Lesson 1, Topic 1
In Progress

1.4 Analyse a range of risks associated with a new venture.

ryanrori December 22, 2020

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The concept of risk management is explained with examples

Definitions

Risk: The danger of loss or damage .

“The presence of uncertainty, where there may be uncertainty as to the outcome of the eventproducing a loss, and uncertainty as regards the outcomeof the event; where the degree of risk is interpreted with reference to the degree of variability and not with reference to the frequency with which the event will occur or to the probability that it will display a certain outcome.”

       Valsamakis et al.: The Theory and Principles of Risk Management

Business risk: Those risks that the owner of a business should be able to define and predict. The danger of loss or damage to a business concept, its stock or its market through actions, omissions or changes.

Environmental risks: Those risks that the owner of a business cannot, as a rule, have control over. The danger of loss or damage to a business concept, its stock or its market resulting from natural disasters, economic policy such as sanction, drought, etc.

Quantifiable risk: Those risks of which the result can be measured in financial terms (also called “Insurable risk”).

Unquantifiable risk: Those risks of which the result can not be measured in financial terms (also called “Uninsurable risk”).

Risk management: “A managerial function aimed at protecting the organisation against the consequences (adverse) of pure risk, more particularly aimed at reducing the severity and variability of risks.”

          Andrew Pike “People Risks”