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Risk estimation and decision making in management (in selected areas of science)

Author

Listed:
  • Tadeusz Galanc
  • Wiktor Kołwzan
  • Jerzy Pieronek
  • Agnieszka Skowronek-Grądziel

Abstract

Risk is a category that is inseparably connected with uncertainty and probability, which means that the nature of risk as a category of science is complex, and the concept of risk is very difficult to define by one conceptual system of modern science. Due to the above, the main research hypothesis of the work is oriented to the assumption that the complexity of the risk category is determined by the diversity (variety) of reality, as a result of which in science there is currently no uniform methodology for risk assessment and estimation. As a result, the main goal of the article is to describe the research area based on selected representative methods of risk estimation and logical decision-making schemes, as well as to systematise the knowledge about the methodology used in them. In the article, the authors illustrate risk estimation with examples developed by themselves and quoted from various fields of science, differing from one another in formal terms in quantitative and qualitative (numerical and content-verbally) dimensions. Strategic risk, risk of fraction estimation, Bayesian risk, Bayesian methods for estimation of population distribution parameters, risk of econometric model assessment, interest rate risk, banking risk, and adverse event as a measure of risk are here addressed. The article also focuses on the problem of risk estimation in terms of the theory of fractals. The work is to have not only cognitive but also practical meaning. The created source of knowledge should prove helpful for decision-makers in the area of management since effective process management requires the expertise of risk estimation in various dimensions and using various mathematical tools.

Suggested Citation

  • Tadeusz Galanc & Wiktor Kołwzan & Jerzy Pieronek & Agnieszka Skowronek-Grądziel, 2020. "Risk estimation and decision making in management (in selected areas of science)," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 30(1), pages 47-66.
    • Handle: RePEc:wut:journl:v:1:y:2020:p:47-66:id:1481
    DOI: 10.37190/ord200103
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    References listed on IDEAS

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    1. Barbara Gładysz & Dorota Kuchta, 2011. "A method of variable selection for fuzzy regression – the possibility approach," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 21(2), pages 5-15.
    2. Aven, Terje, 2016. "Risk assessment and risk management: Review of recent advances on their foundation," European Journal of Operational Research, Elsevier, vol. 253(1), pages 1-13.
    3. Tadeusz Galanc & Wiktor Kołwzan & Jerzy Pieronek & Agnieszka Skowronek-Grądziel, 2016. "Logic and risk as qualitative and quantitative dimensions of decision-making processes," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 26(3), pages 21-42.
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