The Risk in Systems Management

The Risk in Systems Management

Ioan Constantin Dima (University Valahia of Târgovişte, Romania)
DOI: 10.4018/978-1-4666-6481-4.ch002
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Abstract

Due to the constantly changing environment where any system performs its activity, smooth operation involves assuming a particular risk from the managing system. Thus, a true theory of risk has developed. Along with the theoretical approach of risk, there is also a pragmatic handling of it, meaning the actual way in which it manifests in practice. Highlighting several opinions of specialists, this chapter analyses the theory of risk in general and the risk in systems management in particular. Concurrently with the development of the theory of risk, a theory of attitude has also developed, manifested to risk by the systems managers. This chapter gives special attention to managers' attitudes towards risk and towards the industrial risk.
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Theory Of Risk

The place and role of risk in managerial activity must be analysed by taking into account the relation where the two concepts about risk are, namely: The concept suggested by the decision theory and concept suggested by the managers of companies. It is necessary to take into account managers’ behaviour before the risk defined by the theory of choice, which leads to the following conclusion: managers actually assume risks and express preferences in terms of risk, using techniques and procedures – other than the traditional ones – such as media, variation of probabilistic distributions of possible outcomes, etc.

Such an understanding of the concept of “risk” by managers leads to a certain attitude they have towards the risk, characterised by three essential features, namely: managers’ low sensitivity to probabilistic assessments of the possible results; managers’ deliberate mobilisation on some key objectives and decisive influence of this mobilisation on the managerial decisions; the clear distinction between assuming the risk by managers and game of hazard.

These features combined with the individual and organisational decisions highlight the impossibility of classical conception of the “risk” to allow a thorough and pertinent analysis of the behavioural phenomenon of assuming the risk.

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