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Although risk is an essential element of the business landscape and one of the more widely researched topics in business, there is noticeably less scholarship on strategic risk. Business risk literature tends to only delineate characteristics of risk that are operational rather than strategic in nature. The current operational risk paradigm focuses primarily on only two dimensions of risk: the probability of its occurrence and the severity of its outcomes. In contrast, literature in the natural and social sciences exhibits greater dimensionality in the risk lexicon, including temporal risk dimensions absent from academic business discussions. Additionally, descriptions of operational risk included minimal linkage to strategic outcomes that could constrain or enable resources, markets, or competition. When working with a multidimensional model of risk, one can adjust the process of environmental scanning and risk assessment in ways that were potentially more measurable. Given the temporal dimensions of risk, risk management cannot always function proactively. In risk environments with short risk horizons, rapid risk acceleration, or limited risk reaction time, firms must utilize dynamic capabilities. The literature proposes multiple approaches to managing risk that are often focused on single challenges or solutions. By combining a strategic management focus with a multidimensional model of strategic risk, one can match risk management protocols to specific strategic challenges. Lastly, one of more powerful dimensions of risky events is their ability to differentially affect competitors, changing the basis of competition. Risk need not solely be viewed as defending against potential losses; many risky occurrences may represent new strategic opportunities.

Client violence and workplace safety are relevant issues for all social workers across practice settings. This entry addresses why and how social workers may be targets for a client's violent behavior, and what we know about who is at risk of encountering violence. Understanding violence from a biopsychosocial perspective, identifying risk markers associated with violent behavior, and an introduction to guidelines for conducting a risk assessment will be discussed. The entry concludes by identifying and describing some general strategies for the prevention of client violence.

Risk is a social construction, and its understanding by information consumers is shaped through interaction with messages, opinions, shared and learned experiences, and interpretations of the characteristics of risk. Social actors and information flows can provide heuristic cues about risks, their relative importance and unimportance, and the attention that an information consumer ought to pay to a particular risk. Social cues can also accentuate particular characteristics of risk, further amplifying or attenuating attention to it and shaping behaviors. This, in turn, can generate secondary and tertiary effects resultant from the public’s reaction to risk. The process of social amplification of risk, therefore, has structural components that include the social elements that get enacted in the process of the translation of risk information. Risk amplification is also affected by message factors, which can dramatize information, increase attention and uncertainty, and generate shared signals and symbols. And finally, social amplification of risks results in reactions that can shape pathways for risk assessment and management, frame views, fuel intergroup dynamics in response to risk, contribute to the accumulation of experiential knowledge and signals of different risk situations, and label and stigmatize some groups or outcomes as undesirable.

Information systems (IS) research provides strong evidence for the effect of information technology (IT) project risk and on-project failure. However, no consensus has yet been reached on what constitutes risk and how it should be specified. Existing definitions of the risk construct are diverse leading to fragmented scientific knowledge. This article specifies IT project residual risk as an aggregate multidimensional construct comprised of four dimensions: project sources, undesirable events, risk management mechanisms, and expected outcomes. The construct accentuates the dynamic nature of IT project risk and can help reorganize the abundant risk factors found in the IS literature under its four dimensions while exposing their interactions.

The link between risk perception and risk response is not straightforward. There are several individual, community, and national factors that determine how climate change risk is perceived and how much of the perception translates to response. The nexus between risk perception and risk response in the context of water resource management at the individual, household, community, and institutional level has been subject of a large body of theoretical and empirical studies from around the globe. At the individual level, vulnerability, exposure, and cognitive factors are important determinants of climate change risk perception and response. At the community level, risk perception is determined by culture, social pressure, and group identity. Responses to risk vary depending on the level of social cohesion and collective action. At the national level, public support is a key determinant of institutional response to climate change, particularly for democratic nations. The level of global cooperation and major polluting countries’ willingness to curb their fair share of greenhouse gas emissions also deeply influence policymakers’ decisions to respond to climate change risk.

