This paper is a discussion on the topic of risk management in the events industry. The paper is based on the question as to what extend is risk management essential in the events industry.
The paper explores the topic in detail and especially pays special attention to the essence of risk management, through the presentation of the two sides of the debate.
The paper uses examples to explain various arguments. It draws from various academic sources including books, journals and web resources. At the end is a conclusion which sums up the main arguments of the paper.
The first issue to arise in risk management is the nature of risk management. It is important to underscore the fact that every one of us wishes that the future was as predictable as possible.
In fact, if it were possible, everyone would like to have the ability to determine what would happen in the future so that all the plans which we have may go on without any form of hitches (Yeoman, Robertson, Ali-Knight, Drummond, McMahon & Beattie, 2004).
A risk as an event or anything which is foreseen to happen in the future with some negative effects on a subject or an object. It is associated with uncertainty of what the future may hold for a particular entity, be it a person, group of persons or organizations. Some people may confuse a risk with an uncertainty.
While a risk can be measured in terms of probability of happening, it is not possible to calculate the probability of an uncertainty happening (Rutherford, 2008).
Since it is not always possible to foresee the future or to correctly predict what may happen in the future, it is necessary to put in place some preparedness measures so as to minimize the negative effects of a negative future.
That is why we have risk management, which is defined as the process of identification, assessment and prioritization of the possible risks (Tarlow, 2002).
The events industry has various risks just like any other industry. Various events ranging from concerts, festivals, tradeshows, sporting events, political events and various types of ceremonies have their unique risks (Stellman, 1998).
These events are usually undertaken by organizations which do event management as a business. Examples of risks which are associated with the events industry include risks related to financial, legal, security, safety and environmental aspects (Glenn, et al 2010).
The organizations concerned with events management are therefore obliged to do all what it takes to ensure that all the possible risks are properly mitigated. A recent example of a risky event is the Washington hayride in which 40 people were injured (Ashutosh, 2009).
All event planners dream of organizing very successful events so as to gain some good reputation not only from the participants of the event but also from other people, companies or organizations which may like to hire them for similar services. In most cases, they are always successful. This makes them assume that all is well but they forget that there are some situations or issues, if not well addressed may lead to fatal accidents or injuries (Tassiopoulos & Damster, 2004).
What many event organizers usually don’t know is the fact that the issue of safety is of paramount importance when it comes to events planning and venue management (National Research Council 2000).
They are usually pre-occupied with other secondary issues such as security, insurance and the terms of their contract with their customers. Their assumption is that these issues of security, insurance and contract comprise or guarantee safety but that is not always the case (Events safety, 2011).
Safety is about identification of hazards and adverse effects and their mitigation.
Contracts on their part just stipulate the agreement between the event planners and their customers; security has to do with surveillance for any suspicious characters or activities while insurance has to do with the protection of the parties to the contract of an event.
In order to ensure there is safety, event planners and venue operators should not only be proactive in planning for safety but also ensure that there are emergency services available at the event venues (Shone & Parry, 2004).
For example, in risky events such as riding competitions, the organizers may have ambulances for taking the injured to hospitals. A comprehensive plan in the event industry should therefore include emergency plans, security, insurance, safety and the contracts.
All taken together guarantee the event planners and venue operators of a truly successful event (Tum, Norton & Wright, 2006).
Another important aspect of event management is information gathering. Those who organize events must take the responsibility of knowing from their clients what experiences and challenges they have encountered in past events and how they dealt with them. It is not wise to dominate the show by ignoring them.
This is because they can provide very crucial information which, when supplemented with what the planners have, make an event a success, which of course is the overall goal.
However, many organizers are over pre-occupied with securing contracts, and assuming that the events would be success because another previous event was also successful. What they forget is that each event is very unique and therefore generalization can only help in increasing the chances of risks happening.
The planners should therefore take each event as unique and try to look for any indicators of incidents happening and then narrow down to those indicators to come up with mitigation strategies (Ammon, Southall & Nagel, 2010).
One reason why risk management is essential in the events industry is because it enables organizations to plan appropriately for the resources at their disposal and carry out all logistical arrangements for a particular event.
Since risk management entails costs, it enables organizations charged with events management to allocate resources appropriately so as to avoid future crisis (O’Toole, 2002).
Risk management also allows organizations to engage in continuous re-assessment of the organizational processes so as to keep the process of risk mitigation on track. This enables organizations to keep on doing the necessary changes to their operations so as to maximize their output and profit.
It is worth noting that once an organization maximizes its output or profit, it becomes more resistant to some risks (Sadgrove, 2005). Risk management is also essential because it enables organizations to diversify their operations.
What this means is that due to the fear of the unknown, organizations usually find themselves doing more than one type of event, the reasoning being that if one event is affected by risks, then the organization can still generate income from other events.
Risk management in the events industry is also essential because it creates employment opportunities for many people. It also cushions owners from huge losses through risk transfer (Robinson, 2000).
