Why is the risk of industrial non-routine activities high and how can it be evaluated? An integrated approach.

Non-routine activities such as startup, shutdown, maintenance, and operation commissioning require increased human interaction with the corresponding process. Owing to operator or procedural violations, the risk of accidents can be high during non-routine activities, even though they are performed less frequently. To identify and evaluate the hazards of non-routine processes, an integrated method combining job hazard analysis (JHA), hazard and operability analysis (HAZOP), and deviation degrees is proposed. JHA is applied to break down an operational process into steps, which are further defined as nodes in HAZOP for hazard scenario analysis. The concept of deviation degree is defined by integrating the operational and control function deviations to quantify the deviation analysis. Finally, the heating-furnace startup process in an oil and gas gathering and transmission station was selected to illustrate the proposed integrated method. The results show that this method constitutes a systematical and intuitive approach to identify hazard scenarios and evaluate risks, as well as to establish preventive measures for non-routine processes.

Machine learning and user interface for cyber risk management of water infrastructure.

With the continuous modernization of water plants, the risk of cyberattacks on them potentially endangers public health and the economic efficiency of water treatment and distribution. This article signifies the importance of developing improved techniques to support cyber risk management for critical water infrastructure, given an evolving threat environment. In particular, we propose a method that uniquely combines machine learning, the theory of belief functions, operational performance metrics, and dynamic visualization to provide the required granularity for attack inference, localization, and impact estimation. We illustrate how the focus on visual domain-aware anomaly exploration leads to performance improvement, more precise anomaly localization, and effective risk prioritization. Proposed elements of the method can be used independently, supporting the exploration of various anomaly detection methods. It thus can facilitate the effective management of operational risk by providing rich context information and bridging the interpretation gap.

Time for a paradigm change: Problems with the financial industry's approach to operational risk.

Organizational and risk cultures in the financial industry are argued to be the root cause of banking problems. It is concerning that financial regulators and practitioners still consider the industry to be seriously fragile in several respects, particularly to operational risks and risks associated with digital transformation and innovation-not that the risks of organizational misconduct have disappeared. The rescue of Credit Suisse in 2023 confirms this. This paper employs extant theories of organizational culture, learning, and action to critically evaluate the existing risk paradigm in banking and to highlight its deficiencies, which practitioners can only address by questioning the flawed assumptions and dysfunctional values and behaviors found to be endemic in banks. However, business and risk practitioners are also married to institutional approaches that focus on assessing risk and measuring historical losses to allocate regulatory capital, rather than forward-looking approaches to measure and manage risk. This requires a paradigm change. This paper presents a novel risk measurement and accounting methodology, Risk Accounting, to help underpin such change. Risk accounting measures risk exposure in quantitative and qualitative terms and can be implemented using an AI-enabled digital architecture that could solve endemic problems with risk data aggregation and analysis. Significantly, risk accounting enables a financial value to be placed on risk exposures at a granular level. This level of transparency provides an incentive to change behaviors in banks and support cultural change while providing a basis for a paradigm change in the way operational risk is managed.

Risk profiling of food security impediments using decision maker's behavioural preference towards operational risk management.

For different decision makers, their approach towards management of operational risks differs due to difference in background and behavioural preferences. For such reasons, they attach different importance to various perspectives to manage operational risks. Present study conducts and analyses risk profiling of food security impediments, in which operational risk has come up as an important impediment. Based on three perspectives namely, social, economic, and operational, the research first evaluates severity of impediments in food security. Risk profiling is then conducted on the basis of decision makers' preferences towards different perspectives. Integration of fuzzy set theory and evidential reasoning algorithm along with decision makers' behavioural preferences have been used for the analysis. The proposed model generates a continuum of scenarios towards relative importance of three perspectives. It is observed that despite changing the importance of perspectives, a few risks show robustness in their severity, while other ones are sensitive to small changes. Based on these dynamic changes in risk-percept, insightful risk profiling is presented in this research. The risk profiling approach uniquely helps decision makers to adequately plan their course of actions to deal with operational risks associated with food security.

Sustainable risk management practice in the organization: a Malaysian case study.

