Exploring the concept of business risk, this content delves into the types, causes, and management strategies of risks faced by companies. It covers strategic, operational, financial, compliance, and reputational risks, highlighting the importance of identifying, evaluating, and prioritizing these risks. The text also discusses implementing risk management strategies and real-world applications to ensure a company's resilience and success.
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Strategic risks arise from changes in the industry or competitive landscape
Operational risks are linked to day-to-day operations and can include system breakdowns or human error
Financial risks involve exposure to financial losses from factors such as exchange rate fluctuations or credit issues
Natural risks include events like hurricanes or earthquakes, which can be mitigated through insurance
Human risks involve aspects such as labor relations, management decisions, or consumer behavior changes
Economic risks are associated with financial market dynamics, competitive pressures, and changes in government policy or interest rates
00
To lessen the effects of business risks, companies should engage in ______ planning and establish strong ______ management practices.
careful
risk
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Strategic Risk Origin
Caused by ineffective business plan due to industry changes or competitive shifts.
02
Operational Risk Examples
Includes system failures and human errors affecting day-to-day operations.
