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Business Risk Explained

        posted by , May 30, 2013

Risk is both bad and good at the same time.

Risk is the basis for all business results. A business that doesn't take any risks can't grow or adapt to change.

Despite its importance, risk is almost always a bad thing.

In other words, risk is a bad thing that shouldn't be minimized.

Definition of Business Risk

Business risk is the chance of losses and negative consequences that result from business strategy and operations.



Overview of Business Risk

Risks are strategies, investments, processes, procedures & systems that have some chance of failure. Risks lead to negative events that have business consequences.

business risk


Examples of Business Risks

Risk is inherit in any business activity. For example, a bank that makes a loan to a client risks default on the loan. A company the develops a new product risks failure of the product on the market. A government that constructs a bridge risks cost overruns or project failure.

more:65 Business Risks
22 Strategic Risks

Risk Management

Risk management is the practice of identifying, assessing, prioritizing and controlling risk.

Risks are identified and their probability and impact is assessed. Risks are then either accepted, reduced, eliminated or transferred.


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