explain the pervasiveness of risks in business. describe various types of business risks and steps involved in managing business risk.
Answers
strategic risk
compliance risk
financial risk
operational risk
reputational risk
other risk
Answer:
Typical risks a business faces can be divided into Internal and external risks.
Internal Risks Include:
Financial Risk: That a business might loose too much money or might not have enough money to keep it going
Technological Risk: That the service or technology they are using manufacturing goods becomes out-dated and they are left behind.
Human Resource: Bad employees who are ill-equipped and not hardworking can pose a risk
External Risks include:
Socioeconomic and political: This is an example of how political up heavel, social changes, and economic recessions and depression can hamper a business. It is not within the control of the company but it can have an impact on them
Natural Disasters: Flooding, earthquakes, etc can wipe a business out completely
Competition: Competitors always need to be looked out for! They always want to beat you and take your best customers
The best way to mitigate these is to carry out a risk assessment on at least an annual basis and invest thorough in R&D to stay ahead of each problem