BS3 - Risk and Uncertainty
- Created by: 09eatonb
- Created on: 05-01-16 11:12
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- Risk-Taking / Entrepreneurs
- What is calculated risk? = The probability of a negative event occurring - risks are associated with the environment
- RISK = when we don't know what the outcome is, but we do know what the distribution of the outcomes.
- VS
- UNCERTAINTY = When we don't know what the outcome is, and we don't know what the distribution is.
- VS
- UNCERTAINTY = When we don't know what the outcome is, and we don't know what the distribution is.
- RISK = when we don't know what the outcome is, but we do know what the distribution of the outcomes.
- Quantifiable risk (Internal)
- Can be measured
- e.g. Loss of international sales due to increase in exchange rate
- What is calculated risk? = The probability of a negative event occurring - risks are associated with the environment
- RISK = when we don't know what the outcome is, but we do know what the distribution of the outcomes.
- VS
- VS
- RISK = when we don't know what the outcome is, but we do know what the distribution of the outcomes.
- Financial
- Oporational
- Strategic
- Compliance
- Strategic
- Oporational
- Can be measured
- Unquantifiable risk (External)
- Cannot be measured
- e.g. reputation of brand
- Unforeseen
- Totally unexpected
- Cannot be measured
- Entrepreneurs
- A person who sets up a business, taking a financial risk in hope to gain profit
- Characteristics of an entrepreneur...
- Determination
- Risk-Taker
- High levels of confidence
- Understands failure
- Highly Adaptable
- Characteristics of an entrepreneur...
- Examples of an Entrepreneur...
- Henry Ford
- Bill Gates
- Steve Jobs
- A person who sets up a business, taking a financial risk in hope to gain profit
- SYSTEMATIC RISKS = Risks associated with the environment
- VS
- SPECIFIC RISKS = risks associated with a specific product
- VS
- Risk-Management
- The IDENTIFICATION, ASSESSMENT and PRIORITISATION of risks followed by coordinated and economical application of resources to minimise, monitor and control the probability and/or the impact of unfortunate events.
- Methods od managing risks...
- Risk Assessments
- Careful Strategic Planning
- Contingency Plans
- Renewed human resource management policies
- Sound Financial Controls
- What is calculated risk? = The probability of a negative event occurring - risks are associated with the environment
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