Economic analysis model for high reliability organizations

High Reliability Organizations (HROs) performing highly hazardous operations must incorporate highly effective safety barriers and controls to prevent accidents that can injure or kill people, destroy property and equipment, damage the environment, reduce confidence in the organization’s ability to safely perform those operations, or expose the company to economic injury or failure. Serious accidents can be lethal to a company; it can fail due to loss of profitability or the weight of litigation. Safely performing highly hazardous operations leads to reliability of the operations. Thus, safety and reliability must be two of the primary goals and attributes of a HRO. Achieving these goals of safety and reliability requires strategic investment in safety barriers and controls to prevent accidents. The strategic objective of this research hinges on the development of an economic analysis model of the costs of barriers and controls versus the costs of accidents that could happen without them. The proposed model should help decision makers determine the optimum barriers and controls in which to invest based on life cycle cost analysis of those barriers and controls and the accidents they should prevent.