Understanding and Managing Risk Attitude

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Gower Publishing, Ltd., Jan 1, 2007 - Business & Economics - 180 pages
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David Hillson's and Ruth Murray-Webster's Understanding and Managing Risk Attitude will help you understand the human aspects of risk management and to manage proactively the influence of human behaviour on the risk process. The authors introduce a range of models, perspectives and examples to define and detail the range of possible risk attitudes; looking both at individuals and groups. Using leading-edge thinking on self-awareness and emotional literacy they develop a powerful approach to address the most common shortfall in current risk management: the failure to manage the human aspects of the process.
  

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Must read in project risk management In recent years bookshelves (and readers) have groaned under the weight of multiple books on project risk management. It is no easy task to write a book, which is both better than its predecessors and genuinely novel. In both tasks David Hillson and Ruth Murray-Webster has succeeded admirably: this book deserves to become the leader in its field. I have read many books on psychology and project management. In most cases, they are hard to read: it is difficult to grasp essentials where you overwhelmed with new terminology and research methods. David Hillson and Ruth Murray-Webster have a clear understanding of their principal audience - practicing project managers and write accordingly. Their book avoids overly complex theoretical discussions: the author always has an eye on what a project manager really needs to know. The authors initially discuss risks and risk attitudes. Essentially risk attitude is a psychological phenomenon. Then the author focuses on two main aspects related to risk attitude. First, how people use psychological heuristics or mental shortcuts when they make choices or assess risks, then the authors discuss the emotional aspects of risk attitude. Understanding and Managing Risk Attitudes is the first book that I have encountered that has detailed discussion on emotional literacy for individuals and groups. The discussion about group risk attitudes, particularly groupthink, is especially valuable: we often do not realize that group risk attitudes can be quite different from that of individuals. Those with project risk management experience are likely to find a good deal of new and worthwhile information in this book. If you are new to project risk management or just looking to refresh your knowledge of the latest thinking in this field, you should definitely read this book.  

Contents

Risk Management Status Quo Efficient but not Effective?
3
What is risk?
4
What is attitude?
6
Risk management in todays business
9
Is risk management effective?
11
Purpose and structure of this book
13
The Importance of Human Factors in Risk Management
15
Why human factors matter to risk management
17
UNDERSTANDING EMOTIONAL LITERACY
83
Emotion Definition and Relevance
85
The history of emotional intelligence
86
From emotional intelligence to emotional literacy
91
Emotional literacy and risk management
93
Conclusion
97
Emotional Literacy for Individuals
99
Open loop system
102

Risk management and the group
26
Diagnosis is not the same as treatment
34
UNDERSTANDING RISK ATTITUDES
37
General Principles of Risk Attitudes
39
Basic risk attitudes
43
Situational influences on preferred risk attitude
46
Internal influences on preferred risk attitude
48
Conclusion and summary
49
Individual Risk Attitudes and Heuristics
51
The availability heuristic
53
The representativeness heuristic
55
The anchoring and adjustment heuristic
57
The confirmation trap
60
Understanding individual heuristics
62
Group Risk Attitudes and Heuristics
65
Understanding group risk culture
66
The groupthink heuristic
68
The Moses Factor
69
The cultural conformity heuristic
71
The risky shift and cautious shift heuristics
73
The influence of national culture
75
Modifying group risk culture
81
A mindset of choice
104
Component parts of individual emotional literacy
105
Stages of individual emotional development
121
Emotional Literacy for Groups
125
Component parts of group emotional literacy
126
The role of leadership
132
Going forward
137
IMPLEMENTATION ISSUES
139
Applying Emotional Literacy to Risk Attitudes
141
Emotionally literate management of risk attitudes
144
Making the change
146
Final Thoughts and the Way Ahead
149
Difficulties in understanding risk attitude
151
Difficulties in managing risk attitude
153
Too hard?
154
Future developments
155
Conclusion
157
Emotional IntelligenceLiteracy Tools
159
Bibliography and Further Reading
165
Index
177
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