Perceptions of Risk

May 31, 2007 0 comments

The hazards, associated with product design and development, are many and complex. Some entrepreneurs tend to see risk as just another hurdle that must be coped with, extreme tendencies view risk as the gambling stake to be borne, while others see only researched probabilities to aid decision making. The measurement of risk before the event is the source of much debate, mainly because the majority of risks are perceived and not necessarily actual. When assessing risks, designers should accept this in mind to avoid over dependence on numerically based data; as there is a chance of promoting or validating misconceptions.

Sorting processes need to be employed to develop perspective and avoid over dependence on microscopic analysis. In short, there is a need to first be effective before developing efficiency, in that way the right direction can be discovered before committing valuable resources.

Missed and misconstrued perceptions of the consequences of decisions are of themselves a major, arguably the greatest, source of risk in decision making and any responsible decision maker will make every effort to obtain a complete and accurate perception of the risks faced before attempting to undertake an analysis and assessment'. (Ansell, 1992)

Thus, the purpose of risk analysis is the identification of all possible outcomes of decisions, whilst the estimation of probabilities and the size of the outcomes is the subject of risk assessment.

Posted by Lisa
Categories: Business Entrepreneurship Product Innovation


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