SUBJECT NOTES & STUDY GUIDE
for
RISK PERCEPTION AND ANALYSIS
Module 1 Topic 1
The Background
SWINBURNE CODE: RSK80003
RISK MANAGEMENT PROGRAMS
SWINBURNE UNIVERSITY OF TECHNOLOGY
Derek Viner
2017 Semester 1
RSK80003 Risk Perception and Analysis
TABLE OF CONTENTS
Subject information 2 ……………………………………………………………………………………………..
Topic 1: The background 3 ……………………………………………………………………………………..
Introduction 3 …………………………………………………………………………………………………………………….
A scientific approach to the subject of Risk 3 …………………………………………………………………………
Defining Risk 6 …………………………………………………………………………………………………………………..
RSK80003 Risk Perception and Analysis
Subject information
Introduction
This Unit is concerned with pure risk, in which the chance of something adverse exists. It is
specifically not concerned with speculative risk in which the chance of a win exists, for example
when investing money. As the introductory subject in the course, it is intended to provide a
coherent introduction to the subject and a context for the remaining subjects. To do this, it
covers a number of topics at an introductory level only.
Module One is an introduction to the subject of Risk.
Module Two is about risk perception in society
Module Three is an introduction to the analysis and quantification of Risk
Aims and Objectives
The purpose of this Unit is to provide an introduction to the study of Risk
Knowledge
Participants should:
• Be familiar with personal and social perspectives on risk imposition and acceptance in
society Understand the threat and vulnerability model and the risk management process
model
• Understand the principles of risk estimation and assessment
• Be aware of formal methods of analysis of processes leading to damage, damages and
loss
• Understand the distinction between pro-active and reactive approaches to risk
management
Learning Resources
These study notes are written on the assumption that students will avail themselves of the
recommended text, lecture materials and readings.
The recommended text is Viner, D (2015) Occupational Risk Control: predicting and
preventing the unwanted. Copies of this are available in the library in both hard copy and
electronic form. You may find the associated web site www.derekviner.com of value as it is used
to provide examples and commentary on the chapters of the book.
Lecture materials include written notes for each Module, one or more lecture videos (and an
audio-only extract of them) and PDFs of slides.
A number of papers are available through Blackboard in the Learning Material link.
Derek Viner is available to assist understanding through E-mail (dviner@swin.edu.au) and Skype
(derekblviner) contact. You are encouraged to make early contact by email to advise of your
involvement in the subject.
Derek Viner, Sem 1, 2017 Page!2 of 7!
Faculty of Science, Engineering and Technology, Swinburne University of Technology
RSK80003 Risk Perception and Analysis
Topic 1: The background
Introduction
Psychologists realise that people vary greatly in their perception of risk. Social scientists study
the risk perceptions and behaviours of groups in society and uncover extraordinary complexity.
Engineers, medical researchers and many others have recognised the need for rational and
objective concepts and tools to assist with understanding the nature of risk, estimating its extent
and evaluating the adequacy of designs and operational practices. Formal academic and
practical work in these fields has occurred since shortly after the second world war.
More recently, in fact from about the early 1980s, safety and health practitioners in industry
began to see ‘risk assessment’ as a critical activity and to understand that ‘risk’ is the concept
that underlies ‘safety’. A decade or so earlier than these developments in ‘safety’ thinking,
industrial insurance began to be seen as just one part of a more complete set of risk
management concepts.
Today, ‘risk’ and its management is the basis of an industry of advisers and consultants
practicing in almost every branch of industry, but particularly those involving high capital value,
high political sensitivity and high responsibility or liability. Standards bodies around the world
publish risk management standards, which are used by these risk management practitioners to
guide their practices and services.
This surge in commercial activity has lead to the development of a gulf between the practices
and beliefs of the commercial practitioners and the knowledge and concepts of the scientific
researcher. Commercial practitioners do exist who ask for evidence that methods and ideas
work, but they are not in the majority.
As a consequence, the meaning of ‘risk’ and ‘risk management’ in many industries has a
character that is peculiar to the industry, or even to a company within an industry. Collectively,
the whole subject areas of ‘safety’, ‘risk’ and ‘risk management’ have taken on a form and
content that has grown from a set of beliefs and half-truths that are now regarded as selfevident and seldom or never questioned.
As this subject is offered in a Faculty of Engineering and Industrial Sciences, the content of the
subject is based more on the formal academic heritage of the subject than on the currently
popular versions practiced in industry. If you have spent some years exposed to industrial or
commercial practices you are likely to approach the study of this subject with a set of
preconceptions that make it harder than necessary to understand what we present here. This
subject presents concepts that conform to the laws of logic and physics, which have been
subject to peer review or its equivalent and published in the public domain.
