Risk is a concept linked to negative outcomes such as regret, loss and damage. In occupational health and safety (OHS) management, it is caused by the presence of hazards that may trigger harmful consequences such as personal injury or property/environmental damage. The probability of this occurring is the risk associated with it.
OHS practitioners further clarify risk according to time horizons and severity (for example, imminent and serious risk) to prioritize control interventions. The concept of risk, however, remains broad and not differentiated into subclassifications. This has had a significant impact on OHS management. In particular, it has constrained the development of strategic approaches to risk control.
This article presents a model of accident causation - the Entropy Model - that identifies two categories of risk:
- Entropic risk - the risk associated with the degradation of business systems.
- Residual risk - the inherent danger in all organizational activities.
The model provides a balanced, comprehensive approach to hazard control. It also challenges contemporary perceptions of production and safety as incompatible business objectives by illustrating that as systems degrade, performance and safety are threatened. The model has significant implications for management practices, particularly in hazardous industries, laying the path open for the development of organizational cultures in which output and safety are pursued concurrently. It suggests that legal compliance and social responsibility are characteristic of sustainable business practice.
Historically, accident causation models have underpinned the development of OHS management systems. A fundamental weakness of the early models is that they treat risk as a broad concept and fail to sufficiently explain the significance of unforeseen and residual risks. In addition, they do not clearly illustrate how risk is affected by business activity. As a result, a comprehensive, strategic direction for risk reduction has not emerged. The emphasis on worker behavior in these models also is problematic. It can lead to lack of consideration of underlying weaknesses in organizational systems that contribute to incidents. For example, a vehicle rollover may be attributed to human error when the root cause is fatigue caused by excessive hours of work.
A very limited perspective of accident causation occurs when the focus of OHS is on human factors or behavioral safety alone. The implication is that if human error is eliminated, all accidents can be prevented. This does not take into consideration that the firm's efforts to manage hazards are countered by the natural degradation of systems. In addition, there is an inherent risk that cannot be totally controlled by the firm.
If risk cannot be eradicated, how can all accidents be avoided? The presence of residual risk means that they cannot. Consequently, strategies need to be devised to manage inherent danger, and workers need to be vigilant because of it. The majority of accidents can be averted and injuries prevented, provided that the OHS management system addresses natural degradation and these residual threats. This is effectively a shift away from the broad singular concept of risk. The Entropy Model illustrates how these two risk categories are related to business activity. It provides an approach to risk management that managers can apply strategically and at the operational "coal face."
The Entropy Model
There are two types of risk present in organizations. There is residual risk that cannot be completely eliminated and entropic risk caused when systems degrade. Entropy is a measure of disorganization and is defined as "the degradation of a company's system factors." These system factors, shown by the Entropy Model included here, are:
- Processes (work practices);
- Technology (plant, equipment, tools and chemicals);
- Physical environment (location and structural factors); and
- Human resources (people).
Every firm uses technology, people and the work site to generate a product or service. These factors interact when a process is undertaken.
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The model begins in section (1) by creating an organization in an ideal context: The firm consistently operates with perfect safety, production output and systems quality. All factors are fully and effectively utilized. The accident rate and level of risk is zero. In reality, however, firms operate as natural systems subject to universal laws that cause system factors to degrade with time. For example, technology suffers wear and tear, the physical environment becomes unstable or untidy, and infrastructure corrodes. Each time a process is carried out, deviations may occur that have the potential to introduce additional hazards. Workers also experience degradation in the form of fatigue, variable vigilance/concentration or loss of physical capacity.
Entropy is shown in section (2) as the downward dashed lines for each system factor. Running counter to the firm's interventions, system factors have a tendency to deteriorate or shift to a state of chaos. As system factors degrade, the probability of an accident rises exponentially, shown by the red line. Concurrently, the firm's ability to produce output at the same rate is put at risk because the quality of system factors also affects productivity. For example, if people are ill or fatigued, they cannot work efficiently. If equipment is not maintained, it cannot generate optimum levels of output. The model shows that degradation has a negative impact on organizational safety and performance.