Risk management in the events industry however has its limitations, which sometimes may render it not essential. One of them is that it may delay or sometimes halt the happening of a certain event. This happens especially when the process of assessment of risks takes long time to be completed.
This sometimes may render an otherwise very viable event from happening or kicking off due to the fear of the unknown (Goldblatt, 2008).
Risk management sometimes may interfere with the programming of some events if the process of risk assessment is done in a continuous manner.
For example, a very important tournament may be postponed due to an anticipated risk like lack of enough security in the stadium. This may kill the spirit of the fans (Coles, Smith & Tombs, 2001).
Sometimes the process of risk assessment may be done in an imperfect manner leading to a situation where by an organization allocates too much resources for risks which are unlikely to occur.
This means that those resources are underutilized or in short, resources which are supposed to be utilized for profitability are kept pending, only for the risks not to occur. In this case therefore, risk management is not essential.
This is because the organizations are better placed to retain the risks and channel the resources for risk management to other profitable activities or events (Wilson, et al, 2003).
However, it is not possible to predetermine what will happen in the future, the future meaning any time which is not past and present. This brings in a controversy of our wishes and the uncertainty of the future and therefore the need to predict what would happen.
In the process of predicting what would happen, we always pay particular attention to the effects the future may hold for us (Figlewski, 2002).
Risk management is about doing probabilities. One approach used in risk management is to identify the risks with the highest probability of occurring as well as the risk with the worst negative effects to a business or organization. These are the risks which should be given priority.
There are those risks which have minimal probability of happening and have minimal effects to the organization. These are the risks which an organization may opt to overlook or retain (Duffey,B & Saull, 2008).
Various strategies exist for managing risks. One of them is to set up an event with in-built risk containment measures. This implies organizing an event which is not prone to risks. For example, an organization may opt to organize an indoors event instead of an outdoors event.
An event may also be organized in a way that the risks would not have devastating effects on it (Douglas, 2009).
Another strategy would be to transfer the risks or put otherwise, share the risks. This happens through insuring an event against any form of risk, both likely and unlikely. Insuring an event is seen by many as the sure way of cushioning events from uncertainty (Goldblatt, 1999).
However, this is not always the case because some insurance companies may play game and fail to compensate the policy owners.
Other risks are impossible to insure. For example, when there is war, it affects both the insured events and the insurance companies, which makes it impossible to cushion the events from the effects of war (Abkowitz, 2008).
The other strategy is to avoid doing a risky event all together. Since risk management is supposed to be an integral part of any event; the organizers of events usually evaluate the possible risks before establishing the events.
The assessment of the risks enables the organizers to know whether the event is viable or not. If the assessment indicates huge risks, then it is prudent to avoid the event all together and look for a different form of event with fewer risks (Andersen & Schrøder, 2010).
However, avoidance of risks is not always the best strategy of risk management. There is a popular saying that failing to risk means risking to fail. What this means is that there is no event without risks.
Even the lives we live are full of risks (Khatta, 2008). When one enters a vehicle for example, that should be considered a risky undertaking for the mere fact that the vehicle can be involved in an accident.
Therefore, it is always good to organize an event and hope for the best and prepare for the worst if it happens (Macdonald, 2004).
Another way of managing risks is by doing a continuous assessment of the event and reassessment of the possible risks in an event or organization.
This enables the organizations to make the necessary changes in their processes, functions and operations so as to stream line them with the risk mitigation measures adopted by the organizations (Frenkel, Hommel & Rudolf, 2005).
Reassessment enables the organizations to avoid the shock of the risks, some of which may force organizations to close down (Wagner, 2009).
Conclusion
The paper was based on the topic of risk management in the events industry. Risks are of various types and they range from bad weather to more devastitating risks such as a stampede which can lead to massive deaths. The process of risk management includes identification of risks, assessment and prioritization of risks.
Identification involves speculating all the possible risks while assessment involves evaluating the risks and their impacts to a business while prioritization involves determining which risks are more costly and have high probability of happening and vice versa. Various ways exist for mitigating risks.
They include avoidance of a risky event, transferring of risks, continuous re-assessment of risks and organizing events with in-built-risk containment measures.
It is essential for organizations charged with event management to do risk management because it enables them to plan and allocate resources appropriately. Risk management also cushions events from adverse negative effects of an unforeseen future.
However, risk management may sometimes be non essential especially when it leads to delay in starting of an event or stopping it at the midst. Sometimes the process of risk assessment may be erroneous, which leads to wrong prioritization of risks.
When this happens, huge resources are kept aside for managing risks which are very unlikely to occur. This leads to underutilization of resources and thus minimization of profits or attainment of organizational goals.
The decision as to whether it is essential to undertake risk management or not should be left to organizations or individuals to decide. The best prescription for risk management is avoidance of any event or activity which has risk(s). However, this has been challenged by those who argue that failing to risk means risking to fail.
This serves to encourage people to engage in various types of events and activities bearing in mind that risks can happen or fail to happen and therefore the best thing to do is to organize events hoping for the best and preparing for the worst.
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