If you study here and then experience the practices of industry and commerce you will be
almost certain to apprehend differences. While one person is not able to change a whole
movement, you can do justice to your post-graduate study by being one of those who asks
“why?” and asks for the evidence, but don’t expect good answers to either question!
A scientific approach to the subject of Risk
Science is characterised by the intelligent, repeatable and objective (as far as possible)
observation of the world in which we live and by logical deduction from those observations such
that principles can be derived that make it possible to understand the mechanisms at work in
the chosen field of study.
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RSK80003 Risk Perception and Analysis
There are, of course, non-scientific ways to look at the world. These give rise to beliefs and
suppositions, which may or not be capable of objective proof. For example, in some cultures,
animal sacrifices are made before workers start a shift in a mine, the purpose of which is to
ensure protection from the spirits of the mines and a safe day of work.
The scientific discipline of physics arose from metaphysics, of chemistry from alchemy and of
astronomy from astrology. The great physicist Newton was himself an astrologer. In Italy, in the
romantic era, there was a firm belief amongst the wealthy (who were, it seems, always and for
good reason scared of being poisoned by their enemies) that a Unicorn horn standing on the
dining table was a means of preventing poisoned food from harming those who dined there.
Curiously, no-one seems to have thought of seeking experimental evidence as to the veracity of
this claim.
Once these studies were subject to objectivity and experiment (let’s check if that is really true)
progress began to be made, different gases were discovered, a theory for why apples fell was
developed and so on. These romantic philosophers were as likely to discover Oxygen as to
write a sonnet. They were, it seems, rounded polymaths. These early scientists (although the
term had yet to be coined) were finding their way towards an understanding of what became
known as the scientific method.
The scientific method involves a strongly interactive process of:
Observation and description, where attention is focussed on some phenomenon of
interest and efforts are made to describe it objectively. This may include measurement,
recording colour and shape and weight etc.;
Hypothesis, where theories are created in an effort to explain what is observed or
measured;
Testing of the hypothesis to see if it applies in all cases and whether it may be used to
extend understanding. Scientific knowledge progresses by people asking “why?” and by
making strenuous efforts to show that the hypothesis is NOT correct. This is not a
negative activity, but a highly positive one. If I say I think something happened
because…, then I expect every other interested scientist to try to disprove me. If they
can’t, it adds some weight to my hypothesis, which might then be accepted, tentatively,
by others.
It is now generally agreed that the characteristics of the use of the scientific approach to a
subject are:
• The use of defined terminology, which is part of a body of knowledge that transcends
national borders
• The preparedness to consider, or even to welcome, evidence that does not conform to
generally accepted views
• The adoption of a process of investigation (the Scientific Method) of the universe that has
structure and values objectivity and repeatability
• The acceptance of principles and laws that have been discovered by prior research only
until they can be proved to false or limited in their application.
A scientific approach requires a clear understanding of preconceptions. For example, if it is
evident to us that the sun revolves around the earth, our understanding of the universe will be
based on this “fact”. That we share this preconception with everyone on earth does not make it
correct.
People who are scientists do not form groupings based on beliefs but on proven facts. They
want to know what the evidence is. They do not reject evidence that their assumptions are
incorrect or become defensive when faced with such evidence. In short, science is not a social
or democratic activity. A majority view may well be proved incorrect. In past centuries, a person
saying that the earth rotates around the sun would be ridiculed by the populace and opposed by
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RSK80003 Risk Perception and Analysis
the hierarchy (in this case by the Church and possibly with life being threatened for heresy), but
now even the least educated lay person accepts this as obvious.
The famous German philosopher Arthur Schopenhauer (1788-1860)‑1 said:
“All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third,
it is accepted as being self-evident.”
Schopenhauer’s stages of the acceptance of knowledge and indeed the whole discussion
above is very relevant to our understanding of Risk, as the majority of people in our modern
technological society do not share a scientific concept of the idea of ‘safety’ and ‘risk’. The
introduction of any concepts in this subject that do not align with the common understanding will
most likely be subject to ridicule and most likely also to opposition. The general populace are
quite emotionally concerned, whether they are aware of it or not, with the topic of ‘safety’.
The current era is one in which the majority are aware of the need to ‘do a risk assessment’ and
most of us have stories to tell of apparently ridiculous highly risk-averse decisions that arise
from this process – such as the need to cut down a tree at the entrance to a child care centre
because the tree drops seed pods and people might slip on them: “you can’t leave the tree
standing because it is not safe” (true story). It is also common knowledge in the community as
a whole that it is essential to find the ‘cause’ of ‘accidents’ in order to prevent more of them
happening. You only have to watch the TV news: “police are investigating the cause of the
accident”.
Now, given the preamble on metaphysics, alchemy and astrology, one could say with some
considerable justification that the common understanding of the present subject has more in
common with the notion that the sun orbits the earth (in the days when that was just a ‘given’ in
society) than it does with a scientific understanding. Scientific progress in the study of Risk is in
its early days (in my view it began in the mid 1960s in the USA2) and it is making a shaky start.
