Baltic Journal of Economic Studies (Dec 2018)
METHODOLOGICAL BASES OF CLASSIFICATION OF SOCIAL RISKS
Abstract
The purpose of the study is to develop methodological principles of classification of social risks in the context of requirements of social risk management. The risk is considered as possible occurrence of a risk of a negative state of a particular phenomenon or event, undesirable by the object. Social risks are proposed to be all risks arising in the social sphere. When analysing the existing solutions to the problem, classifying social risks according to the requirements of social risk management, the paper uses the following research methods: system approach, analysis and synthesis. The research subject – social risks in the light of their classification by certain characteristic features from the perspective of requirements of social risk management. Analysis of the application of hierarchical and facet methods for the classification of social risks is carried out. The use of a combined approach, i.e. when at some levels of classification risks are classified by using the hierarchical method, and at others – by facet one, is proposed. The necessity and sufficiency of 6 levels of risk division are shown. The 1st level of classification is directed to the division of a set of risks by nature and character of occurrence into macrolevel categories, accordingly, into natural, technogenic, economic, and social. The 2nd level is classified by factors of risk formation. These are risks of social policy, risks of stochastic nature of the formation, physiological risks, and behavioural risks. The 3rd level of classification – risks that are combined in the following forms by the sphere of activity: risks of reproduction of the population, employment of population, income and expenditure of population, living conditions and housing and utilities, education, healthcare, law enforcement, environment, risks of deteriorating social indicators when compared with other countries in the world. The 4th level of classification – by risk types, and the 5th – by levels of the hierarchy of public activity. The 1st, 2nd, and 4th levels are classified by the hierarchical method, 3rd and 5th – by facet method. The 6th level is facet with the horizontal distribution of risks into facets by different features. Conclusion. It is substantiated that obtained results arise from the provisions of economic theory and are in agreement with the acting organisational structure of societal life, which will contribute to creating better conditions for managing social risks. Social risk management begins from the definition of type and nature of risk, place and level of its formation, presentation of its determined characteristics. Here a need arises to divide a set of risks based on the defined signs and criteria into separate subsets. That is, a need arises to classify risks into more concrete groups with similar features. Accordingly, risk classification is important and necessary stage of social risk management. In practice, risk classification is carried out, as a rule, by using facet method when each facet includes an aggregate of risks with homogeneous values of this classification feature. Facet classification is single-level, that is, it does not stipulate for further division of risks into more detailed groups, however, the need for vertical hierarchical multilevel specification arises. The analysis shows that multilevel combined classification system when hierarchical method alternates with facet one satisfies the requirements of social risk management.
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