Page 246 - RISK Management IC 86

Risk Management

bodies. Firms also run the risk of legal, social, political
and economic environment in which they operate.
Changing social norms can impinge upon a firm's
operations in many ways, for e.g, attitudes to work,
pilferage, wage differences etc.

Political changes can bring more government
intervention in the employment, marketing,
investment and other policies, and in the extreme may
lead to nationalization or the expropriation of the
property without compensation.

So we see, that
(i) the occurrences of some events may result in either

gain or loss whereas most causes only loss.
(ii) some events are the result of human behavior whereas

some are beyond the control of human beings.
(iii) In the cases caused as a result of human behavior,

sometimes the originator and the victim are the same
person.

Uncertainties fall under two broad categories. Those for
which the probability of occurrence is calculable either
on priori grounds or through statistical analysis of a series

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