The firm has a constant battle against entropy that pushes the level of risk upward. In addition, the company is exposed to residual risk that is fixed in the short term, as shown by the green block. Each system factor contributes to this inherent danger. For example, technologies have design limitations because of resource, economic and know-how constraints. Firms, and society as a whole, accept a level of residual risk that is not reducible in the short term due to the costs involved in making technologies safer. In addition, the physical environment is not 100 percent conducive to business activities. For instance, poor weather makes building on construction sites more hazardous.
The work force also has a residual risk because human beings have cognitive and physical limitations that make them vulnerable to hazards. These inherent dangers require longer-term interventions such as the development and purchase of safer equipment, redesign of process methods, site modifications and investment in training. The firm's ability to minimize residual risk is constrained to the longer-term because of limited resources.
Residual risk is fixed in the short term, whereas entropic risk is variable. System factors do not necessarily deteriorate at the same rate or at the same time. To illustrate, a new business venture, Company A, can be compared with an established operation, Company B.
Company A has state-of-the-art infrastructure and technology. These have a reasonable lead time before they begin to show signs of decay. If the firm's processes were standardized previously at another site, its technology, infrastructure and processes have low levels of residual risk and low tendencies toward degradation in the short term. If, however, its work force is inexperienced, there is potential for suboptimal interaction between workers and other system factors. This can lead to deviations from standardized tasks, inefficient operation of technology and poor housekeeping.
Company B, on the other hand, has older infrastructure and technology showing signs of wear and tear. The level of residual risk and the tendency toward entropic risk in these system factors is relatively higher than in Company A. If work practices have continually been reviewed and the firm has a skilled, stable work force, process-related entropy is likely to be low because employees know how to adhere to safe work procedures. The firms have different sets of variables that affect the nature of risk associated with their operations. Therefore, they must develop risk management strategies according to the characteristics and severity of their systemic weaknesses. In Company A, training is a high priority, while in Company B, maintenance of technology and the physical environment require additional resources.
Referring back to the Entropy Model on page 90, in section (3), when the organization realizes that entropic risk is rising, it has to take corrective action. Next, future recurrences of this risk have to be prevented using a program of maintenance, shown in section (4). Maintenance strategies include job safety analysis to reduce the hazards in processes, proactive upkeep of technologies, sound workplace housekeeping practices, and training to enhance employee competencies and to reinforce the need for vigilance. Effective maintenance lifts the organization to a state of optimal safety, performance and system factor quality, as shown in section (5). The state is stable for a short time after maintenance. If maintenance is not ongoing, however, the effects of natural law cause the system to degrade again, as in section (6). The model indicates that proactive maintenance is an essential part of risk management.
In section 5, entropic risk is eliminated, but residual risk remains. As explained earlier, all system factors contribute to the total level of inherent danger. For instance, the physical environment in underground mines has a high inherent risk attributable to rock instability and potential flooding. Technology has design limitations and hazardous operating characteristics; for example, a circular saw has exposed, sharp, moving components.
Processes have varying degrees of residual risk depending on parameters such as complexity and the physical/mental demands placed on the worker. The more demanding the task (for instance, climbing a firefighter's ladder vs. climbing a stepladder), the more dangerous the process. Workers also introduce residual risks through their limited physical and analytical abilities. In the short term, this risk is difficult to reduce because of resource constraints and, therefore, has to be managed through employee awareness. In the longer term, firms can minimize their residual risk by using financial capital to improve the quality of system factors.
The Entropy Model provides organizations with a strategic approach to managing risk in the short and longer term. The methodology, referred to as the Four-Fold Strategy, addresses entropic and residual risks using a multidisciplinary approach. It involves:
1. Taking immediate corrective action to eliminate entropic risk;
2. Establishing maintenance strategies to prevent future entropic risk;
3. Managing residual risk in the short term; and
4. Minimizing residual risk in the longer term.
How does the Entropy Model lead to a multidisciplinary approach that is integrated into the total management system? The control and management of risks within each system factor requires the input of various specialist personnel. For example, mechanical engineers need to consider residual risks when selecting and purchasing technologies. They also have to develop maintenance plans to counter degradation in plant/equipment. Human resource managers devise recruitment and selection, training and reward systems that develop worker competencies and promote a safety culture, thereby reducing risks within the human resources system factor. Environmental specialists are involved in monitoring the physical site for residual risks such as the stability of a toxic waste tailings dam and prevention of entropy caused by such business processes. The implementation of the Four-Fold Strategy requires the OHS practitioner to play a central coordination and advisory role with the OHS department strategically situated at a senior management level in the organizational structure.
