BUSINESS RISK

-

BUSINESS RISK

 

Risk may be defined as the possibility of loss. It is considered as one of the inherent features of business. It means that, if there is no risk no business at all. As far as business is concerned, its unpredictable and uncertain future is the basis of this risk. Insurance is one of the practical and acceptable method to face this risk.

Risk may occur due to various reasons. It may happen when customer attitude changes. Risk may also happen due to changes in technology. When a mobile hand set with advanced features is launched in the market, others may find it very difficult to sell their hand sets. The loss or risk may also happen due to natural calamities such as earth quakes, tsunami, storm etc.

Causes of Risk  

Risk is always unforeseen and unpredictable. It may happen due to following reasons:

Natural Events

Business risk may happen due to natural calamities such as flood, drought, earth quake, storm, tsunami etc. The events are uncontrollable and unpredictable and makes huge loss to business and community.

Man-made events

Human beings are also creating some losses and problems to business. Strike, theft, riot etc. are examples. Some losses may occur due to negligence, carelessness and accidents. Business is supposed to bear all these losses irrespective of its cause.

Changes in Economy

Economic conditions of a business environment may change due to changes in consumer attitudes and tastes, technological developments, competition, inflation etc. Modern business environment is undergoing fast changes and some of these may turn into business risk to some units.

Changes in Government Policy

Legal and political environment of a business may create some risks to business. Changes in policy (monetary policy, industrial policy, fiscal policy) of government directly affect business. EXIM policy and international relations of the nation may also affect business. Stability of government, fluctuation in foreign exchange rates etc. also affect business performances.

 


Comments

Post a Comment

Popular posts from this blog

FEATURES AND CHARACTERISTICS OF HOSPITALITY INDUSTRY

-
FEATURES AND CHARACTERISTICS OF HOSPITALITY INDUSTRY     Hospitality is a service industry. Therefore, all the features and characteristics of service industry are seen in hospitality also. The characteristics such as intangibility, perishability and inseparability are the most common features seen in hospitality industry. Intangibility : Services offered by the hospitality industry are to be experienced. Here the services are performed with friendliness, care and sincerity. Such services are meant to satisfy the guests. These services are to be felt. Perishability : Service offered in hospitality industry should be enjoyed at that time itself, otherwise this particular service irreversibly vanishes as it was used by the service users. The service, if not accepted on time it will be lost. Inseparability : Production and consumption of service take place simultaneously and it cannot be separated from the provider or receiver. The service offered by the host cannot b...
Read more

BUSINESS ETHICS

-
BUSINESS ETHICS   Business being a social organ shall not be conducted in a way detrimental to the interests of the society and the business sector. The business as social establishment, should follow certain ethical values and rules. These can be called business ethics. The term ‘Business Ethics’ refers to the system of moral principles and rules of the conduct applied to business. It applies to all aspects of business conduct and is to be followed by all individuals and organizations in the business. However, there is no unanimity of opinion as to what constitutes business ethics. There are no separate ethics of business but every individual and organization in society should abide by certain moral orders.   Definitions of Business Ethics Business ethics can be defined as the systematic study of ethical matters pertaining to the business or related persons and their activities. “Business ethics is the systematic handling of values in business and industry.” —...
Read more

FOUR VIEWS ON CONSUMER DECISION MAKING AND CONSUMER DECISION MAKING MODELS

-
four views on consumer decision making and consumer decIsion making models Decision is the selection of an action from two or more choices. Generally, decision making is regarded as a cognitive process of selecting one from two or more alternative choices; because it is argued that we usually take decisions, after properly evaluating the situations and circumstances. However, there are four different arguments on this. This is known as Four Views on Consumer Decision Making . These are Economic view, Passive view, Cognitive View and Emotional View. The four views explain why individuals behave as they do. The views are also called as Models of consumer decision making. They are Economic Model, Passive Model, Cognitive Model and Emotional Model. Economic Model/ Economic View Economic model is a rational model. As per this view, consumers make decisions in a rational manner, after considering everything about the product. Here, the consumer, examines and evaluates the benef...
Read more