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A methodology to evaluate risk for supporting decisions involving alignment with organizational values

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  • Thekdi, Shital A.
  • Aven, Terje

Abstract

There is an increasing need for organizations to evaluate aspects that are not easily quantified, such as alignment with organizational values, within their strategic planning decisions. These aspects are often insufficiently understood and are rapidly changing, with potential to cause severe negative consequences. Because there is no accepted methodology for characterizing these aspects, this type of risk is often neglected or given inadequate attention. This paper develops a methodology to evaluate risk and uncertainty related to alignment with organizational values. The methodology builds on risk perspectives involving uncertainties and knowledge rather than probability estimates. We illustrate the methodology on an application within the energy sector. This paper is relevant for both public and private sector organizations who face the dilemma of “what you cannot measure you cannot manage†, implying a struggle to include low-data and low-knowledge aspects into risk-based decisions.

Suggested Citation

  • Thekdi, Shital A. & Aven, Terje, 2018. "A methodology to evaluate risk for supporting decisions involving alignment with organizational values," Reliability Engineering and System Safety, Elsevier, vol. 172(C), pages 84-93.
    • Handle: RePEc:eee:reensy:v:172:y:2018:i:c:p:84-93
    DOI: 10.1016/j.ress.2017.12.001
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    References listed on IDEAS

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    1. Terje Aven, 2017. "The flaws of the ISO 31000 conceptualisation of risk," Journal of Risk and Reliability, , vol. 231(5), pages 467-468, October.
    2. Thekdi, Shital A. & Lambert, James H., 2015. "Integrated risk management of safety and development on transportation corridors," Reliability Engineering and System Safety, Elsevier, vol. 138(C), pages 1-12.
    3. Aven, T., 2011. "Interpretations of alternative uncertainty representations in a reliability and risk analysis context," Reliability Engineering and System Safety, Elsevier, vol. 96(3), pages 353-360.
    4. Aven, Terje, 2015. "Implications of black swans to the foundations and practice of risk assessment and management," Reliability Engineering and System Safety, Elsevier, vol. 134(C), pages 83-91.
    5. Aven, Terje, 2017. "Improving risk characterisations in practical situations by highlighting knowledge aspects, with applications to risk matrices," Reliability Engineering and System Safety, Elsevier, vol. 167(C), pages 42-48.
    6. Aven, Terje & Guikema, Seth, 2011. "Whose uncertainty assessments (probability distributions) does a risk assessment report: the analysts' or the experts'?," Reliability Engineering and System Safety, Elsevier, vol. 96(10), pages 1257-1262.
    7. Jason R. W. Merrick & John R. Harrald, 2007. "Making Decisions About Safety in US Ports and Waterways," Interfaces, INFORMS, vol. 37(3), pages 240-252, June.
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