Chapter #3 - Opportunities, Risk, Legal And Ethical Considerations Flashcards
What is the defenition of a reward?
Something given in recognition of the effort or return for something achieved.
What is the defenition of an opportiunity?
A time or event that makes it possible to do something.
What is the defenition fo a risk?
The chance of gaining or losing something as a result of an action taken.
What types of factors can create opportunities in an enerprise?
- Changing needs or wants for a product or service
e.g: - a change in income
- changes in taste or fashion
- changes in population
- changes in size or structure
- Developments in tech, making new product and services possible and others out-dated
- Changes in the ability to meet needs or wants, for example the failure of competition or access to equipment
- Chanages in government plicies including availbility of grants and subsides or changes in taxation and laws
Why is a risk-taking a key cherectaristic for a successfull entrepreneur?
Because without taking a risk you will never learn what could have been. If you make a mistake it is natural and you judt have to learn from it.
What are the risks involved with starting up a new enterprise?
- It is not certain a profit will be made
- Choosing wrong pricing or promoting strategy can result in loss of customers
- Having to many unexpected custumers can result in not having enough recourses and angery customers.
What are the types of risks you must manage?
- Financial risks
- Economic risks
- Health, safety and enviornmental risks
- Human recource risks
- Production risks
What are some examples of financial risks?
Having access to suffivient finance or what to do about unexpected costs.
What are some examples of economic risks?
What to do about changes in income, customer tastes or interests.
What are some examples of health, safety and enviornmental risks?
How laws and regulations affect what or how you operate.
What are some examples of human resource risks?
Having the right skills and number of people in the enterprise.
What re some examples of production risks?
access to the right materials, or what to do if a machine breaks down.
Why is it important to know what risks you have to manage?
To cplan properly, using the information to make decisions about what action to take (or not) about each risk. This means the enterprise has a better chance of achieving its objectives.
What are the stages of risk management?
- Identify the risks
- Analyse the implications of each risk
- Is the risk worth takin?
NO => Stop the project
YES => - PLan how to manage the risk
- Monitor and review
What is a PEST analysis?
It identifies important external factors that could have an impact on the enterprise. These are factors that affect the whole market and the enterprise has no control over them.
