Explain the pervasiveness of risks in business. Describe various types of business risks and the steps involved in managing business risks
Answers
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