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Risk Perception and Management in Integrated Operations

The benefits of integrated operations go far and beyond in the organizational context. The realm is associated with the development of new means of work organization, work management, more automation and closer collaborations among the departments in the organization (Brender & Markov, 2013). Despite these benefits, there are significant concerns about the impact of integrated operations in risk picture and its contribution to new challenges for risk management.

Organizations should develop a strong and reliable operational risks management framework that continuously assesses and identified risks. Common sources of risk in an organization include the actions of users, internal processes, systems as well as external events. With the increasing number of operational requirements for organizations, coupled with the complexity and increasing incidents of risks, integrated operations can offer a broad range of benefits through the integration of the activities of risk management and performance optimization (Burns & Slovic, 2012).

Integrated operations can offer stringent solutions for the effective management of risks in the operations of the organization by integrating fundamental technologies like workflow, analytics, and dashboards as well as reporting. These strategies and approaches should be integrated into the planning cycle of the organization and aligned with the strategic objectives of the organization to enhance the outcomes of the risk management approach.

Research shows that the recent increased use of ICT, automated, and sensor technologies in organizations has affected the use of new ICT, changed worked processes and in some instances resulted in operational relocations (Morgan, Orzen, Sefton & Sisak, 2015). An increasing number of organizations are familiar with the utilization of ICT to improve company processes and practices (Markiewicz, Muda, Kubińska&Augustynowicz, 2019). As more organizations continue to integrate their operations to ensure proper planning the perception of users on the management of risk continues to affect the success of integrating operations.

Problem Statement

Despite its focus on avoiding the risks that stem from human failure, the operational risk continues to hinder the complete efficiency of integrated operations in organizations. Current research by academicians and engineers does not consider the behavioral aspects of risks management with regard to its application in integrated operations. The current theories of risk management are based on ideas borrowed from discursive frameworks alongside emotional tensions that underlier operational risk.

Priberny & Dorfleitner (2013) argues that the human instincts about some aspect of integrated operations being wrong and that immediate action is required is a fundamental aspect of perception in operational risk. Risk perception results from the combination of belief and supposed proof. This means that users may anticipate certain risks which would be disregarded since they are influenced by emotional tensions.

Robinson & Hammitt (2015) assert that the tensions among users that results from imagination and interpretations are related to the belief among most users that automatism models should be used alongside the belief that risk can be avoided if humans were more alert and flexible.

Based on the view above the question is whether users prefer to apply thinking when dealing with operational risks or to depend on cognitive as well as behavioral risk as to the result of the complexities of risk management. To answer these questions a detailed review of the literature was carried out.

According to Wauters, van Winsen, de Mey&Lauwers (2014) the perceptions of risks among users depend on the choices made by agents as the result of the social perception in which they carry out their functions. Renn & Benighaus (2013) supports this view and adds that the emotions are connected to the perception of risk and risk management and suggested the understanding of this effect of emotions in the respective hierarchical systems.

Renn & Benighaus (2013) holds the view that restrictive stances coupled with constraint anticipation create the perception that risk management systems are sensitive to the discourse which makes them prefer the utilization of model risk. In severe operational scenarios when users develop the perception about the combination of alertness and flexibility, they tend to take the risk management more seriously and to be committed to the identification and mitigation of risks despite the complexity of operational systems. Burns & Slovic, (2012) suggests various conceptual frameworks that can be used to understanding the behavioral settings that affect the user’s perception of risks and risk management in organizations.

Literature Review

Operational Risks

Research shows that the standards for the management of operational risks have become a significant threat in the social contexts of organizations (Renn & Benighaus, 2013). This is more pronounced in the contemporary world where some conventional behavioral codes should be met. The standards have an effect on the emotional tensions that connect to the awareness of the risks of socializing and the risks encountered by employees as they attempt to fulfill their social roles in the organization.

The threats are observable as anxiety among all employees and the entire organization. The outcomes include behavioral alterations which may result in risks with severe implications (Priberny & Dorfleitner, 2013). These set of outcomes are referred to by economists as negative externalities that often result in complications among the internal and the external aspects of the organization. The risks should be identified and mitigated to avoid devastating consequences, especially in complex organizations. The actions of operational risks are sometimes created by powerful external factors including state authorities, and regulatory agencies.

