The Domino Theory, originally developed in the context of workplace safety by Heinrich in the 1930s, suggests that accidents occur due to a chain of sequential events. In risk management, this theory emphasizes the idea that risks and incidents are interconnected, and addressing one risk can prevent a cascade of failures.
The theory is often represented as a series of dominos standing in a line. Each domino represents a potential risk or failure point. When one domino falls (an initial failure or hazard), it can trigger a chain reaction, causing others to fall and leading to a significant incident. The primary goal in risk management is to identify these “dominoes” and intervene early, either by removing a specific risk or by putting controls in place to stop the chain reaction.
For example, in a financial institution, an unchecked cybersecurity risk could lead to a data breach. This breach might compromise customer trust, resulting in reputational damage and regulatory penalties. By identifying and addressing the initial cyber risk (e.g., through robust IT security measures), the organization can prevent the subsequent dominos from falling.
The Domino Theory underlines the importance of a proactive approach. Risk managers focus on breaking the chain by addressing root causes and implementing preventive measures, ensuring that small issues do not escalate into larger, more complex problems.
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