Risk management and IOTWMS in Indonesia? How efficient is it?

Crisis management systems are expanding everyday and use of this knowledge is getting wider along with technology improvements. One of good examples of new crisis management systems develoed is The Indian Ocean Tsunami Warning and Mitigation System (IOTWMS) which is supposed to help in reducing damages of tesunamies. During this article we have discussed the about the efficiency of this system and the conclusion shows that this system have helped to decrease the risk of damages considerably.

Southern Asia is regarded as one of the most jeopardous areas in the world. Proximity to India ocean  along with special geographic conditions have all made this area of earth, a hazardous situation for life and an interesting area for academics in risk management. One of the countries of this area is Indonesia. Indonesia is situated along the most prominent and dynamic mainland edge in the Indian Ocean, which is called Sunda Arc. The location of Indonesia makes it one of the worlds’ most hazardous areas in the world due to proximity with Indian ocean and consequently according to tectonic movements and geographical position, many natural disasters occur in this country such as the earthquake of magnitude 9.3 on December 2004 which affected the whole Indian ocean and followed by a terrible Tsunami leaving Indonesians defenseless both before and after the hazard.

Figure 1- a schematic presentation of the way IOTWMS operates

In recent decades there have been diverse efforts to address natural hazards and minimize side effects. One way to tackle this risk down is early warning systems. The researches show that early warning systems can decrease side effects of such hazards considerably because lack of strategic preparation and inefficient plans for post hazards, intensify negative effects. Accordingly, Indian Ocean Tsunami Warning and Mitigation System (ICG/IOTWMS) system was installed in Indonesia after devastating earthquake of 2004. Distinctive features of this system is its comprehensiveness since it covers full chain of risk management from early warning to decision making assistance for decision makers.

In academic reviews, there exist varied views the way to consistently address disaster risk mirrored in various analytical ideas and models of various qualities. They vary from the fundamental abstract framework of disaster risk community to spot risk because the interaction of hazard, exposure, vulnerability and capability measures. To a posh framework for finding out the interface and reciprocal interactions that link human to nature referred to as coupled human-environment system. Among those the options of the pressure and unleash model (PAR model) and Cardona’s holistic perspective of vulnerability and risk had the strongest influence on current researches. PAR model understands the disaster due to the interaction between socio-economic pressures because the underlying factors of vulnerability and physical exposure to the venturous event. whereas Cardona’s understanding of vulnerability takes into consideration 3 aspects, that of physical exposure and physical vulnerability, the fragility of the socio-economic system (prevalent aspects of individual self-protection) and lack of resilience to cope and recover (aspect of collective self-protection.

CRED EM-DAT information center has stated that between 1900-1999 natural hazards have caused death in the 86.9% cases because of famines, in 12.9% resulted from floods, earthquakes and storms, and in less than 0.2% according to volcanic eruptions, landslides and wildfires. It should be also taken into consideration that rapid onset hazards such as earthquake and floods and tsunami ask for different dealing toolkit than slow-onset hazards such as draught or deforestation and based upon natural characteristics of a rapidonset hazard, a specific strategy is required.

Risk management is the systematic effort made by members of the organization, together with stakeholders outside the organization, to prevent crises or to effectively manage them when they occur.

Some say that risk management consists of three main stages, which are risk management before, during and after the crisis. Before a risk occurs, three key activities must be performed: forming a risk management team in the organization, creating a scenario that shows the worst possible situation, and defining standard executive procedures for carrying out pre-risk activities.

In the event of a crisis, three main activities should be performed: focusing on disseminating news and information that is of public interest, appointing a spokesperson for the organization, and sending professional messages and reports to the media. After a crisis, two main activities should be done: identify the causes of the risk for future uses and communicate with stakeholders to inform them of the consequences and effects of the crisis.

Risk management is a process to prevent a risk or minimize its effects when it occurs. To perform this process, one must plan for the worst situations and then look for ways to manage and resolve them.

If we define risk management as risk management planning, then there are four steps to risk management planning. Adverse events must first be predicted, then contingency plans must be drawn up, then risk management teams must be formed and trained, and finally plans must be piloted and practiced to complete the plans.

Crisis Prediction and Investigation of Crisis and Vulnerability Points

In crisis auditing, regular methods are used to find crisis and vulnerability points. When managers have a series of questions such as “What will happen if that happens?” And “If so, what will happen?” “Unfortunate” scenarios are discussed. At this stage, the use of “crisis classification” may be useful and fruitful. Some crises, such as the sudden death of a key manager, are possible for all organizations; Hence it is easily conceivable; However, it should be noted that each organization, according to its specific characteristics, has its own vulnerabilities and must plan to deal with them; For example, a plane crash is a catastrophic and imaginable crisis for passenger airlines.