The estimation of the chances of operational failure in an organization coupled with the accurate production of deviations from the objectives of the risk management strategies cannot be done based on individual subjectivity. Organizations need a logical plan to predict the effects and consequences of undesirable risks.

Risk Perception

According to Priberny & Dorfleitner (2013) when the employees perceive themselves as a problem to the organization and focus on the effects on the external and internal setting of the organization they begin to feel the risks of exposure to the company and the opinions of other employees. This continues gradually as the employees start to feel the risk of this exposure to the subjectivity of other users.

This means that the perception of risks among users is influenced by significant extents by the sensitivity to challenges, imagination, and normative standards. This shows that operational risks similar to other forms of risks would be nonexistence in the absence of risks perception. It also demonstrates that the perception of risk is largely an intersubjectivity matter and originated from the restructuration and the differences observed among social contexts. This can have severe consequences on the decision-making processes especially in the realm of operational risk management (Burns & Slovic, 2012). This shows that the perspective from which members of an organization understand risk has an altering effect on risk perception and the quality of the decision made to take the necessary action. This decision making is connected to the respective social as well as cultural dynamics in organizational settings.

Risk perceptions describe the phenomenon observed among users during the purchase process. The theory holds that the user cannot make accurate predictions about the effects of buying a certain product or service which increases their levels of uncertainty. The uncertainty stems from the product, brand as well as the service providers. Researchers observed that in the traditional context, up to 88% of the perceived risk was categorized by six fundamental dimensions which include financial, functional, time, physical, psychological and social risks.

According to Priberny & Dorfleitner, (2013) the perception of risks is affected by various factors and situations. The perception of risks among employees of an organization is different from the risk perception of the customers. Some of the dimensions that affect the perception of risks include economic factors that affect issue such as cash flow and profits, functional factors such as operations and sales, psychological, social and rime factors (Priberny & Dorfleitner, 2013). Employees and customers are likely to shape their perceptions of risks based on the financial performance of the organization, and other factors such as time and convenience alongside other factors such as the risks of privacy, fake risks, and reputational risks.

Economic perceptions of risks are connected to the operational perceptions and are considered as more substantial as well as complex. From the psychological perspective, the users have the perception that risk is influenced by significant extents by subjective assessments, decision making and the respective environment of the organization (Burns & Slovic, 2012). The various dimensions of risks demonstrate the complex nature of risks and how it is dependent on the specific context or environment it is applied.



Brender, N., & Markov, I. (2013). Risk perception and risk management in cloud computing: Results from a case study of Swiss companies. International Journal Of Information Management33(5), 726-733. doi: 10.1016/j.ijinfomgt.2013.05.004

Burns, W., &Slovic, P. (2012). Risk Perception and Behaviors: Anticipating and Responding to Crises. Risk Analysis32(4), 579-582. doi: 10.1111/j.1539-6924.2012.01791.x

Markiewicz, Ł., Muda, R., Kubińska, E., &Augustynowicz, P. (2019). An explanatory analysis of perceived risk decision weights (perceived-risk attitudes) and perceived benefit decision weights (perceived-benefit attitudes) in risk-value models. Journal Of Risk Research, 1-23. doi: 10.1080/13669877.2019.1628089

Morgan, J., Orzen, H., Sefton, M., & Sisak, D. (2015). Strategic and Natural Risk in Entrepreneurship: An Experimental Study. Journal Of Economics & Management Strategy25(2), 420-454. doi: 10.1111/jems.12140

Priberny, C., &Dorfleitner, G. (2013). Risk Perception and Foreign Exchange Risk Management in Microfinance. Journal Of Management And Sustainability3(2). doi: 10.5539/jms.v3n2p68

Renn, O., &Benighaus, C. (2013). Perception of technological risk: insights from research and lessons for risk communication and management. Journal Of Risk Research16(3-4), 293-313. doi: 10.1080/13669877.2012.729522

Robinson, L., &Hammitt, J. (2015). Introduction to the Special Series on Risk, Perception, and Response. Risk Analysis35(10), 1766-1769. doi: 10.1111/risa.12520

Wauters, E., van Winsen, F., de Mey, Y., &Lauwers, L. (2014). Risk perception, attitudes towards risk and risk management: evidence and implications. Agricultural Economics (ZemědělskáEkonomika)60(No. 9), 389-405. doi: 10.17221/176/2013-agricecon


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