Juri 635 DB 1

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635

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Feb 20, 2024

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Juri 635 DB 1 Define risk and discuss the difference between risk and uncertainty. Then, discuss how risk managers use basic risk concepts to identify and categorize risk. Risk can be a difficult word to define and can be hard to measure. There are various types of risks and risk can come from many different situations. Pritchard defines the concept of risk as “the cumulative effect of the probability of uncertain occurrences that may positively or negatively affect project objectives.” Carl Pritchard, Risk Management: Concepts and Guidance , 7 (5th ed. 2015). Some can argue that there is no single definition of risk because there are different types of risks that can originate from different situations. Traditionally risk has been defined in terms of uncertainty but there is a difference between the two. In risk, there is a probability of an event occurring but the outcome is unknown to the decision maker. With uncertainty, there is an unknown event and an unknown outcome so there is no available information to the decision maker. Kristel De Groot and Roy Thurik, Disentangling Risk and Uncertainty: When Risk-Taking Measures Are Not About Risk, Frontier Psychology (November 15, 2018). It is a risk managers responsibility to make sure that there are no unforeseen surprises that occur. As a risk manager, it is important to take the time to evaluate any risks, classify them appropriately, and properly categorizing them. Risk management perspectives should be viewed both in short and long term. Short term perspectives deal with the current project and immediate future while long term perspectives deal with anything beyond the short term. Pritchard, supra at 17. Risk managers should do a thorough evaluation of any potential risks and perform risk assessments at the beginning of projects and then on a daily basis. This will help to create awareness and set acceptable standards on projects. With proper risk management and a through risk assessment, risk managers can control workplace hazards and reduce incidents and accidents in the workplace. Patrick, I enjoyed reading your post on the subject. It was very informative and thorough in its assessment. I also agree with your explanation that the concepts of risk and uncertainty are distinctively different. The readings for this week explain that risks have an effect on the probabilities of objectives whereas with uncertainty the probability is completely unknown. Carl Pritchard, Risk Management: Concepts and Guidance , 7 (5th ed. 2015). As a risk manager, assessing and analyzing risks can make or break a project and an organization. Risk identification is a critical step to finding what risks may or may not be associated with a project or organization. Id. at 33. It is also important to remember that risk

events are not always a negative event. Some risk events can be a positive event and end up being a benefit. By utilizing proper evaluation of risks and classifications, the risk manager can work toward success. When discussing the biblical perspective on risk management, we can look to Proverbs which states, “ The prudent sees danger and hides himself, but the simple go on and suffer for it.” Proverbs 22:3 (English Standard). By analyzing, identifying and assessing any possible risks, we can attempt to be prepared and do not need to fear or run from them. Hi Anna, I enjoyed your post and thought it was very informative. I think your explanations of risk and uncertainty are exactly on point. I believe that sometimes there is a connotation that risk is associated with a negative event. It is important to remember that there can be positive outcomes associated with risk as well. This is shown in the reading material this week. Pritchard defines the concept of risk as “the cumulative effect of the probability of uncertain occurrences that may positively or negatively affect project objectives.” Carl Pritchard, Risk Management: Concepts and Guidance , 7 (5th ed. 2015). From a biblical perspective on risk management, we can look to the book of Ecclesiastes. Ecclesiastes states, “ He who observes the wind will not sow, and he who regards the clouds will not reap. As you do not know the way the spirit comes to the bones in the womb[ a ] of a woman with child, so you do not know the work of God who makes everything. In the morning sow your seed, and at evening withhold not your hand, for you do not know which will prosper, this or that, or whether both alike will be good. Ecclesiastes 11:4-6 (English Standard). This passage explains when making decisions, it is important to be consider different aspects and that certainty can not always be guaranteed.

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