Businesses are becoming more conscious of operational risk management practices due to the COVID-19 pandemic. However, some firms practice risk management without fully comprehending how it might help them and their needs. As a result, companies that practice risk management without realizing it are being controlled by the discipline itself. The goal of this study is to look into the epistemic process of risk management practice in the workplace. This phenomenological study interviewed 39 risk management officers, executives, and employees. Data are thematically analyzed. This study discovered five epistemic processes of risk mapping using Foucault's governmentality paradigm. This phenomenological study, interestingly, revealed the black box of risk management practices, as well as the behavior of risk management officers, executives, and risk owners who preferred to monitor the compliance aspects of risk management practices rather than comprehend the capabilities of risk management that could be used within their strategic planning process. Unaware of this black box, organizational actors were blanketed by the organization's culture of fear, which created the impression that the authority was always watching every word said and every action taken. Practically, this study contributes an improved understanding of the real function of risk management that helps them justify the practice and reduce unnecessary fear. The paper concludes with limitations and research recommendations.

Task complexity and operational risk management in military aviation.

Flight risk assessment has been based on traditional tools that are simple to use but not validated for the consideration of all relevant Complexity Contributing Factors (CCFs). This work aims to improve the process of risk management of missions in military aviation and allow for a more thorough examination of Complexity Contributing Factors (CCFs). After a series of structured workshops, a classification scheme of 46 CCFs was developed and tested in a large number of operational missions (n = 227). Principal Components Analysis has verified four complexity classes that provided a structure for the CCFs while multiple linear regression analysis showed that the four classes of complexity correlated well with mission success outcomes. The study provides evidence that the classification scheme of complexity considers a variety of observable markers (CCFs) which can be used to rate complexity and introduce mission changes that create a safety environment for military missions. Practitioner summary: This study develops a classification scheme of complexity with a large number of observable markers (Complexity Contributing Factors) that can be used to rate the complexity of missions in military aviation. Earlier studies on task complexity and a series of workshops with Subject Matter Experts (SMEs) have been used to develop the classification scheme which was validated with data from a large number of military missions.

The institutionalization and processual element of sustainable operational risk management as a best practice in the government-linked organization: a case study in Malaysia.

Global risk concerns spurred a debate regarding empowering an organization's risk management system. Risk assessment, management, and planning are vital for running a firm, but they are not universal. This research investigates how operational risk management is institutionalized in an organization and reveals best practices from a Malaysian government-linked enterprise (GLC). This phenomenological study interviewed 39 risk management officers, executives, and employees. Data are thematically analyzed. Burawoy's Social Theory uses a case study to integrate micro- and macro-organizational elements. The case company's risk management officers, executives, and employees are involved in seven processual factors, according to the analysis. Strong leadership and external consultants, setting up the apparatus and assigning the task to the person in charge, risk framework, risk diagnostic, monitor and measure, developing and nurturing risk management culture, and consistent risk management enforcement and monitoring could explain the institutionalization process of risk management in the organization. Global and local entities have institutionalized risk management. This phenomenological study helps comprehend the role of risk management institutionalization in corporate risk management. This study contributes to a practical implication such as to the GLC. It suggests that top management support and a standard risk framework are necessary for risk management homogeneity. Leaders and frameworks must address organizational processes and capabilities to ensure risk management consistency. This study contributes to the literature on risk management practices in developing nations. The paper concludes with limitations and research recommendations.

Managerial Perception of Risk in an Organization in a Post-COVID-19 Work Environment.

The COVID-19 pandemic drew the attention of all industries and organizations to the importance of comprehensive preparation for various types of crises and disruptions. Without proper risk management for crisis situations, it is impossible to talk about organizational resilience, maintaining organizational continuity, or ensuring the company's ability to protect workers' lives and health in a crisis. While the COVID-19 pandemic is rapidly reshaping the work environment, significant challenges related to risk management are emerging. The purpose of this research paper is to examine the impact of a pandemic on the risk perception in an organization by managers of all three levels (strategic, operational, and line level) and to examine the impact of broadly understood risk management on organizational performance. For the examination of operational risk perception, empirical research was conducted in Polish enterprises. The methodology of the survey is based on a questionnaire of operational risk and risk management perception in a post-COVID-19 work environment. According to the survey results, risk management was generally perceived better than the level of operational risk, compared to the period before the pandemic. Therefore, a substantial improvement in risk management during the crisis allowed the surveyed organizations to cope with the pandemic, and even slightly enhance their performance. Organizations have been able to achieve their goals mainly by slightly reducing risk appetite and lowering the tolerable risk level threshold. Even so, organizations have improved their ability to adapt and seize opportunities.

Operational risk assessment of third-party payment platforms: a case study of China.

