DEVELOPMENT OF RISK CULTURE FRAMEWORK AND ITS ASSESSMENT METHOD

1. DEVELOPMENT OF RISK CULTURE FRAMEWORK AND ITS ASSESSMENT METHOD

2. TYPOLOGY OF ORGANISATIONAL RISK BEHAVIOUR HIGH RISK PROTECTION Effective Risk Control (Elimination / Mitigation) Leading to Reduced Exposure POOR UNDERSTANDING OF RISK GOOD UNDERSTANDING OF RISK LOW RISK PROTECTION Ineffective Risk Control (Elimination / Mitigation) Leading to Increased Exposure

3. TYPOLOGY OF ORGANISATIONAL RISK BEHAVIOUR Based on the concept of “Four States of Man” coined by Hon. Charles Haddon-Cave HIGH RISK PROTECTION Effective Risk Control (Elimination / Mitigation) Leading to Reduced Exposure RISK AVERSE RISK SENSIBLE POOR UNDERSTANDING OF RISK GOOD UNDERSTANDING OF RISK RISK IGNORANT RISK CAVALIER LOW RISK PROTECTION Ineffective Risk Control (Elimination / Mitigation) Leading to Increased Exposure

4. TYPOLOGY OF ORGANISATIONAL RISK MANAGEMENT PROFILE Based on the concept of “Four States of Man” coined by Hon. Charles Haddon-Cave & ISO 31000 / ICAO SMM

5. PROPOSED RISK CULTURE FRAMEWORK

6. PROPOSED RISK CULTURE ASSESSMENT FRAMEWORK

7. RISK CULTURE ASSESSMENT FRAMEWORK CASE STUDIES – PROJECT PLAN

8. Edgar H. Schein – Organizational Culture and Leadership

9. BIBLIOGRAPHY THE FOLLOWING SLIDES INCLUDE SOME OF THE CONCEPTS, FRAMEWORKS, MODELS THAT INFLUENCED THE DEVELOPMENT OF “RISK CULTURE FRAMEWORK” AND ITS ASSESSMENT METHOD. THE FRAMEWORK IS ULTIMATELY BASED ON THE CONCEPT OF ‘FOUR STATES OF MAN’ WHICH WAS FIRST COINED BY SIR CHARLES HADDON-CAVE. (RISK IGNORANT, RISK CAVALIER, RISK AVERSE AND RISK SENSIBLE)

10. Amitai Etzioni - Comparative Analysis of Complex Organizations (1975) https://courses.lumenlearning.com/alamo-sociology/chapter/reading-formal-organizations/

11. MARY DOUGLAS - GRID & GROUP CULTURAL THEORY (1980s) The above diagram was presented in IRM Guidance on Risk Culture (2012)

12. Edgar H. Schein – Organizational Culture and Leadership (1980s)

13. JOHN ADAMS – RISK THERMOSTAT (1995)

14. GERALD WILDE – RISK HOMEOSTASIS (1998)

15. Goffee & Jones – Organisation Culture - Double S Model (1996) https://hbr.org/1996/11/what-holds-the-modern-company-together

16. REASON – AN INFORMED SAFETY CULTURE (1997) just culture Prof. J Reason reporting culture 1997 learning culture flexible culture 2016 risk culture?

17. Quinn & Cameron – Organisational Culture based on Competing Values Framework (1999)

18. Cooper’s Three Aspects of Safety Culture (2000)

19. David Snowden - Cynefin, A Sense of Time and Place (2000) https://pdfs.semanticscholar.org/c212/4184cca09d5e4f82f856cf3f68cfad330282.pdf

20. DAVE MARX – JUST CULTURE (2000s) & GAIN - ROADMAP TO JC (2004) three categories of human behaviour (by David Marx) Reckless (Negligent) At Risk (Risk Taking) Error (Mistake)

21. Guldenmund’s Redefinition of Safety Culture (2010) (Based on Schein’s Organisation Culture Levels)

22. RISK CULTURE MODEL (Institute of Risk Management) (2012)

23. ATTRIBUTES OF A GOOD RISK CULTURE Literature Review from Cranfield PhD Thesis (2012) Sources: (1) HM Treasury (2009), (2) Office of Government Commerce (2007), (3) Doudu et al. (2003), (4) Hillson (1997), (5) AON (2007), (6) Funston et al. (2007), (7) Standard and Poor (2007), (8) Deloitte Touche Tohmatsu (2006), (9) PricewaterhouseCoopers (2004), (10) Reynolds (2003), (11) PricewaterhouseCoopers risk culture survey (2009), (12) Economist Intelligence Unit (2009) (13) IRGC (2009), (14) Economist Intelligence Unit (2007).

