Conceptual Interpretation of First and Second Kinds of Errors at Management Mode Selection under Conditions of Its Possible Crisis State

Abstract

Errors in the selection of management practices at an enterprise confronting the prospect of crisis are considered: specifically, the adoption of standard management during a crisis; or crisis management when no crisis exists. By analogy with classical approaches in probability theory and operational research, such errors are interpreted as errors of the first and second kind. The basic problems arising from such errors are identified, and some measures are proposed for reducing their likelihood. The results should prove useful to managers at industrial enterprises, consulting firms, developers of management systems, and the faculty at universities and staff-training centers.