RISK BEARING AND MANAGEMENT IN ENTREPRENEURSHIP
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This document discusses risk bearing and management in entrepreneurship. It defines risk as the possibility of suffering loss or injury, and notes that entrepreneurs take calculated moderate risks. The document identifies several types of risks entrepreneurs may face, such as pure risk and speculative risk. It also lists factors that entrepreneurial risk taking depends on, such as the degree of dissatisfaction with the current situation and orientation towards challenges. Finally, the document outlines the key steps in risk management for entrepreneurs, including identifying risks, analyzing them, evaluating risks, treating high risks, and ongoing monitoring.
RISK BEARING AND MANAGEMENT IN ENTREPRENEURSHIP
- 1. “RISK BEARING AND MANAGEMENT IN ENTREPRENEURSHIP” PREPARED BY: ARUSHI ARORA J-12-AGRI-468 (3rd YEAR) SKUAST -JAMMU
- 2. “YOU CAN NEVER CROSS THE OCEAN UNTIL YOU HAVE THE COURAGE TO LOSE THE SIGHT OF THE SHORE”
- 3. RISK MEANS?? • Risk refers to the possibility or chance of meeting danger, suffering, loss, injury or exposure to adversity or danger • According to Frank Knight, “Risk is a measurable uncertainty” • According to Irving Fisher, “Risk may be defined as combination of hazards measured by probability.”
- 4. WHY TO TAKE THE RISK? • No entrepreneurial effort is possible without the element of risk • If an entrepreneur is not willing to take risk, the enterprise continues to be in the same situation. • Dissatisfaction with existing situation leads an individual to attempt changing it. To what extent the individual would go depends on his ability to take risk and cope with its outcome.
- 5. WHY RISKS ARE RISKY? Because outcomes are not known It is similar to treading an unknown path
- 6. ENTREPRENEURIAL RISK TAKING REFERS TO MODERATE CALCULATED RISK TAKEN BY AN ENTREPRENEUR
- 7. TYPES OF RISKS 1. Pure risk: produces only one outcome i.e. loss Property risk Personal risk Liability risk
- 8. 2. Speculative risk: may produce two outcomes either profit or loss. 3. Fundamental risk: are those which affect the society as a whole such as floods, earthquakes, draught, etc 4. Dynamic risk: are those which are the outcome of any change in the society.
- 9. ENTREPRENEURIAL RISK TAKING DEPENDS UPON: 1. The degree to which an individual is dissatisfied with the existing situation. 2. The needs and desire to change that situation in which there is dissatisfaction. 3. The readiness to accept potential loss in case entrepreneur loses. 4. The orientation towards accepting challenges in life. 5. The deposition towards a hope for success rather than a nudging fear of faliure.
- 10. FEATURES OF ENTREPRENEURIAL RISK BEHAVIOUR • Entrepreneurs do not take blind risks like gamblers • Entrepreneurs weigh the pros and cons associated with possible outcomes of risk task • Entrepreneurs take calculated and moderate risks that also offer some challenge and a sense of achievement on accomplishment of risk-laden task.
- 11. RISK MANAGEMENT • Step 1: Identify the Risk. , recognize and describe risks that might affect your project or its outcomes. • Step 2: Analyze the risk. Once risks are identified determine consequence of each risk. • Step 3: Evaluate or Rank the Risk. which can be done by determining the risk magnitude • Step 4: Treat the Risk. During this step you assess your highest ranked risks and set out a plan to treat or modify these risks to achieve acceptable risk levels • Step 5: Monitor and Review the risk. This is the step where you take your Project Risk Register and use it to monitor, track and review risks.
- 13. REFRENCES BOOK SOURCE • Kanwalpreet sachdeva,sonia sharma-FUNDAMENTALS OF ENTREPRENEURSHIP AND SMALL BUSINESS • Dr. B.S. Hansra, Dr. V.K. Bharti- HANDBOOK OF AGRICULTURAL EXTENSION AND COMMUNICATION INTERNET SOURCE • http://www.martinbauer.com/Articles/Risk-Management/Key-Steps-in- Risk-Management • https://www.theirm.org/about/risk-management/ • https://www.google.co.in/webhp?hl=en#safe=off&hl=en- IN&q=risk+taking+management • http://ultrapreneursayings.com/wp-content/uploads/2013/02/Become-a- risk-taker-not-a-risk-maker • https://www.theirm.org/qualifications/