RSM100Y1 Chapter Notes -Vehicle Insurance, Employee Benefits, Lightning
Document Summary
Risks can be divided into: speculative risk. Gives the firm or individual the chance of profit or a loss (i. e. business expanding to new market can succeed or fail): pure risk. Involves only the chance of loss (i. e. motorists always face the risk of an accident and an accident can result in financial and physical losses but no accident does not provide profit). Risk management: calculations and actions a firm takes to recognize and deal with real or potential risks to its survival. Executives must consider many factors when evaluating risks, such as: a nation"s economic stability, social and cultural factors (i. e. language, available technologies, distribution systems, government regulations. Businesses have four alternatives in handling risk: avoid it. I. e. a manufacturer can locate a new production facility away from an area that is at risk of hurricanes or tornadoes: minimize it. Managers can minimize risk by removing hazards or by taking preventive measures.
