BU353 Midterm: BU353 Midterm Notes
Document Summary
Hazard risks pose a threat to life, health, property or the environment. Underlying causes of losses are particular to a particular firm. Financial risks possible changes in output and input prices. Operational risks direct or indirect loss from inadequate or failed internal processes, people or systems. Strategic risks ability to achieve business strategy. The goal of risk management is not to eliminate risk, but to minimize the cost of risk. Cost of internal risk reduction diversification/investments in education. Cost of residual uncertainty effects on shareholders/stakeholders. Risk management is the process of planning, leading, organizing and controlling the organization"s activities to minimize the adverse effects of accidental and business loss on that organization at a reasonable cost. Risk management consultants: evaluate potential losses. Consider the range of possible outcomes and how they could occur. Determining whether or not a risk or set of risks is acceptable.