Risk perception is an important component of risk governance, but it cannot and should not determine environmental policies. The reality is that people suffer and even die as a result of false information or perception biases. It is particularly important to be aware of intuitive heuristics and common biases in making inferences from information in a situation where personal or institutional decisions have far-reaching consequences. The gap between risk assessment and risk perception is an important aspect of environmental policy-making. Communicators, risk managers, as well as representatives of the media, stakeholders, and the affected public should be well informed about the results of risk perception and risk response studies. They should be aware of typical patterns of information processing and reasoning when they engage in designing communication programs and risk management measures. At the same time, the potential recipients of information should be cognizant of the major psychological and social mechanisms of perception as a means to avoid painful errors. To reach this goal of mutual enlightenment, it is crucial to understand the mechanisms and processes of how people perceive risks (with emphasis on environmental risks) and how they behave on the basis of their perceptions. Based on the insights from cognitive psychology, social psychology, micro-sociology, and behavioral studies, one can distill some basic lessons for risk governance that reflect universal characteristics of perception and that can be taken for granted in many different cultures and risk contexts. This task of mutual enlightenment on the basis of evidence-based research and investigations is constrained by complexity, uncertainty, and ambiguity in describing, assessing, and analyzing risks, in particular environmental risks. The idea that the “truth” needs to be framed in a way that the targeted audience understands the message is far too simple. In a stochastic and nonlinear understanding of (environmental) risk there are always several (scientifically) legitimate ways of representing scientific insights and causal inferences. Much knowledge in risk and disaster assessment is based on incomplete models, simplified simulations, and expert judgments with a high degree of uncertainty and ambiguity. The juxtaposition of scientific truth, on one hand, and erroneous risk perception, on the other hand, does not reflect the real situation and lends itself to a vision of expertocracy that is neither functionally correct nor democratically justified. The main challenge is to initiate a dialogue that incorporates the limits and uncertainties of scientific knowledge and also starts a learning process by which obvious misperceptions are corrected and the legitimate corridor of interpretation is jointly defined. In essence, expert opinion and lay perception need to be perceived as complementing rather than competing with each other. The very essence of responsible action is to make viable and morally justified decisions in the face of uncertainty based on a range of scientifically legitimate expert assessments. These assessments have to be embedded into the context of criteria for acceptable risks, trade-offs between risks to humans and ecosystems, equitable risk and benefit distribution, and precautionary measures. These criteria most precisely reflect the main concerns revealed by empirical studies on risk perception. Political decision-makers are therefore well advised to collect both ethically justifiable evaluation criteria and standards and the best available systematic knowledge that inform us about the performance of each risk source or disaster-reduction option according to criteria that have been identified and approved in a legitimate due process. Ultimately, decisions on acceptable risks have to be based on a subjective mix of factual evidence, attitudes toward uncertainties, and moral standards.

Many countries rely on social health insurance supplied by competing insurers to enhance fairness and efficiency in healthcare financing. Premiums in these settings are typically community rated per health plan. Though community rating can help achieve fairness objectives, it also leads to a variety of problems due to risk selection, that is, actions by consumers and insurers to exploit “unpriced risk” heterogeneity. From the viewpoint of a consumer, unpriced risk refers to the gap between her expected spending under a health plan and the net premium for that plan. Heterogeneity in unpriced risk can lead to selection by consumers in and out of insurance and between high- and low-value plans. These forms of risk selection can result in upward premium spirals, inefficient take-up of basic coverage, and inefficient sorting of consumers between high- and low-value plans. From the viewpoint of an insurer, unpriced risk refers to the gap between his expected costs under a certain contract and the revenues he receives for that contract. Heterogeneity in unpriced risk incentivizes insurers to alter their plan offerings in order to attract profitable people, resulting in inefficient plan design and possibly in the unavailability of high-quality care. Moreover, insurers have incentives to target profitable people via marketing tools and customer service, which—from a societal perspective—can be considered a waste of resources. Common tools to counteract selection problems are risk equalization, risk sharing, and risk rating of premiums. All three strategies reduce unpriced risk heterogeneity faced by insurers and thus diminish selection actions by insurers such as the altering of plan offerings. Risk rating of premiums also reduces unpriced risk heterogeneity faced by consumers and thus mitigates selection in and out of insurance and between high- and low-value plans. All three strategies, however, come with trade-offs. A smart blend takes advantage of the strengths, while reducing the weaknesses of each strategy. The optimal payment system configuration will depend on how a regulator weighs fairness and efficiency and on how the healthcare system is organized.

