Business and Financial Risks

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Business and Financial Risks1Running Head:Business andFinancialRisksBusiness and Financial RisksYour paper onBusiness and Financial Risksprovides a comprehensive overview of the variousrisks businesses face, including operational, strategic, innovation, employee, compliance,environmental, technological, health and safety, political, and financial risks. It also exploreshow organizations measure these risks to assess their impact on business operations andprofitability.

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Business and Financial Risks2Business RisksIn the present competitive business environment, thepossibility of risks isnormal,and inmost of the situation, its effect createsanadverseenvironmentfor business, such ashuge profitsorlossesin the business, bankruptcy, and others. Therefore, business riskisatermthat basicallyrefers to the possibility of inadequate profits or even lossesin case ofuncertainties(Spedding &Rose, 2008).There are several examples that can be considered as business risks, such aschanges in tastes,strikes,preferences of consumers,change in government policy,increasedcompetitionand obsolesceor changeetc.It is considered thatevery business organizationgenerally holdsvarious risk elementswhen theydo the businessin domestic or globalmarket.At the same time, business risk impliesuncertaintynot onlyin profits, but also in thedanger of loss and the events that could pose a riskbecause ofsome unforeseen events inthefuture thatcauses businessesto fail forever.Additionally,business risks in the present competitive environment areclassifiedbased on theinfluence by two major risks, such as internal business risks and external business risks(Spedding & Rose, 2008). The internal risks basicallyarisefrom the events taking place withinthe organization and external risksarisefrom the events taking place outside the organization.Therefore, some business risks can be discussed as below.Operational Risks:In business, operational risk is the main risk that always arises in theworking process.This is basically the part ofthemanufacturingoperation and administrativeprocedures.When the organizational procedures seen asdisorganized or inaccurate recordkeeping,and outdated or faulty IT systems, as well asinterruptionsin thesupply chain, theseentire activities creates operational risks(Tattam, 2012).In case ofthese types ofhighly

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Business and Financial Risks3operational risks in the organization, the unreliable environmentof thecustomersandpotentiallylose alldata can beapossibility.Strategic Risks: The strategic risksofthe businesscan be seen asaninability to achievegoals or objectives of the organization.Whenever any business plan doesnot meet thedecidedaim and objectives according to theoutlinedinthebusiness plan; the strategic risk happensadversely and destroy the hope of the company.Basically, it is considered that the strategic riskscome outdue to the effects of changes in customer demand or technological evolutionsthatposethreats tothebusiness(Andersen, 2006).When the customers view the products and services asoverprices, or dull and outdated in the market; the strategic risks happen for the company.Innovation Risks:The innovation risk is also one of the main parts of the business risksbecause of the threats about stealing the Intellectual Property Rights, and Patents, as well asCopyright of the products.Further, the other risk that can be possible in the business is theinnovative products of thecompetitors that try to beone step aheadin the competitive market(Lam, 2014).Moreover, the innovation in theform of marketing and promotional initiativesinthe marketing plan,as well asstaff training and embracing new technologyare also theinnovative risk in the business scenarios.The innovative risks can be possible due toa lack ofdevelopment. Therefore, it canpose a serious risk to abusiness progressing or growing in thecompetitive market.Employee Risks:It is a true fact thatemployees are vitalforbusiness success,butthereare risks associated withtheemployeesin the business, such as more absents of the employees.Further,the other risks in the business are illness of key staffandunable to workby theemployeesin the officein case ofan importantworkor extended time or an industry strikeaction(Lam, 2014).

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