HOW AN UNDERSTANDING OF PSYCHOLOGY AND/OR CULTURE CAN HELP MANAGERS THINK CLEARLY ABOUT RISK AND UNCERTAINTY

By

SALAMI, SIKIRU ADIO
Matric No.: 129022064

BEING A TERM PAPER PRESENTED TO PROFESSOR R.O. AYORINDE PROGRAMME: MASTERS OF RISK MANAGEMENT DEPARTMENT: Department of Insurance & Actuarial Science
FACULTY: Business Administration
University of Lagos April, 2014

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TABLE OF CONTENTS

INTRODUCTION PEOPLE’S ATTITUDE TOWARDS RISK CUTURE THEORY
CHRONICLING RISK CULTURE
STRENGTHENING RISK CULTURE
Road Map For Continuous Cultural Improvement
MEASURING CORPORATE CULTURE CULTURE PERSPECTIVE -Functionalist and interpretive view of culture
ATTAINING RISK MATURITY
CONCLUSION
REFERENCES

INTRODUCTION

This paper intends to examine the influence of culture, and psychology of human behaviour on the appreciation of risk and uncertainty. In other words, the paper seeks to provide managers with the proper tools to develop sound responses to risk based on objective analysis of facts in lieu of distorted cultural biases and shallow psychological influences. Effort would be made to chronicle how our responses to risk are often influenced by heuristic biases, psychometric paradigms, and emotional literacy. These influences form the attitudes that become mental hurdles to approaching risk objectively and proactively. Risk in general terms is the possibility of deviation from expectations. Risk covers the entire spectrum of known and unknown possibilities. Risk in this sense, is seen from the standpoint of opportunities, uncertainties and hazards. People’s perception, knowledge and ‘world-view’ shape their understanding of risks, especially hazard risk, and thus influences their risk response actions. In other words, cultures and psychological orientations have tangible and intangible influences on people, and are vital in designing