Risk bearing in business organisation is a function of the
Answer Details
Risk bearing in a business organization is primarily a function of the entrepreneur.
Entrepreneurs are individuals who take on risks and uncertainties in order to initiate and manage a new business venture. They are the driving force behind the creation of a business and are responsible for making critical decisions that can significantly impact the success or failure of the organization.
Here's why entrepreneurs are the key risk bearers in business organizations:
1. Vision and Initiative: Entrepreneurs possess a unique ability to identify opportunities and envision new ventures. They take the initiative to pursue these opportunities, even when faced with inherent risks and uncertainties.
2. Financial Investment: Entrepreneurs typically invest their own money and resources in their business ideas. This financial commitment exposes them to the possibility of financial loss if their venture does not succeed as anticipated.
3. Uncertainty Management: Starting a new business involves numerous unknowns and uncertainties. Entrepreneurs must anticipate and manage these risks, such as market competition, changing customer preferences, and financial volatility.
4. Decision-making Authority: Entrepreneurs have ultimate decision-making authority within their organizations. They face the responsibility of making critical choices regarding product development, marketing strategies, resource allocation, and other business operations. These decisions carry inherent risks that can shape the success or failure of the organization.
While managers, employees, and customers may indirectly contribute to risk management within a business organization, it is the entrepreneur who bears the primary responsibility for identifying, assessing, and managing risks. Their vision, financial investment, ability to navigate uncertainty, and decision-making authority make them the key risk bearers within a business organization.