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Some perspectives on risk management: A security case study from the oil and gas industry

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  • Torbjørn Bjerga
  • Terje Aven

Abstract

This article provides some views on how managers should think about risk when facing challenging decision-making situations with large uncertainties and high values at stake. The article is based on the thesis that managers are well qualified for the proper understanding and management of such risk and uncertainties, but that there has been a lack of suitable conceptual frameworks available. We argue that the key to success in this respect is to be open to broader risk perspectives than the common damage probability view. Risk also has to reflect uncertainties, knowledge, and potential surprises. A security case taken from the oil and gas industry is used to illustrate the discussion. The main aim of the article is to guide managers and analysts on the conceptualization of risk and on which techniques and principles to adopt in order to understand, assess, manage, and communicate risk in relation to situations of large uncertainties and high values at stake.

Suggested Citation

  • Torbjørn Bjerga & Terje Aven, 2016. "Some perspectives on risk management: A security case study from the oil and gas industry," Journal of Risk and Reliability, , vol. 230(5), pages 512-520, October.
    • Handle: RePEc:sae:risrel:v:230:y:2016:i:5:p:512-520
    DOI: 10.1177/1748006X16654589
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    References listed on IDEAS

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    1. Ikujiro Nonaka, 1994. "A Dynamic Theory of Organizational Knowledge Creation," Organization Science, INFORMS, vol. 5(1), pages 14-37, February.
    2. Bjerga, Torbjørn & Aven, Terje, 2015. "Adaptive risk management using new risk perspectives – an example from the oil and gas industry," Reliability Engineering and System Safety, Elsevier, vol. 134(C), pages 75-82.
    3. Aven, Terje & Krohn, Bodil S., 2014. "A new perspective on how to understand, assess and manage risk and the unforeseen," Reliability Engineering and System Safety, Elsevier, vol. 121(C), pages 1-10.
    4. Sven Ove Hansson & Terje Aven, 2014. "Is Risk Analysis Scientific?," Risk Analysis, John Wiley & Sons, vol. 34(7), pages 1173-1183, July.
    5. Keeney, Ralph L., 1996. "Value-focused thinking: Identifying decision opportunities and creating alternatives," European Journal of Operational Research, Elsevier, vol. 92(3), pages 537-549, August.
    6. George E. Apostolakis, 2004. "How Useful Is Quantitative Risk Assessment?," Risk Analysis, John Wiley & Sons, vol. 24(3), pages 515-520, June.
    7. Stanley Kaplan & B. John Garrick, 1981. "On The Quantitative Definition of Risk," Risk Analysis, John Wiley & Sons, vol. 1(1), pages 11-27, March.
    8. Aven, Terje, 2013. "Practical implications of the new risk perspectives," Reliability Engineering and System Safety, Elsevier, vol. 115(C), pages 136-145.
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    Citations

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    Cited by:

    1. 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.
    2. Aven, Terje, 2019. "The cautionary principle in risk management: Foundation and practical use," Reliability Engineering and System Safety, Elsevier, vol. 191(C).
    3. Aven, Terje, 2017. "How some types of risk assessments can support resilience analysis and management," Reliability Engineering and System Safety, Elsevier, vol. 167(C), pages 536-543.
    4. Aven, Terje & Ylönen, Marja, 2019. "The strong power of standards in the safety and risk fields: A threat to proper developments of these fields?," Reliability Engineering and System Safety, Elsevier, vol. 189(C), pages 279-286.
    5. Zio, E., 2018. "The future of risk assessment," Reliability Engineering and System Safety, Elsevier, vol. 177(C), pages 176-190.
    6. Aven, Terje & Kristensen, Vidar, 2019. "How the distinction between general knowledge and specific knowledge can improve the foundation and practice of risk assessment and risk-informed decision-making," Reliability Engineering and System Safety, Elsevier, vol. 191(C).

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