Focus of Risk Management

Abstract: In the contemporary literature and empirical investigation of risk, a clear distinction between risk that is controllable and risk that is out of the range of control for the individual is missing. This paper proposes the idea of a focus on risk management based on the distinction into risks one can control and risks one cannot control. Making this distinction has become essential in light of the constant bombardment with news on social online media. Overall, risks one cannot control may add a layer of complexity and emotional impact to our lives, which may drain cognitive capacity and confidence in control. An overly focus on uncontrollable risks may create negative emotionality and leave the individual with feelings of helplessness and fear. On the contrary, a clear focus on risks one can control may not only help in navigating through life more efficiently. It may also breed feelings of self-confidence and positive affirmation through control and positive outcomes. The paper discusses intervention strategies to avert a blurred or overly focus on uncontrollable risks as a way to enhance productivity and efficiency but also emotional wellbeing of the individual, the family, social groups and society. The discussion also highlights boundary conditions where focus on uncontrollable risks is needed when it comes to long-term intergenerational care. Keywords: Control, Costs and Benefits, Emotions, Law & Economics, Risk, Risk Management, Uncertainty