Fundamentals of Risk Management

Control of selected hazard risks 
281
Large organizations usually have personnel and/or human resources expertise avail-
able in an HR department. There has been a general feeling that large organizations 
are more exposed to HR risks than smaller ones. This belief has been based on the 
thought that people know each other better in small organizations and there are 
fewer individuals involved, so closer working relationships exist across the whole 
organization. It has been assumed that these closer working relationships mean
that the organization is less vulnerable to legal action or other disruption caused by 
personnel issues.
In recent times, however, it has become obvious that smaller organizations
are also exposed to significant HR risks. In response to this realization, most small 
organizations now produce a staff handbook that sets out the terms and conditions 
of employment, including arrangements for sickness absence, maternity leave and 
annual leave, appraisals, behaviour at work, and roles and responsibilities.
Organizations need to set down arrangements that will ensure full compliance 
with the relevant employment legislation, including diversity arrangements, to ensure 
that there is no discrimination on the basis of ethnic origins or physical ability. When 
building on these basic legal requirements, organizations should look at the oppor-
tunities that will arise from having supportive, clear and beneficial recruitment,
retention and employment practices.
Control of reputational risks
Brand protection
One of the most valuable assets of any organization is its brand name, and it is
important to avoid damage to the organization or any of its brands. Damage to 
brand can occur for a number of reasons, including:
●
●
changes in government policy;
●
●
changes in the marketplace;
●
●
new entrants into the marketplace;
●
●
price and specification competition;
●
●
counterfeiting and fake goods;
●
●
inappropriate franchisee behaviour;
●
●
failure of sponsor or joint-venture partner.
A trend in recent times has been the use of established brands to sell goods or
services that have no obvious link to the brand itself. For example, supermarkets 
now sell insurance and other financial products, as well as selling petrol from fore-
court garages. Extending or stretching the brand in this way represents a huge
opportunity for many organizations, but the brand extensions have to be appro-
priate and credible as well as successful.
Most organizations recognize the value of their brands and have procedures in 
place to identify opportunities for brand extension. However, ownership of the 
brand within many large organizations is sometimes not well defined. Successful

---