In the course of its activities, any business entity may face certain risks. Risk is the likelihood of an unfavorable situation occurring in some activity. At the same time, production risks are classified into separate groups according to their characteristic features.
Risk can be characterized as an economic category that manifests itself in the course of the economic activity of an enterprise. The likelihood of its occurrence depends on subjective and objective factors. The level of risk may vary from organization to organization. Everything directly depends on the stability of the production organization.
Classification by the type of hazard and areas of manifestation
Depending on the type of hazard, industrial risks can be subdivided into man-made, mixed and natural. Technogenic risks are closely related to human economic activities. But natural risks do not depend on humans at all. These include natural disasters.
Production risks can manifest themselves in a variety of areas of activity. Usually, political risks can arise from unfavorable changes in the political sphere of activity. Social risks are often associated with manifestations of social crises. As for environmental risks, their appearance is due to the civil liability for causing harm to the environment. Commercial risks associated with the economic activities of enterprises are especially common. Well, professional risks directly relate to the professional capabilities of everyone.
Other risk classifications
Production risks are predictable and unpredictable. True, the predictability of risks in such a situation is relative. Not a single economic expert will be able to give a 100% forecast. Unpredictable risks include some kind of force majeure or tax risks. Also, insured and non-insured risks are distinguished. Accordingly, the insured risks can be transferred to the insurance company if necessary.
Depending on the sources of occurrence, the risks can be external or internal. Everything is extremely simple here. External risks do not depend on the activities of a particular enterprise. And internal risks are usually associated with unskilled enterprise management. There are acceptable, critical and catastrophic risks. So they are classified according to the amount of damage caused. Permanent risks are usually closely related to some kind of permanent factors. And temporary ones appear only at certain stages of financial transactions.
