Risk, Uncertainty and Complexity
Monday, 4 October, 2010 6 Comments
My colleague, Bala Desphande, from Ontonix USA, provides some further insight on subjects that are, undoudtedly, “closely related”. Ontonix has developed a unique methodology for measuring the uncertainty within a relationship (between two parameters).
There are apparently as many different definitions of risk as there are practicing groups. But most definitions involve computing some form of probability of an event. Doug Hubbard in his book “Failure of Risk Management” makes a very convincing argument for standardizing the definition by invoking the difference between Risk and Uncertainty.
Uncertainty arises due to the fact that there may be multiple possibilities (or outcomes) for an event. Each of these possibilities can be associated with a probability. However, Risk arises only when some (or all) of these possibilities are associated with loss of value(s).
read the full post: Risk, Uncertainty and Complexity.