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caution might seem even more obviously desirable However, while promoting enlightened caution, formal risk analysis can and should also encourage enlightened gambles , de ned as risk ef cient gambles involving signi cant risk that is considered bearable For oil majors involved in 1,000 million projects in the 1970s and 1980s, potential losses much greater than 100 200 million were part of the territory To enable them to live with these risks, joint ventures were common Over 10 such projects, taking the risk described in Example 32, equate to an expected cost saving of 15 million times 10, or 150 million Oil companies could not afford to pass up expected cost savings on this level in order to reduce risks that did not need to be reduced Enlightened gambles were a key part of the culture.

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Organizations that do not take enlightened gambles reduce their average pro tability and may guarantee eventually going out of business The authors have experience of programmes speci cally designed to demonstrate the need for such enlightened gambles in organizations that spend too much on avoiding gambles the equivalent of persistent overinsurance Formal risk management can facilitate, demonstrate, and encourage enlightened gambles as a basis for engineering associated organization culture changes In the context of Example 32, if the gamble had paid off, the virtue of the enlightened gamble would have been veri ed empirically However, the occasional, visible, high-level failure of such gambles is extremely important, because it demonstrates that good managers who take risk ef cient gambles are sometimes unlucky If no quanti ed risk analysis had been undertaken to demonstrate the expected cost saving associated with the Example 3.

Clinical Findings without Client Compliance Jenna s second client was referred for a psychological evaluation by the university disciplinary committee after recklessly endangering the welfare of others when one of his experiments in the chemistry lab exploded, producing a major fire. Very charming and personable, he denied any wrongdoing, stating that he wanted to cooperate fully. Nevertheless, psychological testing showed that he denied even minor faults to which almost everyone else would ordinarily admit. Despite his protests of innocence, a criminal record, together with consultation with family members, confirmed the presence of narcissistic and antisocial traits, ultimately contributing to his expulsion from the university.

2 enlightened gamble, this message would have been lost, whatever the outcome In the absence of a demonstrated expected cost bene t and an organizational culture that promotes enlightened gambles, astute managers do not take such gambles and very astute managers don t even look for them Risk management can facilitate a search for opportunities to take enlightened gambles, demonstrate that such gambles are worth taking, and encourage a culture change where this mode of thinking and behaviour becomes the norm even when formal risk analysis is not involved Enlightened caution means that sometimes money will be spent on proactive risk management that in the event proves unnecessary Enlightened gambles mean that sometimes money will not be spent on proactive risk management that in the event proves unlucky.

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Emphasizes the vulnerability of children and young adults States conditions under which volunteers may be alone with children and young adults Describes situations in which written parental consent is required Specifies the conditions under which children may be transported Describes limits on physical contact

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The general cultural issue is concerned with distinguishing between good luck and good management, bad luck and bad management, in order to persuade people to take the right risks and avoid the wrong ones, in risk ef ciency and risk/ expected performance trade-off terms Particularly at middle and lower levels of management involving decisions that risk analysis may not reach directly, changing the culture to promote enlightened gambles can have a signi cant impact on organizational performance Unenlightened gambles (gambles that are not risk ef cient, or risk ef cient but inappropriate) are an obvious concern of risk analysis to be rooted out and.

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