Management and Risk
Personal Understanding of Resilience and Sustainability Frameworks and Systems
Course Convenor: Judy Clarey
Farhad Mahmoudi (2793365) Farhad.email@example.com
Sustainability can simply be defined as the capacity to endure. The word Sustainability is derived from Latin "Sustinere" and in effect means "Uphold". Sustainability in organisation performance is an organised management approach for developing, implementing, and evaluating strategies for optimising the impact of an organisation's objectives relative to its resources, enhances the innovative strength of an organisation through operational efficiency and strategic depth, provides an assessment of an organisation's current performance and the long-term impact on its future success, and last but not least, includes the health, safety, security of employees and contractors, and how the organisation pursues environmental considerations (Stapelberg, 2012).
Resilience can be defined as to jump back. It is derived from Latin “resilire” and generally means quick recovery. This involves both the ability to withstand systematic discontinuities as well as the capability to adapt to new risk environments (Starr et al. 2003, Crichton et al. 2009). Fundamentally, the concept of resilience is closely related with the ability of an element or system to return to a stable state after a disruption (Gunderson 2000, Cumming et al. 2005). Hence, a resilience approach in the face of perturbation is suggested to enable an organisation to adapt to new risk environments (Burnard and Bhamra, 2011).
Resilience and Sustainability
By the definition, sustainability mainly relates to the ability of an organisation to improve continually towards its KPIs and its internal processes and procedures, whereas, resilience, literally, focuses on the organisation’s internal and external environment to respond and adapt to environmental changes. Sustainability also provides management useful information that can serve as the basis for identification and development of new and better products and processes to address those risks and add to shareholder value. Continual improvement is usually described by the PLAN-DO-CHECK-ACT cycle. Stapelberg (2012) highlights that continual Improvement (CI or Kaizen Methodology) is based on five principal measures (KPI-key performance indicator): Quality, Productivity, Schedule, Effort and Cost. He continues effective implementation of CI measures allows an organisation to track performance more effectively to achieve: 1. 2. 3. 4. Better utilisation of resources Enhance Coordination among related projects Improve project planning and estimation Reduce risks of failing to complete schedule and targets
Plan-Do-Check- Act framework idea, is about planning changes and deviation that has taken place against company KPIs, implement their changes, check the desired effect of changes and act on further changes. Figure 1 shows the basic PDCA framework. Sustainability is generally based on five components as (Industryupdate: Sustainability, 2007); Economic Performance Environmental Performance
Social Performance Operational Performance Strategic Performance
As Risks are an integrated part of business enterprise, the desire to take risk and understand it, are fundamental in global economy. Several aspects of risk must be evaluated as an integral part of a sustainability process such as identification, analysis and management of risks that affect current operations, being aware of changes in the corporation and in the environment (Industryupdate: Sustainability, 2007) and Lastly, the risk management program must be expanded to address emerging sustainability risks such as social and environmental risks, some of which may not be fully evolved or capable of measurement in the same sense that corporations normally evaluate traditional risks.