These introductory words are aimed at making you think:
• Maybe I can’t fluke my way through this subject relying on my preconceptions
• Maybe there is something worth learning that will contribute to my professional career.
I believe there is. One only has to look at the world news to notice that clearly humanity is not
clever at two things:
1. Designing to prevent things going wrong, and
2. Designing to limit the damage when things do go wrong.
How many disaster can you think of reported in the last year? Dam failures, factory explosions,
land slides, train crashes and so on.
Having said that, the overall intent of this subject is to offer you insight into what this field of
study can be when it is approached in a scientific manner. Be prepared to use terms strictly as
defined, to not use certain terms as they are not defined, to confront your own preconceptions
and beliefs and to develop a depth of understanding of possibly how this field can be
understood that is not itself based on a new set of beliefs (that is not our intention as this is
opposed to the idea of scientific enquiry) but on practicality and critical enquiry.
A pure scientific approach to the study of risk would be characterised by efforts to objectively
describe, measure and explain. As the subject is studied for the practical purposes of better
!1 http://ift.tt/1Xf5ghr, seen 16/12/2010
2 Haddon W, Suchman H and Klein D (1964) Accident Research: Methods and Approaches, Harper and
Rowe, New York
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RSK80003 Risk Perception and Analysis
managing risks in society, an applied science approach includes an interest in the identification
and evaluation of risks and risk reduction/control processes.
In the field of risk, many words are used that are part of everyday language. People talk of
accidents, chance, causes, risk, likelihood in everyday speech. In legislation, in Standards and
in conversation, many terms (eg. ‘risk evaluation‘, ‘risk assessment’, ‘risk analysis’) are used
interchangeably and without consistent definition.
The words we use originate from or express the understanding we have of the subject.
Accident is a term associated with the ideas that “accidents are caused” and “accidents are
sudden and unexpected events that cause injury and damage”. Risk is a term associated with
the uncertainty of with (mostly) bad happenings. Colloquial terms reflect commonly-held views,
not scientifically-derived ideas.
Common usage is reflected in legislation and different legislation may have different meanings
for the same terms. See for example, the efforts made by the European Network of Safety and
Health Practitioner Organisations3 to collect a list of terms to be found in European Union
legislation. The resulting definitions have been scrutinised by legal advisers. Such a process is
not typical of a field of academic endeavour. In the scientific world, the opinion of lawyers is not
sought on definition of terms to be used. It is impossible to imagine a zoologist asking legal
views on the words used in the classifications of mammals, for example. As a consequence of
this being an effort to collect terms used in legislation, the result does not include definitions of
prime terms used within the source material itself (for example terms such as accident and
cause).
In making use either of ideas to be found in the refereed literature or arising from logical
deduction, this subject makes use of a set of terms which are internally consistent within these
notes and which do not necessarily conform to colloquial stereotypes of the community at large
or a community sub-set, such as a commercial company.
Particularly, please note that the approach used does not make use of the accidents are caused
colloquial way of thinking about this subject.
Hence our emphasis in this subject is on carefully defining the terms we present and expecting
you to demonstrate in assignment work your understanding of the definition and ability to make
use of it. There is no intent to promote these ideas as the right or only way to look at this
subject. Obviously, doing so would be the opposite of a scientific contribution. There is an
intent to use the assignment tasks as a means of promoting skills in the application of logical
thought and academic rigour in the application of a theory.
Consequently, in every response to the questions set to guide your study and serve as
assessment material we expect you to use terms and ideas exactly as they are defined.
By completing this study, you will surely like to think that you have achieved something more
than simply reinforcing the preconceptions gained during childhood or by exposure to the risk
management programmes of your employers. You may therefore be in a position to make small
or large steps towards improving the practice of risk management in the organisations in which
you subsequently work. Heavens knows, we need that!
Defining Risk
Although a more recent meaning of risk comes from the French risque and Italian risko meaning
the “chance of loss”, its origins are believed to go back to the Greek word rhiza meaning “cliff”.
Here sailors attempted to sail as close to the land as possible while having to take care not to
go too close to the cliffs and thereby endanger their lives.
3 http://www.eohsterm.org.
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Faculty of Science, Engineering and Technology, Swinburne University of Technology
RSK80003 Risk Perception and Analysis
There are numerous vague, incomplete or circular definitions of risk to be found in Standards,
legislation and dictionaries. A typical dictionary defines risk in terms of “the chance for disaster
or loss, hazardous, danger”.
A credible definition of risk and used in this subject, is provided by Rowe (1988) as:
“Risk is the potential for the realisation of the unwanted, negative consequences of an event.”
Derek Viner, Sem 1, 2017 Page!7 of 7!
Faculty of Science, Engineering and Technology, Swinburne University of Technology
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