Oklahoma State University – Oklahoma City
Critical Thinking
Lecture Notes Eight
PHIL 1313
Fall 2022
Contents: Risk Management Principles and Strategies.
Lecture Notes Eight
Traditional risk assessments are based on causal chains and event analysis, failure
reporting and risk assessments, calculating historical data-based probabilities.
This approach has strong limitations in analyzing complex systems as they treat
the system as being composed of components with linear interactions, using
methods like fault trees and event trees, and have mainly a historical failure data
perspective. These problems are addressed in resilience engineering, which
argues for more appropriate models and methods for such systems; see e.g.
Hollnagel et al. (2006). Alternative methods have been developed, of which FRAM
and STAMP are among the most well-known (Hollnagel, 2004, Leveson, 2004,
2011). At first glance, resilience engineering seems to be in conflict with risk
management as it rejects the traditional risk assessments, but there is no need for
such a conflict. With sufficiently broad risk management frameworks, the
resilience dimension is a part of risk management as was highlighted at the
beginning of this section, and discussed for example by Steen and Aven (2011)
and Aven (2015b). The latter reference relates to the antifragility concept of Taleb
(2012), which builds on and extends the resilience concept. The key message of
Taleb is that to obtain top performance over time one has to acknowledge and
even “love” some level of variation, uncertainty and risk. Taleb (2012, pp. 4–5)
proposes “to stand current approaches to prediction, prognostication, and risk
management on their heads”. However, as discussed above, there is no conflict
here if risk and risk management are sufficiently framed and conceptualized.
Proper risk management needs to incorporate these ways of thought, which
relate risk to performance and improvement processes over time.
