Review of Business: Interdisciplinary Journal on Risk and Society - Volume 39 Number 1

In principle, a business ought to thrive when its leaders make good plans (plans that provide for compensation greater than the risk implied in those plans), and its people bring those plans to fruition. However, in practice, dynamic causeand-effect cascades, knotty interdependencies, complex interactions, the nature of randomness, how people perceive information, changing tastes, regulatory shifts, malicious acts, and so on, all combine to create positive or negative deviations from what is anticipated. The study of risk management encompasses the diversity of actions, processes, and rituals a business adopts, and the battery of instruments it uses, to safeguard its plans. Businesses rely on risk management both as they formulate plans, and as they implement them. They manage risk either in anticipation of, or in reaction to, events. While businesses have become adept in neutralizing negative deviations to plans, they are still learning how to promote positive deviations. The financial and nonpecuniary costs of managing risk, meanwhile, are adding up