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Wayne Cascio, Ph.D., Professor and Robert H. Reynolds Chair in Global Leadership, University of Colorado
"It seems to be a law of nature, inflexible and inexorable, that those who will not risk cannot win."—John Paul Jones Paradoxically, one of the unfortunate byproducts of employment downsizing—a phenomenon that seems to continue unabated in both good and bad economic times—is that surviving employees become narrow-minded, risk-averse and self-absorbed. This happens at the very time when organizations need their employees to take risks in order to develop new products and services, to penetrate new markets, and to serve their customers better. Yet the term "risk" has come to imply a bad outcome. It may be more prudent, however, to rethink the concept of risk in light of two other considerations: uncertainty and opportunity.Uncertainty is the degree to which we are unsure about whether an outcome will occur and its consequences, good or bad. Risk refers to an undesirable outcome and its consequences. Finally, opportunity refers to a desirable outcome and its consequences. A prudent approach to human capital risk requires carefully distinguishing these three ideas. Uncertainty is not necessarily a bad thing, but it depends on the balance between downside risk and upside opportunity.HR Strategy and the Two Faces of RiskHR strategy refers to the processes, decisions and choices organizations make regarding how they manage their people. Indeed, a firm's competitive strategy and its HR strategy are interdependent.1 Both require a prudent and balanced approach to risk. HR strategy must optimally balance risk-taking and risk-mitigation, in line with an organization's competitive strategy and the role of human capital within that strategy.
HR strategy requires a focus on planned major changes in an organization and on critical issues such as the following:
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