itb chap 14
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Introduction to Business© Thomson South-Western
ChapterChapterChapterChapter
Risk Management
14-114-1 Overview of Risk Management
14-214-2 Insurable Risks
14-314-3 Uninsurable Risks
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Chapter 14
Slide 2Introduction to Business
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LESSON 14-1
Overview of Risk Management
Goals Identify the types of risks facing
businesses. Describe ways that businesses can
deal with risks.
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Slide 3Introduction to Business
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Key Terms
risk economic risk personal risk property risk
liability risk pure risk controllable risk insurance
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Slide 4Introduction to Business
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IDENTIFYING RISKS
Types of risks Economic and non-economic risks Pure and speculative risks Controllable and uncontrollable risks Insurable and uninsurable risks
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>> C H E C K P O I N T
What is a risk?
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DEALING WITH RISKS
Avoid the risk Transfer the risk Insure the risk Assume the risk
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POSSIBLE WAYS TO DEAL WITH RISK
Method Activity
Avoid Choose not to complete the risky activity
Transfer Find another business to complete the activity
Insure Purchase insurance to pay for any losses
Assume Complete the activity with full responsibility
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Slide 8Introduction to Business
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>> C H E C K P O I N T
Identify four ways that business can deal with risks.
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Slide 9Introduction to Business
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LESSON 14-2
Insurable Risks
Goals Recognize important insurance
concepts. Describe several types of business
insurance.
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Slide 10Introduction to Business
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Key Terms
insurers insured policyholder insurance policy premium claim
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PURCHASING INSURANCE
Insurance basics Insurance companies Insured losses
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>> C H E C K P O I N T
What information should be considered when selecting an insurance company?
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Slide 13Introduction to Business
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BUSINESS INSURANCE
Insuring personnel Health insurance
Disability insurance
Life insurance
Insuring property
Insuring business operations
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Slide 14Introduction to Business
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>> C H E C K P O I N T
What are the three major areas that can be covered by business insurance?
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Slide 15Introduction to Business
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LESSON 14-3
Uninsurable Risks
Goals Describe why some business risks are
uninsurable. List the strategies a company can use
to reduce the risks of doing business internationally.
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Slide 16Introduction to Business
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Key Terms
property rights counterfeiting
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Slide 17Introduction to Business
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IDENTIFYING RISKS
Types of uninsurable risks Economic conditions Consumer demand Competitors’ actions Technology changes Local factors Business operations
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Slide 18Introduction to Business
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MANAGING RISKS
Inform everyone in the business of the types of risks that are particularly important to their part of the operations
Implement measures to gather information and spot possible problems
Inspect facilities and equipment Be active in local communities Build relationships with government officials
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>> C H E C K P O I N T
What are several things businesses can do to manage risks?
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Slide 20Introduction to Business
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RISKS IN INTERNATIONAL BUSINESS Strategies for reducing risk International property rights
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Slide 21Introduction to Business
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>> C H E C K P O I N T
Why do U.S. companies have difficulty enforcing intellectual property rights in some international markets?