Academic journal article ASBM Journal of Management

The Risk(y) Rationality: Towards a Conceptual Framework for Managing Risk during Product Innovation

Academic journal article ASBM Journal of Management

The Risk(y) Rationality: Towards a Conceptual Framework for Managing Risk during Product Innovation

Article excerpt

Introduction

Many scholars believe that organizational studies frequently overlook major sociological treatments of the problematic nature of contemporary society into their routine investigations (Clegg et ah, 2006). This paper attempts to use the idea of risk management in innovation as a lever for integrating sociological explorations of the risk into organizational studies. Narrow technical approaches to risk in innovation, what Wynne (2002) characterizes as the 'cultural reification of risk', not only fail to capture the dynamic uncertainty of innovation but continue to dominate our ritualistic thought and actions concerning risk management tools, techniques and theories (Wynne, 2002).

The observation of the limitations and restrictions of such what some call rationalistic approaches to not only risk and innovation but also management and organizational dynamics in general is far from new. From Simon and Lindblom to March and Olsen, classical rational models of decision making have long been replaced by more realistic views of 'bounded rationality' and 'purposive muddling through' (March, 1978). In studies of innovation and risk, the inherently uncertain nature of creative 'improvisation' (Leybourne, 2005) and 'mindful' sense-making (Messner et al. 2005) is widely recognized and debated. However, what is 'bracketed out' (Latour, 2003) by such traditional rationalistic views is not only uncertainty and ambiguity, - the 'bounded' nature of rational approaches to risk - but also the role of emotions (beyond 'bounded emotionality) (Mumby and Putnam, 1992), the intricate intertwining of 'socio-technological imbroglios' (Latour, 1993), and both the micro and macro political dimensions that inform and shape rational calculation ('bounded politicality'). Moreover, this 'bracketing out' is not simply a quirk of academia but is also a central feature of modernism and its concomitant ethos of the progressive rationalization of the world.

What this creates is a dilemma at the heart of the modernist enterprise. On the one hand, a dominant ethos of rationality informs idea of progress and how organizations and society, innovation and risk, are effectively managed and controlled. On the other hand, how science and technology advances, how organizations are managed and society controlled, are all riven with uncertainty, emotionality, politics and intrigue. Modernity creates and denies non-rationality that promotes and informs its rationality. For critics such as Latour (2004) and Wynne (1996), this has been an ever present tension within modernity. For Beck, Giddens and Lash (1994) it is a tension that has become particularly paramount in late modern societies, as they increasingly become 'risk societies' - seeking to manage and control in rational ways the problems that their rationality creates - and spawn an increasing degree of 'reflexive modernisation', as the limitations of modernization and its rational control become apparent.

The purpose of this paper is to explore the dual character of risk in process of innovation in late modern societies. On the one hand, it examines its existence as a phenomenon that is understood and analysed in traditional rationalistic terms as a form of regulated uncertainty that is to be managed and controlled through improved techniques and practices. It characterises this as established risk rationality. This view of risk is both an intellectual discourse and an embedded cultural phenomenon and set of ritualistic activities. On the other hand, it explores risk as a phenomenon that is only partially addressed by such rationalistic forms of thought and action, which, in somewhat clichéd terms, are part of the 'problem' rather than the 'solution'. The rationality, or rationalities, of late modern society generate their own nonrationalities - and 'risks'. This truncated view of the nature of risk and its control fails to capture the fundamental sources of risk or inform thought and activities able to address the technical, economic, social and political problems that it creates2. …

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