The macroeconomic announcement premium refers to the fact that a large fraction of the equity market risk premium is realized on a small number of trading days with significant macroeconomic announcements. Examples include monetary policy announcements by the Federal Open Market Committee, unemployment/non-farm payroll reports, the Producer Price Index published by the U.S. Bureau of Labor Statistics, and the gross domestic product reported by the U.S. Bureau of Economic Analysis. During the period 1961–2023, roughly 44 days per year with macroeconomic announcements account for more than 71% of the aggregate equity market risk compensation. The existence of the macroeconomic announcement premium has important implications for modeling risk preferences in economics and finance. It provides strong support for non-expected utility analysis. The study of Ai and Bansal demonstrates that the existence of the macroeconomic announcement premium implies that investors’ preferences cannot have an expected utility representation and must satisfy generalized risk sensitivity, a property shared by many non-expected utility models such as the maxmin expected utility of Gilboa and Schmeidler, the recursive utility of Epstein and Zin, and the robust control preference of Hansen and Sargent. Because the amount of risk compensation is proportional to the magnitude of variations in marginal utility, the macroeconomic announcement premium highlights information as the most important driver of marginal utility. This observation has profound implications for many economic analyses that rely on modeling either time-series variation or cross-sectional heterogeneity in marginal utility across agents, such as consumption risk sharing, the trade-off between equality and efficiency, exchange rate variations, and so on. The link between macroeconomic policy announcements and financial market risk compensation is an important direction for future research.

Volcanic risk is highly complex, and incorporates social, economic, physical, infrastructural, and cultural elements. It is also high stakes, but low probability—making it particularly challenging for governments to manage. Substantial advances in the understanding of volcanic processes, hazards, and monitoring signals can enable scientists to forecast volcanic activity in many cases, but high levels of uncertainty remain. Volcanology itself is a relatively young science, emerging in the 20th century following the growth of the geological sciences in the post-Enlightenment period. Crises in the late 20th and early 21st century have demonstrated the complexity of applying uncertain scientific models in particular, local, and politically challenging contexts. Volcanology continues to make advances in integrating disciplines—particularly in the combination of physical hazard science with impact assessment, and increasingly with the social sciences. Volcanic eruptions can also substantially alter the power dynamics in a particular context, as volcanologists’ forecasts can become all-consuming for local populations. This is challenging both for scientists and for political officials and populations coming to terms with the threat they may face. The critical geography of disasters, as it incorporates these issues of relationality, must also learn from the action research literature and develop and deploy interventions that can change the emerging possibility spaces within an emergent disaster assemblage. Understanding the relational processes of sociomaterial disasters through an “imaginations” lens can enable interventions to be identified at an early stage.

Natural hazards are a complex governance problem. Managing the risks associated with natural hazards requires action at all scales—from household to national—but coordinating these nested responses to achieve a vertically cohesive course of action is challenging. Moreover, though governments have the legal authority and legitimacy to mandate or facilitate natural hazard risk reduction, non-governmental actors such as business firms, industry associations, research organizations and non-profit organizations hold much of the pertinent knowledge and resources. This interdependence demands horizontal collaboration, but coordinating risk reduction across organizational divides is fraught with challenges and requires skillful leadership. Flood risk management (FRM)—an integrated strategy to reduce the likelihood and impacts of flooding—demonstrates the governance challenge presented by natural hazards. By engaging stakeholders, coordinating public and private efforts, and employing a diversity of policy instruments, FRM can strengthen societal resilience, achieve greater efficiency, and enhance the legitimacy of decisions and actions to reduce flood risk. Implementing FRM, however, requires supportive flood risk governance arrangements that facilitate vertical and horizontal policy coordination by establishing strategic goals, negotiating roles and responsibilities, aligning policy instruments, and allocating resources.

It is instructive to juxtapose two contrasting models of risk communication. The first views risk communication as a product that is packaged and transmitted, unmodified and intact, to a passive public. The second, a relational approach, views it as a process in which experts, the public, and agencies engage in open communication, regarding the public as an equal partner in risk communication. The second model has the benefit of taking advantage of the public’s local knowledge and ability to engage in risk communication themselves. Risk communication should be understood as more of a dynamic process, and less of a packaged object. An example of the relational model is found in Bangladesh’s Cyclone Preparedness Programme, which has incorporated the relational model in its disaster risk reduction training for community volunteers. Nevertheless, the two contrasting models, in practice, are never mutually exclusive, and both are needed for effective disaster risk prevention.

