Increasing the efficiency of management of the industry through eliminating its non-existing part – the illusory practice of management in conditions of complete determination and complete undetermination

Abstract

In recent years, significant progress has been made in risk management. Moreover, along with risk management, new concepts have been introduced: risk management, risk economics, risk engineering, risk administration and risk production; a new, basic, general and professional criterion for dividing risks (into economic, engineering, administrative and production) has been established; the interpretation of the elements of risk content has been clarified: certainty and uncertainty, in particular, their minimum and maximum values. However, most scientists consider the idea of the existence of such two forms of them — complete certainty and complete uncertainty — to be erroneous. Eliminating illusory management practices is necessary to increase the effectiveness of organizational decisions. In conditions of complete certainty, managers may mistakenly believe that all processes are predictable, which leads to excessive bureaucratization. In conditions of complete uncertainty, the illusion of control contributes to making impulsive decisions without relying on analytics and scenarios of events. The elimination of such illusions allows to form adaptive strategies and respond more effectively to changes in the external environment. Therefore, this section has proven the absence of complete certainty and complete uncertainty both outside and inside the risk. For the first time, the widespread idea of the existence of complete certainty and complete uncertainty has been refuted. The results obtained will deepen our understanding of the essence and content of risk, risk management and risk governance in general, and will increase the efficiency of managing enterprises and organizations in the face of risks by eliminating unnecessary activity in the face of non-existent so-called “complete certainty” and “complete uncertainty”. Such results will allow to concentrate attention and resources on the real subject of risk management — only on risk.