Consider and discuss the following hypothetical situation Ja

Consider and discuss the following hypothetical situation:

Jaipur Oil & Exploration decided to suspend all of its drilling activities off the coast of Sierra Leone, Africa because of new Ebola outbreaks. The strain has mutated since the 2013 outbreak and current treatments are proving ineffective. Which of the three risk classifications does this decision fall into? “Knowns, known-unknowns, or unknown-unknowns?”

Discuss the classifications, and feel free to bring in other examples from an Internet search that reflect corporate decisions, made in real life, that fall into one of the three risk categories.

This is a hypothetical situation, there is no case

Solution

The decision falls into the category of Known Unknowns. It is so because the company was aware of earlier outbreaks of ebola in 2013, but its risk assessment was proved wrong due to mutation of strain and medicines becoming ineffective and an unknown risk coming to the front.

knowns risks are the ones that are previously identified as the potential threats and the corporate entities make allowances for them in advance to minimize the damage caused if they occur. An example is the preparedness of a construction project in a Hurricane prone zone in a season known for occurance of hurricanes. Known unknowns are the ones which we know we don\'t know. An example is a cancelled flight which we know but we don\'t know when it is going to happen. unknown unknowns are the ones that we don\'t know that we don\'t know. These include the events which are completely unimaginable like an alien spaceship falling over a construction project.