24. FOUR STATES OF MAN – HADDON-CAVE (2013) “PIPER 25” OIL & GAS UK CONFERENCE ABERDEEN -19TH JUNE 2013 SPEECH BY THE HON. SIR CHARLES HADDON-CAVE “LEADERSHIP & CULTURE, PRINCIPLES & PROFESSIONALISM, SIMPLICITY & SAFETY – LESSONS FROM THE NIMROD REVIEW” Four states of man There are to my mind four states of Man: Risk Ignorant, Risk Cavalier, Risk Averse and (the state what I advocate in Nimrod one should aim for) Risk Sensible.18 My big message is to encourage everybody not to be Risk Ignorant, Risk Cavalier, or Risk Averse, but to be Risk Sensible. It is tempting to parcel risk and the ‘safety thing’ up into neat packages, PowerPoints or graphs and statistics and, after a committee meeting with all the ‘stakeholders present’, tie them up and hand them back to the relevant corporate risk department with a pat on the head and a thank you. Risk is Safety, however, is everyone’s personal responsibility. And it starts at the very top – and should cascade right through the organisation. Being Risk Sensible means embracing risk, unbundling it, analysing it and taking a measured and balanced view. What I want to do is encourage everybody, from the top to bottom of every organisation, whether military, civilian, public or private, governmental or NGO, to embrace risk and responsibility on a personal and collective basis. Unbundle risks, look at the pros and cons and make sensible decisions. Everybody has a role to play, but the role of you as leaders is critical to this endeavour. In times of increasingly scarce resources and financial pressures, how do you get that balance right? One of the ways is to focus your time, energy and resources on areas that you think really matter in terms of outcomes. Don’t be misty-eyed about safety. Be hard-nosed. Look at the stats and see what you most common, serious and habitual risks are and target those. Share and discuss knowledge, experiences, concerns and outcomes with colleagues, industry and regulators.

25. PWC Australia – “Safety in program design” (2015)

26. ISO 31000:2018 - Risk management — Guidelines (2018)

27. Reviewing the Safety Culture Literature

28. Literature Review – DIMENSIONS OF SAFETY CULTURE

29. Literature Review – DIMENSIONS OF SAFETY CULTURE

30. Literature Review – DIMENSIONS OF SAFETY CULTURE

31. Literature Review – DIMENSIONS OF SAFETY CULTURE

32. Literature Review – MATURITY OF SAFETY CULTURE

33. Literature Review - Diverging Approaches to Assessment of Safety Culture ACADEMIC APPROACH (THICK DESCRIPTIONS) ANALYTICAL APPROACH (SURVEY RESEARCH) PRAGMATIC APPROACH (EXPERIENCED-BASED)

34. Literature Review - Diverging Approaches to Assessment of Safety Culture (Guldenmund, 2010) Academic Approach: Thick Descriptions The primary research methodology of this approach is field research or ethnography, which is qualitative in nature. Its purpose is to describe and understand a culture rather than evaluate it and, hence, it is non-normative or value free. Applied to organizations, culture is considered as something an organization is, rather than has. Moreover, what an organization currently is, is largely the result of what happened in its past, its history; either as a realization of its founder’s convictions or due to particular significant events. This approach can also be labelled academic because it is seldom used outside the scientific realm. The research methodcan be a narrative study, a phenomenological study, a study using grounded theory, an ethnographic or a (historical) case study, or various combinations thereof. It typically begins with a problem definition or an issue turned into a problem to obtain a clear focus for the investigation, for instance, a discrepancy between safety priority in an organization and performance, as mentioned above. Data collection techniques include interviews, observations, document studies, literature research, and whatever else an organization brings forth that may hold clues for its underlying assumptions. What is important, however, is that information is collected with sufficient context to allow for accurate interpretation of the resulting data. Research findings are almost never quantifiedbecause it is meaning and interpretation and not some numerical abstract following this approach. Moreover, if (some) quantification occurs, numbers are never taken as data abstracted from an objective world, which would be in conflict with the research paradigm. The research outcome is a “thick description,” or even a theory of the culture of an organization. The description or theory may be accompanied by summary statements, core categories, or basic assumptions. If the theory turns out to be incomplete or “wrong,” it is adjusted to accommodate the contrasting empirical findings.

