Risk-Taking Behavior and Risk Management Risk Management

Risk-Taking Behavior and Risk Management

Risk Management Article Review

Dominic Cooper (2003) reviews the various factors that influence risk outcomes, with a focus on how personality can have a significant effect on risk-taking behavior. The first half of the article dives into the admittedly murky waters of the associations between personality types, group dynamics, and risk-taking behavior, while the second half discusses risk management and control strategies. Importantly, Cooper states explicitly that individual and group factors are hard to control or change. Despite this attitude, he puts considerable effort into describing the different personality types, their propensity for risk-taking behavior, and the likelihood of harm. In the final analysis, personality, task experience, promise of a reward, and group dynamics seem to have the greatest influence on risk-taking behavior. If the first half of the article were to have a summary, it would be that the sources of risk amenable to controls, people can be controlled the least.

In the second half of the paper, Cooper (2003) outlines well-accepted risk management strategies. These include establishing a hierarchy of risk policies, risk identification, risk assessment, risk evaluation, implementing risk controls, and iterative reviews and reevaluations of risk once controls have been implemented. Cooper (2003) also emphasizes the importance of generating a risk management paper trail and scheduled risk reevaluations.

Critique

Unfortunately, Cooper (2003) fails to integrate the first half of the paper with the second half. At the very beginning of the article, Cooper (2003, p. 39) states that the link between personality and risk has not been well studied. Later in the article he states that of all the factors contributing to risk, individual and group factors are the least controllable. In other words, one half of the article is spent describing factors contributing to risk that are least amenable to risk control measures.

Cooper (2003) does mention a few strategies that could minimize the influence of individual personality traits and group dynamics on risk-taking behavior, such as placing new hires with groups having strong safety records and leadership, but Cooper essentially leaves the topic of psychology and its influence on risk-taking behavior behind as he begins to discuss risk management strategies.

Cooper (2003) also frequently uses the word 'subjective', in terms of the influence of personality and risk management. While much of risk management may still require a substantial dose of common sense and expertise, there is a growing movement to inject evidence-based risk control measures into an organization's risk management strategies (e.g., Baker, Gottschalk, and Bianco, 2007). In addition, despite Cooper's use of the word 'subjective' repeatedly, he cites empirical studies throughout his review to support the points he is trying to make. This writing style, whether it reflects Cooper's actual attitude or not, was confusing.