Question

What are the nature and causes of business risks?

Answer 1

Business risks arise due to a variety ofcauses, which are classified as follows: Natural causes: These include probability of loss due to floods, storms, cyclones, earthquakes and such other convulsions of nature. They result in heavy loss of life, property and income in business.
বিভিন্ন ধরনের কারণে ঝুঁকি দেখা দেয়, যা নিম্নরূপ শ্রেণীবদ্ধ করা হয়: প্রাকৃতিক কারণ: বন্যার কারণে, ঝড়, ঘূর্ণিঝড়, ভূমিকম্প ও প্রকৃতির অন্যান্য আক্রমনের ফলে ক্ষতির সম্ভাবনা রয়েছে। ফলে ব্যবসায়ে জীবন, সম্পত্তি এবং আয়ের বিপুল ক্ষতি হয়।

Answer 2

NATURE OF BUSINESS RISKS :-

♥ Business risks arise due to uncertainties - Lack of knowledge of what is going to happen in future create uncertainties in business . It may be due to natural calamities , change in demand and prices , strikes etc .

♥ Risk is an essential part of every business - No business can avoid risk although the amount of risk may vary from business to business . Risk can be minimized but cannot be eliminated .

♥ Degree of risk depends mainly upon the nature and size of business - Level of risk is lower for small scale business while it is higher for large scale organization .

♥ Profit is the reward for risk taking - A business gets profit as return for undertaking risk . Greater the risk involved in a business , higher is the chance of profit .

CAUSES OF BUSINESS RISKS :-

♥ Natural Causes - Human beings have little control over natural calamities like flood , earthquake , famine , etc... They result in heavy losses of life , property & income in business .

♥ Human Causes - Human causes include such unexpected events like dishonesty , carelessness or negligence of employees , strikes , riots , management inefficiency etc..

♥ Economic causes - They are related to a chance of loss due to change in market condition e.g. , fluctuations in demand and prices , competition , change in technology etc..

♥ Physical causes - Mechanical defects or failures may also lead to losses e.g., bursting of boiler or machine may cause death or destruction .

♥ Other causes - These include unforeseen events like political disturbances , fluctuation in exchange rates etc...