BUS 519 Discussion 5: Risk Perception

“Risk Perception” Please respond to the following:

Using the information presented in “Common Influences on Risk Perception” Figure 6-3 (Hillson and Simon text), determine the conscious factors, subconscious factors, and affective factors for this project. Examine how awareness of such factors influences the decision of hiring outside vendors. In addition, analyze how the stated factors help improve the overall facilitation and effectiveness of the risk management.

Outsourcing has become such an important part of business today. It can help lower production costs, complete projects faster and allow for expansion. But there can be many risks involved with it as well. Conscious factors can include familiarity, manageability, proximity, propinquity, and organizational culture. Subconscious factors include intuition, anchoring, availability, representativeness, and precautionary principle. The affective factors include love, desire, and fear. Outsourcing can be a risk and should be explored. Research should be done on the company they are looking to hire, ask by word of mouth, or simply put together an interview. It is important to take all factors into consideration before hiring an outside vendor. They should be able to work together to meet a common goal.

Gregory,

I agree that a company needs to be aware of whom they are getting into business with. It is important to take all factors into consideration before hiring an outside vendor. They should be able to work together to meet a common goal. It can be quite risky trying to outsource work but being able to find the right vendor can greatly impact the business.

Anthony,

I agree that the influence should come from research. Your questions were great. Research should be done on the company they are looking to hire, ask by word of mouth, or simply put together an interview. Each of these factors should be explored before jumping ship with the first vendor available.