What are the main areas of risk facing a medium-sized developing Essay

What are the main areas of risk facing a medium-sized developing housing association explain what might influence its response to those risks and what a risk strategy might include - Essay Example Risk is often seen as possibility of an undesirable event. Under scenario analysis, risk is differentiated from threat. A threat is considered an event with very low probability but possessing serious harms. Analysts are often unable to allocate a probability to threat and for that there is no effective preventive measure is available. The only precautionary measure that can be taken to cope up with a threat is to reduce the set of definite risks before proceeding to an experiment, project, action or innovation. If any of the above-mentioned variables reduces to zero, then the overall approaches to risk will be zero. For instance, humans are extremely vulnerable to the threat that aliens might control their minds, which would have a severe effect. But since we have never seen aliens therefore, we can say that they might not pose such amount of threat so the overall risk reduces to almost zero. Every type of business possesses some level of risk. Many risk-averse people prefer not to do business, since it includes a large amount of risk i.e. a business might work, and a business might not work. So there are 50/50 chances that one will be successful in respective business. Every business has certain risks, some of which are foreseeable while others cannot be predicted and are therefore uncontrollable risks. Risk is an important component of small and medium sized business as well. Some common types of losses in SMEs include fire, theft, flood, injury, legal liability, disability, etc. Undoubtedly, every business entity requires vigorous risk assessment and management system but Small and Medium Sized Enterprises (SMEs) need to put even more attention to risk management since they may not have means and resources to control and manage risks due to several limitations and their varying size. However, this is not the case in large multinational corporations because organizations take special