The Business School

Principles of Risk
Risk Perception and Tolerance

The Business School
Risk Perception
Much of this material draws upon the literature review undertaken by Williamson and Weyman (2005) Review of the Public Perception of Risk, and Stakeholder Engagement Health & Safety Laboratory
But also APM (2004) Project Risk Analysis and Management Guide APM Publishing Also work by John Adams – see

The Business School
Risk – conceptual framework
realist perspective: „there is an objective reality that is ultimately knowable through empirical investigation‟


Williamson & Weyman (2005)

constructionist position: ‘that reality is constructed and represented through discursive social processes …. risk (is) relative‟

The Business School
The risk ‘thermostat’ – Adams (1995) Propensity to take risks Balancing behaviour Rewards

Perceived danger


The Business School
Influences on behaviour
Perception Attitude Personality Motivation

The individual

Group Organisation Environments

The situation
APM (2004)

The Business School
Rational Actor Models: Behavioural Decision Theory
Early work considered economic models of rationality and utility.
Starr (1969) then looked at ‘revealed preferences’: risks are evaluated in terms of costs and benefits. ‘non-rational’ decision making then explained as the ‘short-cuts’ people use „to reduce and manage the complexity of the world around them‟ [Williamson and Weyman (2005)]

The Business School
Rational Actor Models: Value Expectancy Theory
Weinstein (1993) considers the common characteristics of value expectancy models to be: a. The desire to minimise the negative consequences of an anticipated event motivates individuals to protect themselves. b. The perceived seriousness of these consequences is judged to influence the outcome of the self-protective behaviour. c. The perceived likelihood of an event occurring influences the motivation to adopt self protective behaviour. d. The benefits of self-protective behaviour are weighed against the costs of such behaviour

The Business School
The Psychometric Approach
Initial approach involved the application of multivariate statistical techniques to attitudinal data to examine peoples’ ‘expressed risk evaluations’
Further research developed towards two key characteristics or dimensions influencing people’s perception of risk: – seriousness of consequences (perceived dread); and, – degree of familiarity/uncertainty (unknown risk). Later noted cross-cultural differences in tolerability of risk

The Business School
The Mental Models Approach
This approach considers gaps in understanding of hazards between expert and lay models of risk.

Weyman and Kelly (1999) summarise some key findings, especially around specific hazardous substances:
– The difficulties people face in understanding the differences between single exposure and repeated exposures. Patterns of repeated behaviour are understood as discrete incidents (‘accumulation bias’) – The decreased risk that people judge their own behaviour when comparing themselves to others who behave in the same way (‘optimistic bias’) – The search for causal explanation can bias people to make associations between two factors because they are close together (‘cerebral contiguity’)

The Business School
Social, Cultural And Organisational Processes: Cultural Theory
Two domains of ‘cultural bias’ and ‘social relations’ are taken to explain differences in risk perception.
Risks are „selected for attention that reinforce the group‟s position or way of life, relative to other groups‟. Weyman and Kelly (1999) suggest, the focus on risk expresses „wider socio-political interests and agendas‟. Walker et al (1998) also highlight the geographical location of the hazard: location influences the perception of risk to the extent it provides the physical setting

The Business School
The Social Amplification of Risk
Recent sociological risk research is sceptical about any individual theoretical paradigm. So - social amplification of risk is becoming a focus for integrating multi-disciplinary approaches to risk.
Some of this links into risk communication and media-based or media-led perceptions of risk (to be considered later). Amongst findings are: • Public perception/responses to hazards can be more rational than might be thought; • Risk signals that are attributable to incompetent risk management are important for public concern; • Similarly, trust and perception in institutional risk management handling of risk are important.

The Business School
Social, Cultural And Organisational Processes • • • • • Perceived control Psychological time and risk Familiarity Trust and distrust The Framing of Risk

Variables Influencing Perceptions of Risk The Business School

The Typology of Trust (Poortinga and Pidgeon 2003)

H Acceptance


Critical Trust Rejection (Cynicism)


L Scepticism

The Business School
A successful risk manager Risk management is:
• a balancing act • instinctive • intuitive • influenced by experience • modified by culture
From: Session_One_John_Adams.pdf

The Business School
The risk ‘thermostat’ – Adams (1995)
Propensity to take risks Balancing behaviour
But there is a bottom loop bias …. Reducing risks, protecting people Perceived ‘Accidents’ Exercising a powerful influence danger for accident prevention


The Business School

The Business School
Do cyclists really need helmets? Two years ago I was invited to give a lecture in Amsterdam comparing Dutch and British attitudes to risk. I complimented my hosts on having a much better cycling accident record than the British, and went on to say that I had been in Amsterdam for two days and seen many thousands of cyclists but only half a dozen cycle helmets. A member of the audience responded by saying that I had been looking in the wrong place. He offered to show me the following morning a disciplined file of children on bicycles all wearing helmets and fluorescent jackets. They would, he added, be cycling to the British school. from blog August 15 2008

The Business School
Severe Acute Respiratory Syndrome (Sars)
Described as a “respiratory illness of unknown etiology” …. “pneumonia or respiratory distress syndrome without an identifiable cause” AND in someone who within 10 days of onset of symptoms has been in an area with “documented or suspected community transmission of Sars”. Canadian research found that Sars appears like other forms of pneumonia to kill mostly the old and vulnerable - the average of death of Canadian Sars victims is 74. Frank Plummer, the principle Canadian researcher: “I think everyone is under huge pressure to get stuff out, and the journals are bugging people for papers. And some people are slapping things together. My position is I remain to be convinced.”

The Business School
Of the 31678 fatalities attributed to pneumonia in Britain in 2001 31351 (99%) were described as "Pneumonia, organism unspecified". Timescale Year Month Week Day World 54,997,000 4,583,000 1,058,000 151, 090 UK 612,000
UK deaths = 0

Global deaths = 774

11,737 1,677

So …. if Sars is nothing more than pneumonia plus contact history, but there is no agreed set of symptoms for classifying the up-stream contacts, how can we estimate the risk?

The Business School
Three kinds of risk – Adams (various dates)
Perceived through science
Eg cholera – need a microscope to see and training to understand

Perceived directly

Virtual risk

Eg climbing a tree, riding a bike, etc.

Scientists don’t know or can’t agree eg low level radiation, global warming, mobile phones .. The stock market?

The Business School

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer: Get 4 months of Scribd and The New York Times for just $1.87 per week!

Master Your Semester with a Special Offer from Scribd & The New York Times