Management and Complexity Theory
Human Dimension of
is resistance to fear, mastery of fear, not absence of fear."
Complexity, Risk, Stakeholders.
Risk Management and Complexity Theory -
The Human Dimension of Risk
outcome of projects is always uncertain and risk management has become
a ‘hot topic’ in recent years. However, despite all
of the interest, risk management remains one of the least appreciated
aspects of modern management.
Whilst arguably the key competence (or competitive advantage) of every
organisation is its ability to effectively manage the risks
inherent in its environment; most organisations are excessively risk
averse, and in their attempts to avoid ‘all risk’
expose themselves to more adverse outcomes than if they actively
embraced and managed risk. No client can avoid the ultimate risks
associated with its project such as the liquidation of its prime
contractor; these major events inevitably impact the client and by
attempting to quarantine itself from ‘all risk’,
the client simply passes the benefit of any favourable outcomes to its
Within this framework, ‘Complexity Theory’ helps us
understand the social behaviours of teams and networks of people
involved in and around a project. This paper briefly examines
the development of ‘Complexity Theory’ from its
origins in Chaos Theory to the ideas of ‘Complex Responsive
Processes of Relating’ (CRPR) and seek to link the ideas
within Complexity Theory to the practice of risk management so as to
develop an understanding of risk and uncertainty from the viewpoint of
The paper then describes the key aspects of risk management from the
human perspective, with a view to optimising the overall risk
management for a project and its host organisation. Particular focus is
on the risk attitudes and competencies required at each level of
management to optimise risk.
The paper concludes by developing a range of practical suggestions for
improving the effectiveness of risk management practice within projects
based on an understanding of ‘complexity theory’
applied to the project environment.