Management System and Organizational Risks in Public Entities

In its historical dimension, risk is a fresh concept and at the same time one of the few business terms with direct origin in the commercial and financial environment and not derived from the military, psychological or scientific vocabulary. While in the 1970s "risk" was a notion associated with natural sciences, and less with the financial and insurance theories, in recent years, the concept of risk has gained importance among decision-makers in the business world. In this context, American economists Harry M. Markovitz and James Tobin, winners of the Nobel Prize, played the role of pioneers. Their works focused on the concepts of efficient portfolios (the portfolio that provides the highest profit for a given level of risk, or the equivalent of the lowest level of risk for an expected return). However, the more sophisticated the methods of scientific risk assessment become, the more attention gives the society to conflicts of risk acceptance and evaluation technologies. The concept of risk gained general connotations that enabled it to extend to diverse areas within modern society structures.