Business and Financial Risks

Name: Business and Financial Risks
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Author: Leo Campbell

An assignment discussing various business and financial risks, including risk management strategies.

Leo Campbell

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Business and Financial Risks 1
Running Head: Business and Financial Risks
Business and Financial Risks
Your paper on Business and Financial Risks provides a comprehensive overview of the various
risks businesses face, including operational, strategic, innovation, employee, compliance,
environmental, technological, health and safety, political, and financial risks. It also explores
how organizations measure these risks to assess their impact on business operations and
profitability.

Business and Financial Risks 2
Business Risks
In the present competitive business environment, the possibility of risks is normal, and in
most of the situation, its effect creates an adverse environment for business, such as huge profits
or losses in the business, bankruptcy, and others. Therefore, business risk is a term that basically
refers to the possibility of inadequate profits or even losses in case of uncertainties (Spedding &
Rose, 2008). There are several examples that can be considered as business risks, such as
changes in tastes, strikes, preferences of consumers, change in government policy, increased
competition and obsolesce or change etc.
It is considered that every business organization generally holds various risk elements
when they do the business in domestic or global market. At the same time, business risk implies
uncertainty not only in profits, but also in the danger of loss and the events that could pose a risk
because of some unforeseen events in the future that causes businesses to fail forever.
Additionally, business risks in the present competitive environment are classified based on the
influence by two major risks, such as internal business risks and external business risks
(Spedding & Rose, 2008). The internal risks basically arise from the events taking place within
the organization and external risks arise from 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 the
working process. This is basically the part of the manufacturing operation and administrative
procedures. When the organizational procedures seen as disorganized or inaccurate record
keeping, and outdated or faulty IT systems, as well as interruptions in the supply chain, these
entire activities creates operational risks (Tattam, 2012). In case of these types of highly

Business and Financial Risks 3
operational risks in the organization, the unreliable environment of the customers and potentially
lose all data can be a possibility.
Strategic Risks: The strategic risks of the business can be seen as an inability to achieve
goals or objectives of the organization. Whenever any business plan does not meet the decided
aim and objectives according to the outlined in the business plan; the strategic risk happens
adversely and destroy the hope of the company. Basically, it is considered that the strategic risks
come out due to the effects of changes in customer demand or technological evolutions that pose
threats to the business (Andersen, 2006). When the customers view the products and services as
overprices, 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 risks
because of the threats about stealing the Intellectual Property Rights, and Patents, as well as
Copyright of the products. Further, the other risk that can be possible in the business is the
innovative products of the competitors that try to be one step ahead in the competitive market
(Lam, 2014). Moreover, the innovation in the form of marketing and promotional initiatives in
the marketing plan, as well as staff training and embracing new technology are also the
innovative risk in the business scenarios. The innovative risks can be possible due to a lack of
development. Therefore, it can pose a serious risk to a business progressing or growing in the
competitive market.
Employee Risks: It is a true fact that employees are vital for business success, but there
are risks associated with the employees in the business, such as more absents of the employees.
Further, the other risks in the business are illness of key staff and unable to work by the
employees in the office in case of an important work or extended time or an industry strike
action (Lam, 2014).

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Business and Financial Risks

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