Optimizing decisions using knowledge risk strategy

Abstract

Purpose: The paper aims to focus on a strategic approach for making trade-offs between knowledge and risk. Design/methodology/approach: Knowledge and risk are viewed as organizational resources that have an inherent trade-off between them, so that optimal firm performance does not necessarily arise through greater accumulation of knowledge nor from reduced risk. This trade-off is represented as an efficient knowledge-risk frontier. The paper examines the dynamics of this frontier on organizational performance. Findings: The concept of knowledge-risk strategy is presented which contends that non-probabilistic risk or uncertainty originates from gaps in knowledge. Research limitations implicat..