Business Risk

From Open Risk Manual

Definition

Business Risk denotes a broad category of risk types facing an organization that emanate from its pursuit of business objectives but which are not explicitly linked to specific contracts the organisation is involved in. The risk that internal and external factors, such as inability to provide a service or product, or a fall in demand for an organization's products or services will result in an unexpected loss.

There is a wide variety of such risk types, leading to a number of subcategories, for example

  • Franchise Risk and other risks associated with the quality, vision and positioning of the organisations Business Model and its management (including reputation)
  • various Operational Risk types
  • externalities the firm may be generating through its operations etc.


The complementary broad category of Contractual Risks covers risk types that are more sharply defined in connection with actual contracts the organization enters into.

Risk Taxonomy

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