Preparing a contingency plan to deal with a crisis

Contingency plans to deal with potential crises are set up in a set of support programs to be used in the event of a problem. Contingency plans should be organized as much as possible; Identify all accident warning signs, take steps to neutralize or mitigate the critical design situation, and anticipate the expected results of each action. In preparing contingency plans, full attention should be paid to the details; So that sometimes it is necessary to predict who should use the mass media to inform the people about a catastrophic accident when faced with a crisis. It is also necessary to specify exactly what actions should be taken in what circumstances and what measures should be taken if the initial measures are not implemented. In some organizations, a person is introduced as the “spokesperson of the organization” to answer questions from the press and Be mass media and communicate with people in times of crisis. Also, sometimes a list of names of individuals and managers who should be informed about critical and emergency situations is prepared and provided to the relevant factors. In some cases, the telephone numbers of local radio and television programs are in the directors’ office. Contingency plans should be updated at least once a year, so crisis audits should be updated. However, if necessary, action should be taken at shorter intervals to update the crisis audit and to formulate contingency plans to deal with the threats posed by the crisis.

Forming a Risk management Team and Manpower Training

Risk management teams in organizations are similar to law enforcement task forces that are formed to deal with emergencies (such as hostage-taking). These groups have a variety of specializations depending on the type of crises that are likely to occur. For example, the Ministry of Energy’s crisis team may consist of a press interview expert, an electrical engineer, a subscriber affairs expert, and a legal advisor. The ability to respond quickly and inform people in a timely and effective manner is a key feature of any risk management team. A study by the American Institute of Management shows that after the events of September 11, 2001 in the United States, the formation of risk management teams in American companies has increased, so that before the incident 38% of companies had a risk management team, but after that, About 54 percent of American companies had a risk management team in 2002 and about 62 percent in 2003.

Completion of programs through pilot implementation

Risk management teams can be trained, such as sports teams or firefighting teams, and trained to increase “teamwork experience”, “effectiveness”, and “reaction speed”. At this stage, the use of “simulation techniques”, “practical practice”, and “imitation” is very useful. Of course, top management should support such exercises to increase people’s motivation to play their roles and trainers to realize the importance of their work, therefore, effective and appropriate systems should be used to reward employees’ efforts in this area so that they can practice. Be seriously motivated to deal with the crisis.

Risk management models:

Thierry and Mitraf Risk management Model

Thierry and Mitraf state that effective organizational risk management, apart from the type of crisis, involves managing the five distinct stages that crises go through: (1) identifying or tracking symptoms, (2) preparedness and prevention, (3) destruction control, (4) recovery, (5) learning. This model starts with identifying or tracking the symptoms of the crisis and then ends with the learning process from the recovery phase, and then the learning outcomes return to the first phase, and so on. Clearly, the first two stages are pre-crisis stages and involve active risk management. Any effort or activity during these stages will go a long way in identifying, preventing, or preventing potential crises in the early stages. In contrast, the third and fourth stages are the post-crisis stages during which any activity takes place as reactive or passive activities that are an attempt to resist or tightly control a emerging crisis or to minimize devastation. Its possible. By comparison, proactive risk management is of particular importance to any business organization because it will prepare the organization in many respects to deal with unwanted and unexpected crisis situations and put it in a favorable position in the event of a crisis. For the emergence of such a management, three main activities must be performed: (1) creating a risk management plan, (2) forming a risk management team, and (3) regular training of personnel to deal with crises.

Reactive model versus proactive model

Basically, in critical situations, crisis is looked at in two ways: reactive 1 and reactive. Organizations can either ignore the warning signs and react to a crisis, or they can prepare for and manage the crisis in advance. In the first case, the consequences of the crisis are not clear, but in the second case, not only does it provide opportunities for risk management, but it can even lead to crisis repulsion. In the reactive model, crisis decisions are made during or after events, but in the passive model, decision-makers anticipate different forms of crisis as well as plans to deal with them. The first step in the passive model is crisis pathology analysis, which tries to identify vulnerabilities in the organization as well as the factors influencing the occurrence of the crisis. Slater has provided a model for identifying the factors influencing an organizational crisis. In this model, managerial and organizational characteristics affect the effectiveness of the decision, and then environmental variables and competition, along with the effectiveness of the decision, shape the extent of the crisis. Environmental variables and sudden changes in the environment include changes in markets, suppliers and suppliers, economic, political, social and other factors. Management characteristics include: the capabilities and characteristics of human resources as well as the capabilities of managers, their leadership methods that have a great impact on the type of decisions and the ability of the organization to deal with the crisis. Organizational characteristics include the size of the organization, resources, structure, executive and control instructions, and that affect crisis situations.

Crisis life cycle and strategic approach to it

Crisis life cycle states that each crisis goes through several stages. Classifying a crisis based on its life cycle is useful for managers in identifying coping strategies at each stage of life and even how to stop the crisis.

Conclusion

As a result organizational risk management is a systematic process in which the organization tries to identify and anticipate potential crises. Then take precautionary measures against them to minimize its effect. In order to carry out this process, it is necessary to determine at what stage of the crisis the crisis is in its life, in order to be able to make the right decision regarding preventive measures or any appropriate action, and to implement the correct methods.

Author: SeyedMasih Ghaziasgar            

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