Risk, uncertainty, ignorance and myopia: Their managerial implications for B2B firms

Josef Oehmen, Giorgio Locatelli, Morten Wied, Pelle Lundquist Willumsen

Research output: Contribution to journalJournal articleResearchpeer-review

96 Downloads (Pure)

Abstract

Rare events are common: Even though any particular type of ‘rare event’ - a world war, global economic collapse, or pandemic for that matter - should only occur once every 100 years, there are enough of those types of ‘rare events’ that overall, they commonly occur about once every 10 years. As we are currently experiencing with the COVID-19 pandemic, we do not sufficiently leverage the rich toolset that risk management offers to prepare for and mitigate the resulting uncertainty. This article highlights four aspects of risk management, and their practical and theorical implications. They are: 1) Risk (in the narrower sense), where possible future outcomes can be captured through probability distributions. 2) A situation of uncertainty, where there is transparency regarding what is not known, but probability distributions are unknown, as well as causal relationships influencing the outcome in question. 3) A situation of ignorance, where there is no understanding that certain possible future developments are even relevant. And finally: 4) The emergence of organizational and inter-organizational myopia as an effect of risk, uncertainty and ignorance on collective human behaviour.
Original languageEnglish
JournalIndustrial Marketing Management
Volume88
Pages (from-to)330-338
ISSN0019-8501
DOIs
Publication statusPublished - 2020

Keywords

  • Risk management
  • Resilience
  • Myopia

Fingerprint Dive into the research topics of 'Risk, uncertainty, ignorance and myopia: Their managerial implications for B2B firms'. Together they form a unique fingerprint.

Cite this