Types of risks
Posted: Wed Jan 22, 2025 10:54 am
Economics as a science operates with several approaches to risk classification.
In the general system, which includes various classification options and considers all types of economic activity, risks are divided into groups according to several characteristics.
According to the area of occurrence or the nature of accounting, risks can be:
external, that is, originating from an environment outside the company’s position;
internal, arising within the company.
From the point of view of the decision-making level, the following risks are distinguished:
macroeconomic or global;
local or relevant to a particular business.
According to duration in time, risks are divided into:
short-term, such as transport-related threats;
constants, for example, the probability of non-payment.
According to the degree of legality, from the point of view of risk management, risk can be:
justified;
unjustified.
Based on the possibility of insurance, risks are divided into:
insured – these may be losses due business owner database can help to damage, destruction of goods during transportation, or breach of obligations by a subcontractor;
non-insurable or commercial.
Types of risks
According to the degree of impact, risks are:
acceptable or minimal, at which the amount of losses does not exceed the expected profit;
critical I and II degrees, that is, cases when expenses are equal to the expected profit or when investments in the production of goods do not pay off;
catastrophic - they are fraught with bankruptcy.
For objects that are affected:
risks of harm to the life and health of citizens;
property risks – this group is subject to insurance.
Depending on the nature of the consequences of exposure, there are risks:
pure, in which the company can only obtain a negative or zero result - this group includes natural, environmental, and transport threats;
speculative or capable of bringing losses or profits – we are talking about stock exchange risks in risk management.
In accordance with the types of losses that arise against the background of a threat, it is customary to talk about risks:
loss of time resources;
loss of financial resources.
The described approach to classification is used mainly abroad. When one of the two types of risk manifests itself, the second one also becomes relevant. This effect is explained by their interdependence.
From the point of view of how the probable negative and positive consequences are related, the following types of risk are distinguished:
acceptable, which corresponds to the balance between the expected benefit and the threat of loss;
unacceptable for business.
The risk management system described above is considered universal and convenient for describing various types of enterprises. Any of the listed criteria allows us to characterize threats that are identified by other approaches to classification.
Read also!
In the general system, which includes various classification options and considers all types of economic activity, risks are divided into groups according to several characteristics.
According to the area of occurrence or the nature of accounting, risks can be:
external, that is, originating from an environment outside the company’s position;
internal, arising within the company.
From the point of view of the decision-making level, the following risks are distinguished:
macroeconomic or global;
local or relevant to a particular business.
According to duration in time, risks are divided into:
short-term, such as transport-related threats;
constants, for example, the probability of non-payment.
According to the degree of legality, from the point of view of risk management, risk can be:
justified;
unjustified.
Based on the possibility of insurance, risks are divided into:
insured – these may be losses due business owner database can help to damage, destruction of goods during transportation, or breach of obligations by a subcontractor;
non-insurable or commercial.
Types of risks
According to the degree of impact, risks are:
acceptable or minimal, at which the amount of losses does not exceed the expected profit;
critical I and II degrees, that is, cases when expenses are equal to the expected profit or when investments in the production of goods do not pay off;
catastrophic - they are fraught with bankruptcy.
For objects that are affected:
risks of harm to the life and health of citizens;
property risks – this group is subject to insurance.
Depending on the nature of the consequences of exposure, there are risks:
pure, in which the company can only obtain a negative or zero result - this group includes natural, environmental, and transport threats;
speculative or capable of bringing losses or profits – we are talking about stock exchange risks in risk management.
In accordance with the types of losses that arise against the background of a threat, it is customary to talk about risks:
loss of time resources;
loss of financial resources.
The described approach to classification is used mainly abroad. When one of the two types of risk manifests itself, the second one also becomes relevant. This effect is explained by their interdependence.
From the point of view of how the probable negative and positive consequences are related, the following types of risk are distinguished:
acceptable, which corresponds to the balance between the expected benefit and the threat of loss;
unacceptable for business.
The risk management system described above is considered universal and convenient for describing various types of enterprises. Any of the listed criteria allows us to characterize threats that are identified by other approaches to classification.
Read also!