Evolving Risk Management Frameworks for Complex Systems—An Empirically Grounded Systems Thinking Approach

Abstract

The increasing complexity of systems is demanding a paradigm shift in risk management frameworks (RMFs). This study adopts a systems thinking approach to conduct an empirically grounded analysis (EGA) of the risk management practices of Flight Test crews operating in a dynamic environment with catastrophic consequences. Extending upon qualitative research that elicited the unique RMF of Flight Test crews, the EGA examines the academic theory underlying why the Flight Test crew approach to applying multiple mitigations to system hazards is effective. Grounded in risk and utility theory, this research then presents a novel RMF that aligns effective risk management tools with the intricacy level (dynamism, determinism and latency) of the underlying system, categorized using a Cynefin ontological framework. This novel RMF accommodates the attributes of complexity exhibited by socio-technical systems, enabling effective (and therefore efficient) resource allocation when mitigating risk in complex systems. Using the systems thinking approach of the Flight Test crews, this EGA contributes a validated, generalized RMF to support decision-making in organizations operating complex systems.