Graphical displays generally facilitate the communication of complex information and are ubiquitous in media. Unfortunately, people differ in their ability to extract data and meaning from graphical representations of quantitative information (i.e., graph literacy). This means that for some people, even well-designed, simple graphs will cause confusion and misunderstanding. Research on the psychology of graph comprehension focuses on two instruments that efficiently assess fundamental graph literacy among diverse adults. The Objective Graph literacy scale is a well-established instrument with good psychometric properties that measures skill via cognitive performance testing (e.g., interpreting and evaluating various graphs). The recently developed Subjective Graph Literacy scale is a brief self-report of graph literacy that can outperform the objective test in notable ways, while reducing text anxiety. Emerging applications in clinical research and practice, including computerized decision aids, can personalize content as a function of one’s graph literacy.

Fundamental structural features of risk maps influence how health risk and burden information is understood. The mapping of health data by medical geographers in the 1800s has evolved into the field of geovisualization and the use of online, geographic information system (GIS) interactive maps. Thematic (statistical) map types provide basic principles for mapping geographic health data. It is important to match the nature of statistical data with map type to minimize the potential for communicating misleading messages. Strategic use of structural map features can facilitate or hinder accurate comprehension of health risk messages in maps. A key challenge remains in designing maps to communicate a clear message given the complexity of modern health risk burdens. Various structural map features such as symbols, color, grouping of statistical data, scale, and legend must be considered for their impact on accurate comprehension and message clarity. Cognitive theory in relationship to map comprehension plays a role, as do insights from research on visualizing uncertainty, future trends in developing predictive mapping tools for public health planning, the use of geo-social and “big data,” as well as data ownership.

The frequency and severity of extreme weather events are expected to increase due to climate change. These developments and challenges have focused the attention of policymakers on the question of how to manage natural hazards. The main political discourse revolves around the questions of how we can make our society more resilient for possible future events. A central challenge reflects collective choices, which affect natural hazards governance, risk, and individual and societal vulnerability. In particular, transboundary river basins present difficult and challenging decisions at local, regional, national, and international levels as they involve and engage large numbers of stakeholders. Each of these groups has different perspectives and interests in how to design and organize flood risk management, which often hinder transnational collaborations in terms of upstream–downstream or different riverbed cooperation. Numerous efforts to resolve these conflicts have historically been tried across the world, particularly in relation to institutional cooperation. Consequently, greater engagement of different countries in management of natural hazards risks could decrease international conflicts and increase capacity at regional and local levels to adapt to future hazard events. Better understanding of the issues, perspectives, choices, and potential for conflict, and clear sharing of responsibilities, is crucial for reducing impacts of future events at the transboundary level.

In the context of this article, risk governance addresses the ways and means—or institutional framework—to lead and manage the issue of risk related to natural phenomena, events, or hazards, also referred to popularly, although incorrectly, as “natural disasters.” At the present time, risk related to natural phenomena includes a major focus on the issue of climate change with which it is intimately connected, climate change being a major source of risk. To lead involves mainly defining policies and proposing legislation, hence proposing goals, conducting, promoting, orienting, providing a vision—namely, reducing the loss of lives and livelihoods as part of sustainable development—also, raising awareness and educating on the topic and addressing the ethical perspective that motivates and facilitates engagement by citizens. To manage involves, among other things, proposing organizational and technical arrangements, as well as regulations allowing the implementation of policies and legislation. Also, it involves monitoring and supervising such implementation to draw further lessons to periodically enhance the policies, legislation, regulations, and organizational and technical arrangements. UNISDR (now known as UNDRR) was established in 2000 to promote and facilitate risk reduction, becoming in a few years one of the main promoters of risk governance in the world and the main global advocate from within the United Nations system. It was an honor to serve as the first director of the UNISDR (2001–2011). A first lesson to be drawn from this experience was the need to identify, understand, and address the obstacles not allowing the implementation of what seems to be obvious to the scientific community but of difficult implementation by governments, private sector, and civil society; and alternatively, the reasons for shortcomings and weaknesses in risk governance. A second lesson identified was that risk related to natural phenomena also provides lessons for governance related to other types of risk in society—environmental, financial, health, security, and so on, each a separate and specialized topic, sharing, however, common risk governance approaches. A third lesson was the relevance of understanding leadership and management as essential components in governance. Drawing lessons on one’s own experience is always risky as it involves some subjectivity in the analysis. In the article, the aim has, nonetheless, been at the utmost objectivity on the essential learnings in having conducted the United Nations International Strategy for Disaster Reduction—UNISDR—from 2001 to around 2009 when leading and managing was shared with another manager, as I prepared for retirement in 2011. Additional lessons are identified, including those related to risk governance as it is academically conceived, hence, what risk governance includes and how it has been implemented by different international, regional, national, and local authorities. Secondly, I identify those lessons related to the experience of leading and managing an organization focused on disaster risk at the international level and in the context of the United Nations system.

