Strategic Risk / Uncertainty: Difference between revisions
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!colspan="6"|Organizational Risk Factors | !colspan="6"|Organizational Risk Factors | ||
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|Complex/Simple Environments | |Complex/Simple Environments | ||
|The More Complex the More Risk | |The More Complex the More Risk | ||
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|colspan="6"|Managerial Risk Factors | |colspan="6"|Managerial Risk Factors | ||
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|Aspirations/Expectations | |Aspirations/Expectations | ||
|Higher expectations mean better performance is more likely and less risk | |Higher expectations mean better performance is more likely and less risk | ||
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*Organizational Risk is where orgs face volitile income streams associated with turbulent environments | *Organizational Risk is where orgs face volitile income streams associated with turbulent environments | ||
<comments /> | <comments /> | ||
[[Category:Strategy]] | [[Category:Strategy]] | ||
Revision as of 15:29, 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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