The presentation talks about the basic philosophy of Risk Intelligence, as it throws light on the reason, proneness and the behavior of people and organizations to deal with risks that might effect the movement towards the desired objectives. For more details checkout my blog at www.sharpnessquotient.blogspot.in

1. Uncertainty Avoidance
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Risk Intelligence
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2. • Uncertainty Avoidance (UA) is the dimension that expresses the degree to which an organization or a person feels uncomfortable with a
sense of uncertainty and ambiguity.
• Countries that exhibit strong Uncertainty avoidance Index or UAI, maintain rigid codes of belief and behaviour and are intolerant of
unorthodox behaviour and ideas.
• Weak UAI societies maintain a more relaxed attitude in which practice counts more than principles.
• People in cultures with high uncertainty avoidance tend to be more emotional, they try to minimize the occurrence of unknown and
unusual circumstances and to proceed with careful changes step by step by planning and by implementing rules, laws and regulations.
• In contrast, low uncertainty avoidance cultures accept and feel comfortable in unstructured situations or changeable environments and
try to have as few rules as possible. People in these cultures tend to be more pragmatic, they are more tolerant of change.
Uncertainty Avoidance
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© Copyright Mr. Sandeep Bhatnagar – Risk Intelligence series whitepaper serial 1121A
Risk Intelligence
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3. • There are many ways to detect if one has adopted a high standard of Uncertainty Avoidance. For example, the use of
formality in interaction with others, dependence of formalized policies and procedures, apparent resistance of change are all
characteristics of high uncertainty avoidance.
• Basic characteristics of High Uncertainty Avoidance –
o follow a strict structure with rules and expertise
o have high security (avoiding the unfamiliar)
o are generally hectic, stressful or even emotional.
High Uncertainty Avoidance
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© Copyright Mr. Sandeep Bhatnagar – Risk Intelligence series whitepaper serial 1121A
Risk Intelligence
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4. • In contrast people can also exhibit characteristics of low Uncertainty Avoidance. Unlike high UA, those with a low level use
informality in interaction with others, they often rely on informal norms and behaviours in most matters. Also, they will
show moderate resistance to change.
• Signs of low uncertainty avoidance
o abide by only a few rules
o sustain with little set structure
o incidences of conflicts of interests, chaos
Low Uncertainty Avoidance
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© Copyright Mr. Sandeep Bhatnagar – Risk Intelligence series whitepaper serial 1121A
Risk Intelligence
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5. • Those with High Uncertainty Avoidance prefer formal rules, strong social norms, and other ways of avoiding uncertainty
whereby although monotony is dominant than creativity yet predictable risks are aggressively covered
• Those with Low Uncertainty Avoidance profile emphasis is more on informal, unstructured, or fluid roles and behaviours
that result in innovations , creative thinking and self controlled obligations and value systems. The drawbacks include
anarchy, indifference and insolence .
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seriesRisk
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6. • High Uncertainty Avoidance Countries Some of the highest uncertainty avoidance countries include Russia, Germany,
Turkey, or France.
• Low Uncertainty Avoidance Countries Some of the lowest uncertainty avoidance countries include Switzerland
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Risk Intelligence
seriesUncertainty Avoidance Countries
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7. • One of the greatest and most renowned researchers of Uncertainty avoidance is Hofstede. He has a theory called “cultural
dimensions theory” where he studies different dimensions of national culture including, Power Distance, Individualism
versus Collectivism, Masculinity versus Femeninity, Long-term versus Short-term orientation and of course the concepts of
Uncertainty Avoidance.
• David S. Baker and Kerry D. Carson performed a study to evaluate the uncertainty avoidance among field sales personnel.
They selected 155 of them from United States, Canada, United Kingdom, Australia, and New Zealand. They inspected
attachment and avoidance as the two ways of expressing individual uncertainty avoidance. Their research pointed towards
individuals using both attachment and avoidance to lower their uncertainty avoidance in the workplace.
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Risk Intelligence
seriesThinkers on UAI
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8. • People who were high on Uncertainty Avoidance and those low behave differently.
o Those sales personnel that were low on Uncertainty Avoidance saw no need to attach with their team or adapt to
their environment settings
o Those high on UA used both avoidance and attachment to deal with situations.
o Those who reported moderate levels on uncertainty avoidance preferred to use adaptation rather than attachment
when needed.
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Risk Intelligence
seriesApplication on Human Resources
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9. • Uncertainty Avoidance Index has a significant effect on consumer's acceptance of unfamiliar brands in the retail market.
o Brand familiarity, celebrity endorsement and cultural differences all have an effect on determining an individual's
Uncertainty Avoidance Index (UAI).
o Ms. Eliane Karsaklian has studied the effect these influences towards UAI have on consumer's attitude towards
familiar and unfamiliar brands in different cultures (specifically American and French). She concludes that uncertainty
avoidance has a deep role in shaping consumer's attitude towards brands.
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Risk Intelligence
seriesApplication in Marketing
© Copyright Mr. Sandeep Bhatnagar – Risk Intelligence series whitepaper serial 1121A