Professional Documents
Culture Documents
Opportunities, Risks, Legal and Ethical Decisions
Opportunities, Risks, Legal and Ethical Decisions
o Change in technology
o Financial risks
o Economic risks
o Production risks
o Stage 3: Is the risk worth taking – (if not worth, then stop the project)
o Stage 4: If worth taking the risk, then how to manage the risk
o If possible rewards outweigh the negative risks, then proceed with the project.
o If he is risk averse, he may discontinue or if he is a risk taker he will proceed with the project.
o Accept: If nothing can be done about the risk, then set aside a sum to cover up any negative
effects of risk
o Transfer: Pass on the risk to an outside agency who will be able to better manage the risk
o Eliminate: If you chose to avoid risk, you will have to give up on the positive impact of the risk.
o Spread the risk through diversification. It is the process of selling products or selling to different
markets.
Monitoring Risk –
Risks can change over time. Changes can happened due to internal and external factors that keep
changing. Therefore risks have to be constantly monitored.
Attitudes to Risk –
o One can be risk averse, which means he avoids risk most of the times, or all of the time.
o He can also choose to be risk keen, or always ready to take risks as he might believe that’s the
only way to grow his business.
o They can also be risk reducers, who take risks, but mitigate it enough to not harm their business
if anything goes sideways.
Legal obligations –
Ethical Considerations –
o Ethics: Moral values and principles that govern a person’s behavior or the conducting of an
activity.
o Being ethical involves actions and behavior that go beyond what is legally required
o An ethical firm considers the impact of its decisions on all the stakeholders
C. Can attract new employees and help retain the existing ones.
D. Suppliers will be willing to supply goods and offer discounts