Tag: risk management

Want to know about Business Risk?

Business risk is defined as the possibility of occurrence of any unfavorable event that has the potential to minimize gains and maximize loss of a business. In simple words, business risks are those factors that increase the chances of losses in a business and reduce opportunities of profit.

Characteristics of Business Risk

1. Business risk arises due to uncertainties. Uncertainty is when it is not known what is going to happen in future. Examples of uncertainties that affect a business are change in government policy, change in demand, change in technology, etc.

2. Risk is an essential part of the business. Risk involved plays a crucial role in business operations. The risk involved in can be reduced to some extent but it cannot be completely eliminated.

3. Every business has risk which varies in severity based on the type of business. For example a large Corporation or business will carry more risk as compared to small scale businesses.

4. Businesses take risk with the motive or expectation of earning profit because it is considered more the risk higher is the amount of profits from operations.

The art of predicting business risks: Why non-experts do it better | Fortune

Causes of Business Risk

 1. Natural Causes:- Natural causes are the causes those which arise due to interference of nature. Humans and businesses do not have a control over the natural causes. These include natural calamities like earthquake, tsunami, tornado, famine, floods and drought, etc. Humans and businesses do not have a control over the natural causes

2. Human Causes:- The human causes of business risk arise due to the loss of business that arises from changes in customer preferences, employee mindset, agitation by workers, negligence by employees, strikes and lockouts.

3. Economic Causes:- Economic causes of business risk arise from changes in the different economic factors such as increasing competition, changing market conditions, increase in price of raw materials, production cost.

Three types of competition and how to tackle control them with examples

Human Resources: Risk Management and Worker Protection

A large part of working in human resources (HR) is managing employee risk. It is HR’s job to keep employees safe and make sure the company isn’t liable for any employee injuries. Unfortunately, we live in an imperfect world so it is impossible to completely remove all risk, but HR’s goal is to minimize risk as much as possible and act swiftly when accidents do happen. While managing risk is a lot of preventative work, you also need communication skills to explain accidents to employees/superiors when they arise. When you think of worker safety many people believe that this is only representative of jobs that require manual labor. However, every type of office has to consider their employees’ safety. For example, carpal tunnel syndrome (a syndrome in which you lose sensation in your hands/fingers and is caused by long periods of typing) currently affects between 4 and 10 million Americans a year (Rheumatology.org). All different types of work environments require HR to manage risk and make sure that employees are protected.

The first step in identifying risk management is to identify the hazard. Some common hazards include wet floors, falls from heights, or dangerous equipment. Once your risks are identified, you must evaluate and decide how to prevent the risk from becoming an accident. In order to evaluate which risks are to be prioritized you should rank the risks on a scale of 1-5 based on the likelihood of an accident happening, and severity of the accident. Next, make sure to use what you learned from the first two steps to control the problem from recurring. Finally, make sure to review your assessment of the problem in order to see if there’s any way you can improve upon it next time.

Making the workplace safer is an essential part of keeping employees happy and productive. If employees feel unsafe, they are less likely to be productive. HR bears this responsibility, and it should not be taken lightly. When HR departments ignore workplace risks, it is very evident and has a direct effect on everyone involved. When HR departments focus on maintaining a safe work environment, they tend to be much more respected by their coworkers and respected by their superiors. Overall, if you follow the formula for solving risk’s, your employees will feel much better coming into work every day.