To which contexts do the Entropy Model and Four-Fold Strategy apply? First, the model represents risk in relation to business systems and, therefore, can assist any organization to manage its risks more effectively. By identifying residual risk as a significant threat, it is particularly useful for industries such as mining, construction, chemical manufacturing and oil/gas, which have inherently dangerous processes, large-scale technologies or operate in hazardous environments.
The model also can be applied to nonwork situations including public safety. For instance, in traffic management, it explains the need for effective control processes such as road rules and the importance of road and vehicle design/maintenance and driver training. Traffic management strategies also need to address sources of entropic risk such as driver fatigue and factors such as alcohol, which reduce driver alertness and competence.
Compared to other models, the Entropy Model allows firms to take a more strategic approach to risk management. It does not simply suggest that the presence of one or more variables will lead to an accident or, conversely, that no such events mean that the system is safe. This is an important step forward in the measurement of safety.
In practice, companies can be "lucky" and achieve satisfactory safety results, shown by a low lost-time injury frequency rate (LTIFR), when systems are degraded and residual risk high. The LTIFR is not a sufficient indicator of how well risk is being controlled or managed because it only measures the outcome. It does not assess underlying variables that contribute to accidents.
The Entropy Model suggests that the quality of system factors also should be evaluated. This involves using audit results and other measures of systems quality, such as breakdown maintenance, as safety indicators. The benefits of using a multiple-measures approach is that it provides a better understanding of how effectively the firm is controlling risk and helps to identify areas for improvement.
The model also promotes risk management as good business. Safety and performance are threatened when degradation rises and residual risk is left unchecked. This challenges the perception in production-centered cultures that output and safety are incompatible goals. For example, when the workplace is untidy, it becomes increasingly hazardous and hinders workers from performing efficiently. The model provides the rationale for the development of integrated management systems that pursue production and safety concurrently, which implies that business activities must be legally compliant and socially responsible to be sustainable.
What are the characteristics of an OHS management system driven by the Entropy Model? First, the perspective of "unsafe acts" vs. "unsafe conditions" proposed by other models is replaced with a focus on systems quality. There is much less emphasis on human error as the cause of accidents. It acknowledges that employees do not want to be injured at work and that they rarely knowingly act in an unsafe manner of their own volition. Unsafe acts are usually symptoms of systemic problems such as insufficient skill-based training, work pressures or excessive demands from the task or environment. This emphasis on worker fallibility can hinder companies from exploring fully the underlying parameters that lead to incidents.
Human error is not excluded from the model because the quality of human resources contributes to the level of risk. It may be found, for instance, that an accident is caused primarily by lack of workplace-specific skills (a residual risk) or by the worker operating equipment under the influence of medication (an entropic risk). The Entropy Model allows the behavioral
aspects of safety to be clarified. Behavioral safety management should address the risks associated with human resources and the organizational culture that defines acceptable behavior. The primary objective of the culture is to develop employee competencies and vigilance. A "safe worker" operating in a safety culture, therefore, can be defined as someone who:
- Is educated about residual risk,
- Is vigilant because of residual risk,
- Works safely and efficiently to keep entropic risk low,
- Is informed of changes in entropic and residual risk, and
- Has the knowledge and opportunity to make suggestions that contribute to improved safety, production output and system factor quality.
The Entropy Model allows a multidisciplinary approach to risk control that integrates and aligns OHS with human resource, environmental, maintenance and other management disciplines. It enhances the understanding of risk as a dual construct and provides a systems perspective for hazard control using the Four-Fold Strategy. The model places OHS strategically at the center of total management systems so that safety becomes part of the organizational "lifestyle."
