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Risk Management

, Volume 3, Issue 2, pp 53–64 | Cite as

Organizational Complexity and Perceptions of Risk

  • Steve McKenna
Research Article

Abstract

This paper explores the idea that risk, rather than being a linear, objective and manageable concept, is actually created, re-created and constructed. The construction of risk takes place within the constant sense-making that occurs in organizational life. Risk is, therefore, a complex phenomenon, and one that cannot be fully subjected to objective and rational analysis. Indeed, because risk is created through the ways in which reality is constructed by members of the organization, such risks are not ‘real’ but rather based on assumptions and perceptions.

This paper, then, investigates the non-linearity and non-rationality of risk creation, and thus the difficulty of managing some risks in a linear and rational manner. The linearity of risk management techniques, as proposed in much of the literature, often creates a facade of order and control that do not exist in an essentially constructed and complex organizational world.

Keywords

Political negotiation social construction complexity decision-making 

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Copyright information

© Palgrave Macmillan 2001

Authors and Affiliations

  • Steve McKenna
    • 1
  1. 1.Chief Executive Officer, Singapore Institute of Commerce

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