Revista Tinerilor Economiºti (The Young Economists Journal)

RISK MANAGEMENT IN BUSINESS
Management – Marketing - Tourism
Assist. Corina Ducu Ph. D Student
Constantin Brâncoveanu University of Piteşti
Faculty of Management Marketing in Economical
Affairs Piteşti, Romania
Assist. Mihaela Mărăcine Ph. D Student
Constantin Brâncoveanu University of Piteşti
Faculty of Management Marketing in Economical
Affairs Piteşti, Romania
Abstract: The business environment is more competitive than ever and it
is characterized by risk, uncertainty, speed and volatility. The concept of
risk in business is inextricably linked to the concept of profitability and
flexibility. The result of the company (profit or loss) is influenced by
unexpected events that accompany its activity.
JEL classification: M0, M1,M10
Key words: risk, risk environment, risk in business, risk management, types of risk.
1. Introduction
Risk in business equals the variability of the result, thus affecting the
profitability of assets and consequently the return on the invested capital. This
variability can be better mastered, as the company possesses a higher degree of
flexibility. The risks of the economic activity mainly result from the company’s
inability to continually adjust its cost (by reducing it) and to adapt to the economic
environment. Risk in business can be approached either in terms of the internal activity
of the company or in terms of the external environment in which it evolves. Risk is a
measure of the adverse effect of a situation. It refers to the establishment and
communication of the potential dangers associated with a particular process in relation
to the guarantees and benefits it offers. 27
The business environment has experienced a rapid and revolutionary change
with consequences that reach organizations worldwide. In the last half century due to
increased trade and investment flows we speak more and more about globalization.
When the market economy becomes more and more complex and globalized, the
reliability of the accounting and financial information acquires critical importance in
the correct perception and domination of the economic flows by companies,
shareholders, directors, employees and creditors.
Management responses to global competition have included quality
improvement and initiatives of risk management, reorganization of structures and
processes, as well as greater accountability. But all these need more time, reliability and
relevant information for the decision-making process.
27
Regester Michael, Larkin Judy – Managementul crizelor şi al situaţiilor de risc (Crises and
risk situations management), Ed. Comunicare.ro, Bucureşti, 2003, p. 28-29
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