Operational risk events have severely impacted the development of third-party payment (TPP) platforms, and have even led to a discussion on the operational risk capital charge settlement by relevant international regulators. However, prior studies have mostly focused on qualitative mechanism analysis, and have rarely examined quantitative risk assessment based on actual operational risk events. Therefore, this study attempts to assess the operational risk on TPP platforms in China by constructing a systematic framework incorporating database construction and risk modeling. First, the operational risk database that covers 202 events between Q1, 2014, and Q2, 2020 is constructed. Then, specific causes are clarified, and the characteristics are analyzed from both the trend and loss severity perspectives. Finally, the piecewise-defined severity distribution based-Loss Distribution Approach (PSD-LDA) with double truncation is utilized to assess the operational risk. Two main conclusions are drawn from the empirical analysis. First, legal risk and external fraud risk are the two main causes of operational risk. Second, the yearly Value at Risk and Expected Shortfall are 724.46 million yuan and 1081.98 million yuan under the 99.9% significance level, respectively. Our results are beneficial for both TPP platform operators and regulators in managing and controlling operational risk.

An options pricing method based on the atmospheric environmental health index: an example from SO2.

Environmental finance has gradually become an important tool for solving atmospheric pollution problems. The creation of options based on an atmospheric environmental health index (AEHI) is designed to support a rational pricing of financial products related to the health of the atmospheric environment. To begin with, the improved Ornstein-Uhlenbeck model is established to predict the change in air pollutant concentrations, and then we construct the AEHI by using exposure-response Poisson regression model. In addition, an options pricing method for AEHI is proposed based on Esscher transform theory, and the universal investment strategy for enterprises is formulated to hedge operational risk by using the AEHI option. Finally, we use Beijing city of China, as a case study to demonstrate how to determine the AEHI options prices for two diseases in three age groups, and propose the investment strategy for an insurance enterprise. The AEHI options should therefore be used to compensate for the damage to human health caused by air pollution, and to hedge against the operational risks of related industries.

The Importance of the Social License to Operate at the Investment and Operations Stage of Coal Mining Projects: Application using a Decision Support System.

The Social License to Operate (SLO) and the Value Chain business model are basic elements that need to be considered both at the planning and operation stages of mining operations and in particular in coal mining projects. If a coal mining enterprise loses its SLO, it may face risks in operations, which may lead to value chain risks. One of the causes of enterprise failure as related to coal mining operations is the inability to reliably assess/manage risk holistically and the inability to understand that lack of SLO is a critical risk. Although financial risks are typically assessed for mining projects, lack of SLO risk should also be taken into account starting as early as the bankable feasibility study. Furthermore, as it is difficult to establish a proactive decision-making policy for SLO risk in coal mining operations, the Operational Risk Management (ORM) methodology is probably a good tool to apply towards that goal. For this reason, a Mining Operational Risk Management Model (MORMM) was developed to incorporate risk probabilities and risk severities evaluated by experts. The final risk assessment is coded using Risk Assessment Codes (RACs). A hypothetical scenario was developed utilizing the MORMM model in order to illustrate how risks can be managed during the SLO granting process. This scenario describes a hypothetical coal mining project evaluated by virtual risk evaluators under specific hazard categories. Risk evaluation involves the assessment of risk probability and risk severity. Through this scenario this paper presents ways: (i) to establish a baseline ORM process that will be applicable to any coal mining operation environment, and (ii) to provide a theoretical example to demonstrate how the method can be applied to coal mining operations. The resulting RACs can provide critical information to decision makers regarding the rejection, acceptance or re-engineering of the mining business plan.

A novel group decision making method for airport operational risk management.

The present research envisages a novel group decision making model to evaluate the operational risk of airports from four aspects of human, equipment, management and environment factors. The proposed model featured an integration of intuitionistic fuzzy set and set pair analysis. Due to the lack of the systematic data and quantitative analysis concerning the uncertainty of these indicators, an intuitionistic fuzzy set was used to characterize them, which converted them into the ternary connection numbers based on set pair analysis. A new distance based on the intuitionistic fuzzy set and set pair analysis was proposed to analyze the consistency degree of any two experts on the same airport operation risk, wherein the degree of contact determined both the uncertainty and certainty of each indicator, so as to obtain the ranking degree of the expert group on the operation risk of all airports. Moreover, the relationship between the value of these indicators and the threshold changes of the airport operation risk ranking was evaluated. This study could be used as an effective tool for transit authorities to rank the operational risk of different airports, by comprehensively considering the viewpoint deviation of different decision makers on the same scheme, and its uncertainty factors. The analysis of the case study comprising four airports in China showed that with an increase in the degree of contact, the operation risk value of the airport in Beijing remained the same that of Tianjin and Qinhuangdao decreased, and for Shijiazhuang gradually increased.

