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Evaluating Enterprise Risk in a Complex Environment

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DOI: 10.4236/jssm.2010.33041    5,241 Downloads   9,459 Views   Citations

ABSTRACT

This paper examines the relationship between operational risk management and knowledge learning process, with an emphasis on establishing the importance of statistical and mathematical approach on organizational capability to forecast, mitigate and control uncertain and vulnerable situations. Knowledge accumulation reduces critical situations unpredictability and improves organizational capability to face uncertain and potentially harmful events. We retain mathematical and statistical knowledge is organizational key factor in risk measuring and management process. Statistical creativity contributes to make quicker the innovation process of organization improves exploration capacity to forecast critical events and increases problem solving capacity, adaptation ability and learning process of organization. We show some important features of statistical approach. First, it makes clear strategic importance of risk culture within every level of organization; quantitative analysis support the emergence of latent troubles and make evident vulnerability of organization. Second, innovative tools allow to improve risk management and organizational capability to measure total risk exposition and to define a more adequate forecasting and corrective strategy. Finally, it’s not so easy to distinguish between measurable risk and unmeasurable uncertainty, it depends on quantity and quality of available knowledge. Difficulty predictable extreme events can bring out crisis and vulnerable situations. Every innovative approach which increases knowledge accumulation and improves forecasting process should be considered.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

I. Noni, L. Orsi and L. Pilotti, "Evaluating Enterprise Risk in a Complex Environment," Journal of Service Science and Management, Vol. 3 No. 3, 2010, pp. 352-362. doi: 10.4236/jssm.2010.33041.

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