6 Operational Risk

Map6Session Synopsis

This session focsuses on the management of quality through the proceduralisation of operations, as most notably seen in ISO9001. Quality failures are seen as only one way in which operations can “fail”, so the application of management systems has broadened out to include other areas of operational risk, including safety, the environment and data security. The danger that the proceduralisation of the management of operations failures may make managers feel less responsible for failures will be considered.

Session Objectives

  • be aware of three definitions of “quality”, but note that in most management texts it is related to meeting customer needs;
  • be able to summarise the history of quality management techniques;
  • be able to relate conflict between proceduralisation and empowerment in an organisation’s quality policy.

Text Book

BS1 Vol. 1, pp 581-620.

Key Terms

  • Statistical Process Control;
  • Quality Assurance;
  • ISO9001


Michael Power (2005) The invention of operational risk, Review of International Political Economy, Vol. 12, Iss. 4, 2005.

Online Resources

Management Systems Audited by British Standards Insitute: note that they are selling the certification to these standards.