Risk Management & Human Centered Work Space Design Department

Background
Electric Vans Ltd. has a moderate risk profile and is one of the top 100 Van companies based on a regular risk assessment from an external audit of the vehicle manufacturing sector in the automotive industry. Country and industry risk pillars strengthened the overall risk score of the company in the last 5 years. An established market position would be a strength for the company, but low profitability and a high proportion of debt could be causes of concern among other risks.
About the company
Headquartered in Shanghai, China, Electric Vans designs, develops, manufactures, sells, and leases fully electric vans and energy generation and storage systems. The company produces and sells the Models UI, UX, UV, vehicles. The company also installs and maintains energy systems, including generation, storage, and consumption.
Electric Vans Ltd. is one of the newcomer brands in the automotive industry, with reported revenue of $5.82 billion in the financial year 2021 (FY2021), which increased 20.67% over that in FY2020. Net income also increased 100.58% in FY2021 over that in FY2020.
By 2020, Electric Vans had more than 3 manufacturing plants located in China The business now included both small and large household appli- ances. Almost all of its growth came from acquisitions that were paid for out of cash flow and borrowing from the financial markets.
Electric Vans Ltd. strategic plan called for global expansion beginning in 2020. With this in mind and with large financial reserves, Electric Vans planned on acquiring 3 providers for battery production a year. Almost all of the acquisitions were manufacturing companies that produced products related to the electric supply units in the marketplace. However, some of the acquisitions included rubber wheels and light weight alloy rims companies as well as car security systems.
From 2010, when Electric Vans Ltd. began its rapid acquisition approach, it established a Risk Management Department. The Risk Management Department reported to the chief financial officer (CFO) and was considered to be part of the financial discipline of the company. The general objective of the Risk
Management Department was to coordinate the protection of the company’s assets. The primary means by which this was done was through the implementation of loss prevention programs. The department worked very closely with other internal departments such as Factory Risks and Health Hazards & Safety Department. Outside consultants were brought in as necessary to support these activities.
One method employed by the enterprise to ensure the entire organization and involvement in the risk management process was to hold each manufacturing division responsible for any specific losses up to a designated self-insured retention level. If there was a significant loss, the department must absorb the loss and its impact on the department’s bottom-line profit margin. This directly involved the division in both loss prevention and claims management. When a claim did occur, the Risk Management Department maintained regular contact with the department’s personnel to establish protocol on the claim and cash reserves and ultimate disposition.
As part of risk management, the enterprise purchased premium insurance above the designated retention levels. The insurance were allocated to each division. The premiums were calculated based on sales volume and claims loss history, with the most significant percentage being allocated against claims loss history.
Risk management was considered an integral part of the due diligence process for acquisitions and disinvestments. It began at the onset of the process rather than at the end and resulted in a written report and presentation to the senior levels of management.
A new risk shows up on the surface
The original intent of the Risk Management Department was to protect the enterprise’s assets, especially from claims and lawsuits. The department focused heavily on financial and business risks with often little regard for human assets. All of this was about to change.
Electric Vans Ltd. relied heavily on labor-intensive assembly line processes, despite attempts to modernize the factory with new equipment to speed up production. Unfortunately, the manual work intensive nature of the processes led to an increase in workplace injuries and sick days, resulting in rising workers' compensation costs and healthcare premiums that negatively impacted the company's financial statements. To address this issue, senior management tasked the Risk Management Department with finding ways to reduce injuries, sick days, and workers' compensation costs. The department had to examine how workers performed their tasks and improve the interaction between them to achieve the goals.
The risk department was renamed to “Risk Management & Human Centered Work Space Design Department”
Human Centered Work space design is the scientific study of designing the workplace environment to suit the user, with the aim of optimizing both human wellbeing and overall system performance. It is concerned with ensuring that tasks, equipment, information, and the environment are compatible with the user's capabilities and limitations. Human Centered and Work space design consider factors such as the job being done, demands on the user, size and shape of equipment, and how information is presented and accessed. Human Centered Work space design draws on various disciplines, including biomechanics, industrial design, kinesiology, psychology, and physiology. The focus of Human Centered and Work space design is primarily on the safety and well-being of employees, with the goal of reducing costs by improving safety and decreasing workers' compensation expenses.
Through Human Centered Work space design, workplaces can be designed, so that workers do not have to overextend themselves and the manufacturing industry could save billions in workers’ compensation.
Workplaces may either take the reactive or proactive approach when applying Human Centered Work space design practices. Reactive Human Centered Work space design is when something needs to be fixed and corrective action is taken. Proactive Human Centered Work space design is the process of seeking areas that could be improved and fixing the issues before they become a large problem. Problems may be fixed through equipment design, task design, or environmental design. Equipment design changes the actual, physical devices used by people. Task design changes what people do with the equipment. Environmental design changes the environment in which people work but not the physical equipment they use.
Questions:

1. Define clearly how is risk management understood in this article?
2. Clarify shortly how you understand the term Risk Management? Does the ISO norm fit to risk management in this article?
3. What are the general questions one has to ask oneself when looking into the definition of the intangible meaning of risk management”
4. The original intent of creating the Risk Management Department for Electric Vans Ltd. was to protect corporate assets. In other words, was this really risk management?
5. Critically discuss if the new responsibilities of the department, specifically Human Centered and Work Space Design, a valid interpretation of risk management?
6. Can the lowering of health care costs and workers’ compensation costs be considered as a project?
7. How successful do you think Electric Vans Ltd. was in lowering costs?
8. What kind of process needs to be implemented for a successful risk management of any kind.
9. Apart from country and industry risks that Electric Vans Ltd. can face, what are 4 other possible risks that should not be forgotten?