage occurs. This make the risk of getting influenza by going to
work quite acceptable.
So whether we choose to accept or decline a risk depends on the mix of two factors:
probability; and

consequence
Identifying, evaluating and understanding risks is a very important aspect of business
management. Businesses can also suffer dreadful consequences if risks are not appropriately
managed. The most widely understood risks are occupational health and safety risks. Most
people generally associate the word ‘risk’ with injury, health risks and death, but there are many
other types of risk faced by any business.
6.1 Categories of Risk

It is useful to think or risks as falling into two categories:
Risk of harm

Risk of detriment
The risk of “harm” is the type of risk that we mostly think about. The word ‘harm’ is employed
in relation to something living, usually a person or the natural environment. In a sport and
recreation business, the risk of harm would include :

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