Risk and uncertainty in strategic decision making
AbstractImportance of risk and uncertainty in present period of dynamic changes grows. The article deals with risk and uncertainty in strategic decision making. First the concepts of risk and uncertainty and possibilities of their measurement are discussed. Further shortcomings of strategic decision making from the point of view risk integration are described. The emphasis is on discussion of decision making methods under risk and uncertainty (including decision tables, scenarios, Monte Carlo simulation, real options, decision trees, multicriteria utility function under risk, theory of games and methods of portfolio development) as supporting tools for strategic decision making. In the last part of the article some recommendations for integration of risk and uncertainty in strategic decision making based on scenario approach are suggested.
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Bibliographic InfoArticle provided by University of Economics, Prague in its journal Politická ekonomie.
Volume (Year): 2006 (2006)
Issue (Month): 1 ()
Postal: Redakce Politické ekonomie, Vysoká škola ekonomická, nám. W. Churchilla 4, 130 67 Praha 3
Find related papers by JEL classification:
- C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
- L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
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