Significantly, the model shows emphatically that safety is good business. When firms allow their systems to degrade, their risk exposure increases and they become less productive. In contrast, well-maintained quality systems allow companies to manage risk, pursue production output and achieve legal compliance and social responsibility. The model provides firms with a balanced, comprehensive approach to managing risk in the workplace and lays the path open for the development of organizational cultures in which production and safety are compatible goals.
Accident Causation Models
Risk is understood and managed as a result of the models used to explain how accidents happen. (Many of these models are described in the Encyclopedia of Occupational Health and Safety, edited by J.M. Stellman, International Labor Office, Geneva.) The Domino Theory developed in 1931 suggests that one event leads to another, then to another and so on, culminating in an accident. It found that 88 percent of accidents are caused by unsafe acts of people, 10 percent by unsafe actions and 2 percent by "acts of God."
Later theories included the Structure of Accidents Model. It identifies immediate causes and contributing causes of accidents. The former involves unsafe acts and unsafe conditions while the latter includes safety management performance and the mental/physical condition of the worker. The importance of systems management is acknowledged. However, this is overshadowed by a strong emphasis on the operator as the primary instigator of accidents.
A number of other models focused on human characteristics, including the Human Factors in Accidents Model. It suggests that the interaction of individuals with the work environment, equipment and other contributing factors leads to adverse effects on work systems, which in turn trigger a sequence of events ending in an accident. Worker error causes equipment design limitations and poor maintenance practices exacerbate these faults, with the combination resulting in an incident. This model encourages firms to invest in safety training to develop worker skills and safety consciousness. A significant weakness, however, is that it attributes all system faults to human error. Strategically, firms cannot achieve the elimination of human fallibility. The broader contributing factors such as the natural tendency of systems to degrade that counter the firm's risk reduction strategies are also not considered by the model.
In the 1980s, individual perceptions of risk and motivational factors became the central theme of accident causation. The Risk Homeostatic Accident Model that applies particularly to traffic accidents introduced the notion of a target level of risk: people have a degree of risk that they choose which affects their health and safety. Using this model, a firm can develop strategies to reduce the level of risk workers are willing to take. In the model, regardless of previous experience and the road conditions, the driver compares the current risk level against his/her acceptable level of risk. The costs and benefits of taking the risk are evaluated before any action is taken, which explains why people are more inclined to break road rules to avoid being late for an important appointment. It highlights the need to influence the motivation for taking the risk and makes sense in the road traffic context. At work, however, this focus on the individual is very limited. Do employees choose to take risks or do workplace factors encourage risk-taking? In the organization, the worker has less control over contextual variables and cannot behave independently.
These accident causation models led to the development of behavior-based approaches to OHS management centered on a singular concept of risk. It was not until the Hale and Glendon Model that the understanding of risk was expanded to included residual risks. The worker acts after comparing the current situation against the desired situation. In the presence of hazards, the employee recognizes, analyzes, prioritizes then develops alternative solutions to manage the risk. The final choice is evaluated which includes planning for unforeseen circumstances and residual risks. There are three types of decision processes that occur and these are based on skills, rules and knowledge. It explains that firms need to provide employees with training to develop these competencies.
In 1991, Reason developed the Resident Pathogens and Risk Management Model. His theory indicates that residual risks are not reducible by purely technological counter-measures. Workers contribute to accidents in high-risk technologies through slips - where actions do not go as planned - and through mistakes, which are deficiencies or failures of judgment. The accumulation of human errors leads to active and latent failures of organizational systems. Reason argues the need to appreciate the presence of residual risks and develop strategies to contain it. This challenges managers to over-ride their assumptions that systems are "safe" and to look for underlying weaknesses in business systems.
About the author: Tania Mol is the principal of Align Strategic Management Services, a management consultancy in Perth, Western Australia. Her concern for employee health and safety stems from a long family association with the Australian mining industry, known to be a sector with a high level of workplace risk. From a professional perspective, she also has concern for organizational achievement and has sought to address both issues by developing the Entropy Model, which considers the impact of risk on firm performance and safety concurrently. She is writing a book that presents a multidisciplinary, integrated management system that applies the model to hazardous industries.