Page 6 - RISK Management IC86 Ebook
P. 6
Risk Management
the risk. Probability is then assessed in combination with loss.
l In simple terms Risk can be expressed for a business as
uncertainty that will not allow the business targets to be
achieved and the degree of the effects on targets will depend
upon the degree of risk. This can also apply to any activity
like safely crossing the road, building a new factory,etc.
l But risk is not always loss causing and some risks may cause
both loss and gain (usually to different people as with the
extra work a repairer gets after a bad storm).
Types of Risks
l They may be physical, causing direct harm or damage, or
social, causing loss of reputation or damage to self esteem.
l Sometimes a risk is not conscious. New risk situations may
arise .from a combination of physical circumstances e.g. Use
of new materials, new type of machinery etc.
Associated risks also include
l Currency inconvertibility &/or Non-Transfer
l Political Violence/War
l Business Interruption & Contingent Business Interruption
l Non-honouring of Promissory notes, Letters of Credit or
sovereign guarantees,
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