In May/June of 2014 I completed my MSc with the University of Sunderland on the topic of Environmental Management and Assessment: Health and Safety. One of the areas covered in this study was risk management; something I have already started discussing on this blog and another blog. The other blog belonging to Shaun Sayers of Capable People; an enjoyable blog to read as well of which can be found here.
Ok, where am I going with this, well as part of this study was the chance to create a thesis and cover risk management even more; especially in light of this becoming a topic of interest. My brain got whizzing around. My mind thinking about what to do. What could be vital to Risk Management? What will help me shape the management of risk in my organisation? What will give me a complete and better understanding? Hey Presto! Simply put it was on understanding on how people see risk.
Have you watched the home video clip shows? The likes of You’ve Been Framed? You can see no doubt clear as day people do silly things, take risks that you and I maybe would not; you of course maybe sat smiling thinking that you would or have. This led me to look into the topic of risk perception and tolerance to try and find what makes people tick.
I was fascinated at my findings and I plan to discuss risk perception and tolerance as I continue to study this in my own time as a personal quest and thirst for learning to share on this blog, hoping that it is of interest to someone. So I will look to post and discuss my ongoing research as I progress, with a snippit below.
So what are the definitions that I would use for Risk Perception and Tolerance? Rosa (2003) defines risk as a situation of “an event where something of human value (including humans themselves) is at stake and where the outcome is uncertain”. Sjoberg et al. (2004) gives the opinion that risk perception is the subjective assessment of the probability of a specified type of accident happening and how concerned we are with the consequences. I think these two fit well together but perhaps would lean more with Sjoberg.
The specific definition of risk tolerance is unlike perception in that the literature tends to not be too opinionated on the specifics and is much in agreement; although the literature is heavily focused on the financial markets as an industry the definition is applicable to all scenarios. Fox (2012) reflects on risk tolerance being the amount of uncertainty that is willing to be accepted in a particular risk category. This definition although not exactly word for word in the literature available is supported by the views of Lehmann et al. (2009).
So the big question is what can affect risk perception and risk tolerance? What do you think? We will look at this throughout the following posts and blogs over the next few weeks and months.
References
Fox, C. (2012) ‘Creating value with risk appetite and risk tolerance statements’, Financial Executive, November 2012, pp. 93-95.
Lehmann, C.C., Haight, J.M. and Michael, J.H. (2009) ‘Effects of Safety Training on Risk Tolerance: An Examination of Male Workers in the Surface Mining Industry’, Journal of SH&E Research, 4(3).
Rosa, E.A. (2003) The logical structure of the social amplification of risk framework (SARF). London: Cambridge University Press.
Sjoberg, L., Moen, B. and Rundmo, T (2004) Explaining risk perception: An evaluation of the psychometric paradigm in risk perception research. Trondheim, Norway: Rotunde.
HSE & Risk Management - My Thoughts 