Quality in the Era of Industry 4.0

7Risk Management in the 21st Century

7.1 Introduction

In the fast‐paced, interconnected world of the 21st century, organizations confront a spectrum of risks that could potentially influence their operations, reputation, and overall success. Risk management has, therefore, evolved as an indispensable discipline that aids in the navigation of uncertainties and proactive confrontation of possible threats. This chapter delves deep into the domain of risk management within the context of the 21st century, exploring the mutating risk landscape, methodologies for risk identification, assessment, and mitigation, as well as the emerging trends that are set to shape the future of risk management [1–4]. A growing body of literature on risk management underscores its growing importance in a volatile, uncertain, complex, and ambiguous (VUCA) world [5]. Borge [6] presents a comprehensive guide on risk management, examining different risks and corresponding mitigation strategies. He argues that understanding risks is crucial for strategic planning and decision‐making in organizations.

The chapter initially builds a foundational understanding by defining risk and inspecting its various manifestations. It delves into a wide range of risks that have arisen in the 21st century, including technological advancements, environmental issues, socioeconomic shifts, geopolitical dynamics, and health crises. By understanding the nature and breadth of these nascent risks, organizations are better equipped ...