Abstract
M.Phil.
Since the beginning of recorded history and probably before, man has been plagued by what the future holds for him. Initially man felt himself to be at the mercy of the gods, and his “fate” was in their hands. As man learned to overcome his superstition he started identifying patterns in his existence. He learnt from experience that certain events re-occurred, thereby allowing him to “predict” the future.
This thesis will explore man’s historical effort to stabilise his existence by minimising the risk that he is exposed to. The researcher will then try to identify what hinders man from truly minimising the risk that he assumes or at least how he could improve his probability of success. The researcher will draw from the manufacturing, banking and academic environments as well as the researcher’s personal experience and observations.
The thesis begins with a short history of probability and how it found its way into manufacturing as a tool to improve quality. Then risk management as a discipline designed to improve the reliability of organisations will be discussed and finally how it found its way into banking regulations to help improve the stability of the financial system. The researcher hopes to provide insight into the application of risk management and how human emotion and expectations limit the effectiveness of this tool. The researcher will propose a solution to the problem of balancing past experience with future expectation.