35. Literature Review - Diverging Approaches to Assessment of Safety Culture (Guldenmund, 2010) Analytical Approach: Survey Research In the analytical approach, safety culture is typically studied using (self-administered) questionnaires, which is the primary research instrument of social and organizational psychologists. This approach can be considered “analytical” in that safety culture is taken to be an attribute of an organization, that is, something an organization (currently) has, rather than is and it is therefore much more concerned with the organization’s present. The analytical approach employs predominantly realist and (semi)quantitative methodology. Its preferred research technique is a standardized questionnaire that is typically self-administered. It can be administered either group-wise, for instance, at the start of a company training session, or sent to workers’, or other subjects’, home addresses. However, it can also have an interpretive aspect to it. For instance, although the questionnaire should have a solid theoretical underpinning, as reflected in the chosen concepts, a subsequent analysis should not assume that these concepts will be present in the data too. On the contrary, an interpretation of the results could reveal new concepts that were not envisioned initially. Ultimately, the final goal is to develop a robust set of general concepts (factors, dimensions, scales) on which organizations can be assessed and, if required, compared. These latter characteristics make the analytical approach, in contrast to the previous academic approach, well suited for comparative research. Such comparisons are, in principle, value-free, that is, the mean scores do not have an evaluative sign, although the underlying individual responses might be based on such evaluations, preferences, or perceptions. Several important aspects to this approach are sometimes overlooked. One, numbers obtained from rating scales are at the ordinal level of measurement; that is, the numbers represent a ranking but their mutual, psychological distances are not necessarily similar. When such numbers are treated as though they are at a higher measurement level (i.e., interval, ratio), the researcher should at least check whether this assumption is sufficiently justified. Two, although safety climate is not equal to culture, it is still an emergent property of a group and therefore the within-group agreement, its statistical coherence, should be tested. There are several indices available for this purpose. Three, groups have to be defined at different, but meaningful organizational levels, which have identifiable possibilities and means for interaction, for example, the overall organization, the department or unit level, or the team level.

36. Literature Review - Diverging Approaches to Assessment of Safety Culture (Guldenmund, 2010) Pragmatic Approach: Experience-Based The third and last approach to safety culture research described here evolves around three important features of an organization that are thought to interact to generate a desired level of safety performance. These aspects are structure, culture, and processes and they are dynamically interrelated.(33,48) Taken together they also provide the context in which behaviour, and hence also safety-related behaviour, takes place.3 Organizational structure can be defined as “the division of authority, responsibility, and duties among members of an organization.”(49) Structure is primarily the formal framework of an organization, that is, how the work is done and by whom.4 From the point of view of management, an efficient structure facilitates both effective coordination and communication.(50−52) Culture is then often understood to be the basic assumptions, the underlying tacit convictions of an organization. For instance, as the general manager of a company once declared: “We need a lot of supervisors because our people need to be watched constantly.” Such a conviction will be found reflected in the structure of an organization and therefore also on the work floor. Processes are the patterns of activity taking place throughout an organization, often divided into three levels: the primary processes, which deal with the main output(s) of an organization; the secondary processes, which support the primary ones, for example, management, quality control; and the tertiary processes, for example, formulations of policies and strategies, designed to drive and support both the primary and secondary processes. These three processes are often associated with operational, tactical, and strategic levels of organizational action.