Q.State the causes of risks involved in business?
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Start your 14-day free trial to unlock the full solution →Business risks are caused by natural, human, economic and other (miscellaneous) factors.
Business risks arise from a variety of causes, classified as follows:
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Natural causes: Human beings have little control over natural calamities such as flood, earthquake, lightning, heavy rains and famine, which can cause loss of property and income.
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Human causes: Unexpected events arising from people — dishonesty, carelessness or negligence of employees, stoppage of work due to power failure, strikes, riots and management inefficiency.
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Economic causes: Uncertainties relating to demand for goods, competition, price, collection of dues from customers, and changes in technology or method of production. Financial problems — such as a rise in the interest rate on borrowings or the levy of higher taxes — also fall here, raising the unexpected cost of running the business. …
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