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Old 02-15-2010, 04:21 AM
shylock shylock is offline
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Default Business Risk

Hi

Business risks are of a diverse nature and arise due to innumerable factors. These risks may be broadly classified into two types, depending upon their place of origin.

* Internal Risks are those risks which arise from the events taking place within the business enterprise. Such risks arise during the ordinary course of a business. These risks can be forecasted and the probability of their occurrence can be determined. Hence, they can be controlled by the entrepreneur to an appreciable extent.

The various internal factors giving rise to such risks are:-

Human factors:- are an important cause of internal risks.They may result from strikes and lock-outs by trade unions; negligence and dishonesty of an employee; accidents or deaths in the industry;incompetence of the manager or other important people in the organisation,etc. Also, failure of suppliers to supply the materials or goods on time or default in payment by debtors may adversely affect the business enterprise.

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Old 02-22-2010, 04:12 AM
chris34 chris34 is offline
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Hi

A business risk is a circumstance or factor that may have a negative impact on the operation or profitability of a given company. Sometimes referred to as company risk, a business risk can be the result of internal conditions, as well as some external factors that may be evident in the wider business community.

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Old 04-17-2010, 07:01 AM
sliver12 sliver12 is offline
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Hi

Every business organisation involves some element of risk. Risk implies uncertainty of profits or danger of loss due to some unforeseen events in the future. An entrepreneur may encounter risks in every area or function of a business. For example:- in production, risks may arise due to irregular supply of raw materials, break down of machinery, labour unrest, etc; in marketing, risks may occur on account of price fluctuations,change in tastes and fashions, errors in sale forecasting, trade cycles, etc. In addition, there may be loss of assets of a firm due to fire, flood, earthquake, riots, war or political unrest which may cause unwanted interruptions in business operations. Thus, business risks may take place in a variety of forms. Though risks are universal,but all business enterprises do not face same type and degree of risks. They may vary according to the nature and size of a business.

These risks are inevitable in a business and cannot be eliminated completely but they can be controlled through proper preventive and corrective measures of risk management. The process of management of risk involves:-

* Identification of the risks
* Evaluation of the risks
* Choice of the right method for handling of risks
* Evaluating the aftermath of the chosen method

Hence, an entrepreneur can face the risks effectively by anticipating their nature and causes and adopting appropriate techniques in order to minimise their negative consequences.

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Old 04-26-2010, 05:55 AM
melody34 melody34 is offline
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Hi

Risk is viewed in many types.those are
a.systematic&unsystematic
b.controlled&uncontrolled
c.diversifiable and undiversifiable.
based on these broad categories risk can be divided for
the convenience in three heads.
1.environmental risk
2.process risk.
3.information for decision-making risk.

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Old 04-30-2010, 05:54 AM
avena34 avena34 is offline
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Hi

Uncertainties lie at the heart of business decision making in many different kinds of corporations. Should we take on a new product or business line? Will customers like the idea of using WAP-enabled phones to buy our products? Will the regulators allow us to take control of our biggest competitor? Should we distribute our products directly or trust an intermediary? Will ethical, regulatory or political changes blow a hole in one of our critical assumptions?

This kind of mission-critical question can rarely be answered with a definite "yes" or "no", so executives learn to base their decisions on shifting sands. But not all business uncertainties are created equal. Some destroy while others merely damage. Some can be avoided, reduced or transferred, while others must be recognised as an inevitable part of a business activity - and risk managed at an enterprise-wide level by diversifying lines of business, or setting aside reserves or risk capital.

Sorting out the most appropriate way to think about, communicate and treat these different sorts of business risk is a big problem in modern risk management - as the stakeholders of Equitable Life, the oldest UK life assurance society, know only too well.

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Old 07-07-2010, 10:43 AM
samy34 samy34 is offline
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Hi

A business risk is a circumstance or factor that may have a negative impact on the operation or profitability of a given company. Sometimes referred to as company risk, a business risk can be the result of internal conditions, as well as some external factors that may be evident in the wider business community.

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Old 07-11-2010, 08:51 AM
claudia123 claudia123 is offline
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This kind of mission-critical question can rarely be answered with a definite "yes" or "no", so executives learn to base their decisions on shifting sands. But not all business uncertainties are created equal. Some destroy while others merely damage. Some can be avoided, reduced or transferred, while others must be recognised as an inevitable part of a business activity - and risk managed at an enterprise-wide level by diversifying lines of business, or setting aside reserves or risk capital.

Sorting out the most appropriate way to think about, communicate and treat these different sorts of business risk is a big problem in modern risk management - as the stakeholders of Equitable Life, the oldest UK life assurance society, know only too well.
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Old 07-15-2010, 07:51 AM
cute34 cute34 is offline
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Hello

Thanks for sharing this nice information
Internal factors may also result in the development of significant business risk for the investor. Often, these are factors that can be identified and corrected. If flagging sales can be attributed to an ineffectual marketing effort or a sales force that is not performing up to expectations, making changes in the marketing approach or restructuring the sales effort will often result in minimizing the perception of business risk on the part of potential investors. The same is true if a company’s manufacturing facilities are not operating at optimum efficiency. Revamping the operational structure of the plants and facilities will decrease the element of business risk and result in higher profits at the same level of production and sales, which will in turn make the company more attractive to potential investors.

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Old 07-16-2010, 11:13 AM
james01 james01 is offline
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This kind of mission-critical question can rarely be answered with a definite "yes" or "no", so executives learn to base their decisions on shifting sands. But not all business uncertainties are created equal. Some destroy while others merely damage. Some can be avoided, reduced or transferred, while others must be recognised as an inevitable part of a business activity - and risk managed at an enterprise-wide level by diversifying lines of business, or setting aside reserves or risk capital.

Sorting out the most appropriate way to think about, communicate and treat these different sorts of business risk is a big problem in modern risk management - as the stakeholders of Equitable Life, the oldest UK life assurance society, know only too well.

The Equitable was obliged to close for new business in late 2000 after failing to manage the interest rate risk built into guarantees it offered certain of its customers. But, as the button below recounts, the calamity did not really arise from poor identification of market risk or asset/liability gaps. Instead, it arose from Equitable's business strategy and its vision of itself, which led to the institution side-lining rather than risk managing a key legal threat over an extended period of time.
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