Risk Management

Topics: Credit risk, Risk, Investment Pages: 3 (928 words) Published: June 18, 2013
RISK IN VARIOUS FORMS FACE ALL KINDS OF BUSSINESS AND THEYCOME FROM VARIETY OF FACTORS. SOME FACTORS ARE CONTRLLABLE OTHERS ARE NOT CONTROLLABLE. USING EXAMPLES NAME AND DISCUSS TWO FACTORS FROM EACH CONTROLLABLE AND NON CONTROLLABLE FACTORS THAT COULD POSSSIBLY RESULT INTO RISK RISK

Risk is often mapped to the probability of some event which is seen as undesirable. Usually the probability of that event and some assessment of its expected harm must be combined into a believable scenario (an outcome) which combines the set of risk, regret and reward probabilities into an expected value for that outcome. Every business organization contains various risk elements while doing the business. Business risks implies uncertainty in profits or danger of loss and the events that could pose a risk due to some unforeseen events in future, which causes business to fail.[1][2][3] For example, an owner of a business may face different risks like in production, risks due to irregular supply of raw materials, machinery breakdown, labor unrest, etc. In marketing, risks may arise due to different market price fluctuations, changing trends and fashions ,error in sales forecasting, etc. In addition, there may be loss of assets of the firm due to fire, flood, earthquakes, riots or war and political unrest which may cause unwanted interruptions in the business operations. Thus business risks may take place in different forms depending upon the nature and size of the business.

CONTROLLABLE RISK FACTORS
Controllable risks are those which you can do something about. These would include currency exchange risks, addressing skills issues, poor cash flow (i.e. Lack thereof), lawsuits, physical security devices such as locks, maintaining good lighting, maintaining safe landscaping design, poor management, failure for the debtor to pay in time. The chances of loss from various factors that can be reduced or avoided altogether. An astute business manager might take steps to identify most...
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