A Risk Management Framework for Decision Support under Uncertainty

Abstract

The previous chapters have shown the need for providing guidance and a structure for decision-making in situations involving high risks and large uncertainties. To this end we present in this chapter a framework for risk management and decision-making under uncertainty. The framework comprises the following main elements

• problem definition (challenges, goals and alternatives),

• stakeholders,

• concerns that affect the consequence analyses and the value judgements related to these consequences and analyses (frame conditions and constraints),

• identification of which consequence analyses to execute and execution of these,

• managerial review and judgement,

• and the decision.

Risk is defined as the combination of the two basic dimensions: a) possible consequences and b) associated uncertainties. As there are many facets of these dimensions, the framework means a broad perspective on risk, reflecting for example that there might be different assessments of uncertainties, as well as different views on how these uncertainties should be dealt with. This is also reflected by the risk classification scheme adopted, based on the system introduced by Klinke and Renn (2000) and modified by Kristensen and Aven (2004).