Maximum Entropy Methods for Loss Data Analysis: Aggregation and Disaggregation Problems.

The analysis of loss data is of utmost interest in many branches of the financial and insurance industries, in structural engineering and in operation research, among others. In the financial industry, the determination of the distribution of losses is the first step to take to compute regulatory risk capitals; in insurance we need the distribution of losses to determine the risk premia. In reliability analysis one needs to determine the distribution of accumulated damage or the first time of occurrence of a composite event, and so on. Not only that, but in some cases we have data on the aggregate risk, but we happen to be interested in determining the statistical nature of the different types of events that contribute to the aggregate loss. Even though in many of these branches of activity one may have good theoretical descriptions of the underlying processes, the nature of the problems is such that we must resort to numerical methods to actually compute the loss distributions. Besides being able to determine numerically the distribution of losses, we also need to assess the dependence of the distribution of losses and that of the quantities computed with it, on the empirical data. It is the purpose of this note to illustrate the how the maximum entropy method and its extensions can be used to deal with the various issues that come up in the computation of the distribution of losses. These methods prove to be robust and allow for extensions to the case when the data has measurement errors and/or is given up to an interval.

Clinical application of ultrasound bronchoscopy guided needle aspiration biopsy under general anesthesia / 中国内镜杂志

Objective To explore the application of transbronchial needle aspiration biopsy (EBUS-TBNA) combined with ultrasound bronchoscopy under the general anesthesia (intravenous anesthesia combined with laryngeal mask). Methods 103 patients with EBUS-TBNA from June 2015 to October 2016 were randomly divided into local anesthesia group and general anesthesia group. The anesthesia group was anesthetized with intravenous anesthesia combined with laryngeal mask, local anesthesia group with conventional tetracaine local anesthesia. The differences in the average number of puncture needles, the diagnosis rate, the operation time, the complications and the comfort of each group were analyzed retrospectively. Results The average number of puncture needle in each group was 5.6 times, and the local anesthesia group was 3.1 times. The diagnosis rate of general anesthesia group was 94.12% and local anesthesia group was 78.85%. There was significant difference between the two groups (χ2 = 5.11, P = 0.024). The average operation time in the general anesthesia group was (14.61 ± 1.52), the local anesthesia group was (32.52 ± 4.14), they had significant difference (t = 29.01, P = 0.000). The number of patients in bleeding and cough of the general anesthesia group were lower than those in the local anesthesia group (χ2 = 4.31, 103.00, P = 0.038, 0.000, respectively). Conclusions EBUS-TBNA under general anesthesia has high diagnostic rate, shortoperating time, painlessness, high comfort and reduce operational risk, worthy of promoting clinical application.

Clinical application of ultrasound bronchoscopy guided needle aspiration biopsy under general anesthesia / 中国内镜杂志

Objective To explore the application of transbronchial needle aspiration biopsy (EBUS-TBNA) combined with ultrasound bronchoscopy under the general anesthesia (intravenous anesthesia combined with laryngeal mask). Methods 103 patients with EBUS-TBNA from June 2015 to October 2016 were randomly divided into local anesthesia group and general anesthesia group. The anesthesia group was anesthetized with intravenous anesthesia combined with laryngeal mask, local anesthesia group with conventional tetracaine local anesthesia. The differences in the average number of puncture needles, the diagnosis rate, the operation time, the complications and the comfort of each group were analyzed retrospectively. Results The average number of puncture needle in each group was 5.6 times, and the local anesthesia group was 3.1 times. The diagnosis rate of general anesthesia group was 94.12% and local anesthesia group was 78.85%. There was significant difference between the two groups (χ2 = 5.11, P = 0.024). The average operation time in the general anesthesia group was (14.61 ± 1.52), the local anesthesia group was (32.52 ± 4.14), they had significant difference (t = 29.01, P = 0.000). The number of patients in bleeding and cough of the general anesthesia group were lower than those in the local anesthesia group (χ2 = 4.31, 103.00, P = 0.038, 0.000, respectively). Conclusions EBUS-TBNA under general anesthesia has high diagnostic rate, shortoperating time, painlessness, high comfort and reduce operational risk, worthy of promoting clinical application.