Structural Conditions For Updating Internal Working Models Through Shared Operational Risk
Internal working models update only when unhedged, symmetrical operational risk forces the brain to abandon expectations of solitary threat absorption.
operational hazard
Meaning
Systematic risks describe the potential for loss resulting from inadequate or failed internal processes, people and systems. In the framework of risk management, an operational hazard includes the environmental and procedural factors that increase the likelihood of a functional failure. These hazards are distinct from market or credit risks because they originate within the boundary of the organization itself.
Evaluation of these factors involves identifying points of failure in the workflow and the physical environment that could lead to injury, data loss, equipment damage or service interruption. The term applies as long as there is an active process being executed by human or automated agents.
Failure Mode
Operational failure modes represent the specific way a process breaks down. Identifying these modes allows for the creation of redundancies that prevent a single error from cascading into a total shutdown.
Mitigation Protocol
The protocol for mitigation involves the use of checklists, audits and safety equipment. These tools reduce the probability of human error by offloading some of the regulatory burden from the individual to the system.
Response Requirement
Response requirements are triggered the moment a hazard is realized. Resources must be diverted immediately to contain the damage and restore functionality. This diversion of attention and funds is the primary cost of failing to manage the hazard proactively.