Write. Therefore, many organisations struggle to get a handle on the human element in risk management. Operational (Human) risk Operational risks involve the day-to-day running of your organisation, from human error or inappropriate staff behaviour, to … This is strategic risk. For example, some 80 percent of thefts in the retail industry are carried out by staff. There are basically three causes of business risk: 1. Floods are a powerful force on our planet. which can damage the … Market risks refer to risks that originate from these group of people. Human causes are also very important causes of business risks. Test. Causes of Business Risk of a Company . In today's business environment, risk management dominates the business agenda of many small-business leaders. Start-a-Business 101 is a complete proven program that will take you step-by-step through your entire startup journey. Intellectual Property Risk. As such, business owners and operators should give serious thought to the potential people-related risks they face, then invest the time and money in setting up an appropriate process to deal with them, he says. Terrorism. Spell. In gaining this understanding, it is important to consider all functions within an organisation and take a holistic approach to people-related risk management. (iii) Economic causes: These include uncertainties relating to demand for goods, competition, price, collection of dues from customers, change of technology or method of production, etc. Although there is some risk attached to it, Roser says organisations need to reconsider the value an ageing workforce can add and redesign their work environment to cater to the changing population demographics. Natural causes of risk include flooding, earthquakes, cyclones, and other natural disasters that can lead to the loss of lives and property. Here are some types of market risk you should expect: One of the hardest risks to quantify and manage within any organisation is people. With no checks and balances in place, he says companies regularly leave themselves open. "Patchy is probably an accurate description," says Kirsty Roser, managing principal in the workforce strategies practice at Marsh. A lack of proper insurance boosts the risk to a business. The first step in doing this is understanding the different types of causes of business risk of a company. Some of these potential hazards can destroy a business, while others can cause serious damage that is costly and time-consuming to repair. Reputational risk: This is also a critical type of business risk. Your market consists of your customers, competitors, and suppliers. While health and safety management systems to manage OHS within most companies are relatively well advanced, Roser says people-related risk management tends to fare more poorly because organisations lack the expertise and skills required to deal with it. By hiring the person with the right skills, competencies, attitude and background, many companies could head off people risks at the pass. The risk may be that it takes on too much space, and the noted solution to this risk could be that it only uses half the space for the time being and does a temporary subleasing of the other half for a company that needs additional space for a limited time. "It's quite a significant challenge for businesses to change their thinking about the way they are structured in the future," she says. Since a good risk management plan must include all potential contingencies, human factors should also be included in that list of contingencies. They’re the engine that powers your business, but how do you stop them becoming the risk that puts you under? Operational Risk. "It amazes me how many times people appear in court for theft or misappropriation, and they've already had multiple convictions for the same offence," Murtha says. (iii) Economic Causes. The main reason behind all these activities is the failure of management. These causes bring heavy losses for the business. Natural Factors. They result in heavy loss of life, property and income in business. risks due to fire, theft, flood, earthquakes, cyclones, drought, war, civil riots etc. This is borne out by surveys that have found that up to 80 percent of retail theft in Australia is internal. Approach to people-related risk management dominates the business agenda of many small-business leaders over nature, therefore the loss to. 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