Communities facing urban flood risk have access to powerful flood simulation software for use in disaster-risk-reduction (DRR) initiatives. However, recent research has shown that flood risk continues to escalate globally, despite an increase in the primary outcome of flood simulation: increased knowledge. Thus, a key issue with the utilization of urban flood models is not necessarily development of new knowledge about flooding, but rather the achievement of more socially robust and context-sensitive knowledge production capable of converting knowledge into action. There are early indications that this can be accomplished when an urban flood model is used as a tool to bring together local lay and scientific expertise around local priorities and perceptions, and to advance improved, target-oriented methods of flood risk communication. The success of urban flood models as a facilitating agent for knowledge coproduction will depend on whether they are trusted by both the scientific and local expert, and to this end, whether the model constitutes an accurate approximation of flood dynamics is a key issue. This is not a sufficient condition for knowledge coproduction, but it is a necessary one. For example, trust can easily be eroded at the local level by disagreements among scientists about what constitutes an accurate approximation. Motivated by the need for confidence in urban flood models, and the wide variety of models available to users, this article reviews progress in urban flood model development over three eras: (1) the era of theory, when the foundation of urban flood models was established using fluid mechanics principles and considerable attention focused on development of computational methods for solving the one- and two-dimensional equations governing flood flows; (2) the era of data, which took form in the 2000s, and has motivated a reexamination of urban flood model design in response to the transformation from a data-poor to a data-rich modeling environment; and (3) the era of disaster risk reduction, whereby modeling tools are put in the hands of communities facing flood risk and are used to codevelop flood risk knowledge and transform knowledge to action. The article aims to inform decision makers and policy makers regarding the match between model selection and decision points, to orient the engineering community to the varied decision-making and policy needs that arise in the context of DRR activities, to highlight the opportunities and pitfalls associated with alternative urban flood modeling techniques, and to frame areas for future research.

The management of natural hazards is undergoing considerable transformation, including the establishment of risk-based management approaches, the encouragement to govern natural hazards more inclusively, and the rising relevance of the concept of resilience. The benefits of this transformation are usually framed like this: Risk-based approaches are regarded as a rational way of balancing the costs associated with mitigating the consequences of hazards and the anticipated benefits; inclusive modes of governing risks help to increase the acceptance and quality of management processes as well as their outcomes; and the concept of resilience is connoted positively since it demands a greater openness to uncertainties and aims at increasing the capacities of various actors to cope with radical surprises. However, the increasing consideration of both concepts in policy and decision-making processes is associated with a changing demarcation between public and private responsibilities and with an altering relationship between organizations involved in the management process and the wider public. To understand some of these dynamics, this contribution undertakes a change of perspective throughout its development: Instead of asking how the concepts of risk or resilience might be useful to improve the management and governance of natural hazards, one must understand how societies, particularly with regard to their handling of risks and hazards, are governed through the concepts of risk and resilience. Following this perspective, risk-based management approaches have a defensive function in deflecting blame and rationalizing policy choices ex-ante by enabling managing organizations to more clearly define which risks they are responsible for (i.e., non-acceptable risks) and which are beyond their responsibility (i.e., acceptable risks). This demarcation also has profound distributional effects as acceptable risks usually need to be mitigated individually, raising the question of how to ensure the just sharing of the differently distributed benefits and burdens of risk-based approaches. The concept of resilience in this context plays a paradoxical yet complementary role: In its more operational interpretation (e.g., adaptive management), resilience-based management approaches can be in conflict with risk-based approaches as they require those responsible for managing risks to follow antagonistic goals. While the idea of resilience puts an emphasis on openness and flexibility, risk-based approaches try to ensure proportionality by transforming uncertainties into calculable risks. At the same time, resilience-based governance approaches, with their emphasis on self-organization and learning, complement risk-based approaches in the sense that actors or communities that are exposed to “acceptable risks” are implicitly or explicitly made responsible for maintaining their own resilience, whereas the role of public authorities is usually restricted to an enabling one.