Strategic Risk / Uncertainty: Difference between revisions

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Uncertainty is the limits and precision and the extent of knowledge about an event or subject
Uncertainty is the limits and precision and the extent of knowledge about an event or subject


Categories of Risk
{| class="wikitable"
Strategy.........Changing patterns of demand...............Exogenous
!colspan="6"|Categories of Risk
Operations......Mfg/process systems...........................Exogenous
|-
Economic........Changes in interest rates.....................Exogenous
|Strategy
Hazards..........Natural disaters..................................Exogenous
|Changing Patterns of Demand
|[[Economics Glossary#Endogenous/Exogenous|Exogenous]]
|-
|Operations
|Manufacturing/Process Systems
|Exogenous
|-
|Economics
|Changes in Interest Rates
|Exogenous
|-
|Hazards
|Natural Disasters
|Exogenous
|}
 
 


E.g. Bhopal was an eg of man made risk of not adopting to new technologies (Endogenous)
E.g. Bhopal was an eg of man made risk of not adopting to new technologies (Endogenous)


Organizational and Manergerial Risk
{| class="wikitable"
MR is where managers make choices associated with uncertain outcomes
!colspan="6"|Organizational/Managerial Risk
OR is where orgs face volitile income streams associated with turbulent environments
|-
!colspan="6"|Organizational Risk Factors
|-
|Complex/Simple Environments
|The More Complex the More Risk
|-
|Scarcity/[[Economics Glossary#Munificience|Munificence]]
|Abundance provides a context where greater risk can be taken
|-
!colspan="6"|Managerial Risk  Factors
|-
|Aspirations/Expectations
|Higher expectations mean better performance is more likely and less risk
|-
|Economics
|Changes in Interest Rates
|-
|Top-Team Characteristics
|Higher levels of heterogenity is likely to promote risk
|-
|Ownership
|Managers who do not have equity stake are less likely to take risks
|}
 


Org Risk factors
*Managerial Risk is where managers make choices associated with uncertain outcomes
Complex/Simple Environments............................The more complex the more risk
*Organizational Risk is where orgs face volitile income streams associated with turbulent environments
Scarcity/Munificence...........................................Abundance provides a context where greater risk can be taken


Managerial Risk factors
Aspirations/Expectations.....................................Higher expectations mean better performance is more likely and less risk
Top-Team Characteristics...................................Higher levels of heterogenity is likely to promote risk
Ownership.........................................................Managers who do not have equity stake are less likely to take risks


<comments />
[[Category:Strategy]]
[[Category:Strategy]]

Latest revision as of 15:30, 18 October 2012

Risk is defined as the assessment of the severity, amount and nature of losses which an action may incur

Uncertainty is the limits and precision and the extent of knowledge about an event or subject

Categories of Risk
Strategy Changing Patterns of Demand Exogenous
Operations Manufacturing/Process Systems Exogenous
Economics Changes in Interest Rates Exogenous
Hazards Natural Disasters Exogenous


E.g. Bhopal was an eg of man made risk of not adopting to new technologies (Endogenous)

Organizational/Managerial Risk
Organizational Risk Factors
Complex/Simple Environments The More Complex the More Risk
Scarcity/Munificence Abundance provides a context where greater risk can be taken
Managerial Risk Factors
Aspirations/Expectations Higher expectations mean better performance is more likely and less risk
Economics Changes in Interest Rates
Top-Team Characteristics Higher levels of heterogenity is likely to promote risk
Ownership Managers who do not have equity stake are less likely to take risks


  • Managerial Risk is where managers make choices associated with uncertain outcomes
  • Organizational Risk is where orgs face volitile income streams associated with turbulent environments


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