Entrepreneurship manages risk by first establishing the context which is to determining the scope of the risk management such as basis, identification and analysis of risks. The next step is to identify possible risks. Then risks are assessed according to its severity and possible occurrence. Once risks are identified and assessed, treating risks then follows. There are four ways to treat risks: risk avoidance, risk transfer, risk reduction and risk acceptance.
Avoiding risk is when the company opts to avoid going into situations that create risks for them such as buying a property that has problems. Risk transfer is when transferring the risk to another party such as insurance firms. Risk reduction is reducing the extent of the risks such as putting fire extinguishers to minimize risk of loss during fire. Risk acceptance is accepting the risks of loss such as in fortuitous events.
Making Ethics-based Decisions
Entrepreneurship makes ethics-based decision by treating everybody with respect - customers, employees, suppliers. Another way businesses make ethics-based decision is by being responsible. This is reflected by meeting deadlines, performing the assigned tasks well and coming up to expectations. Another business ethic to observe is attaining results through carefully weighed means.
Operating in a Global Environment
Entrepreneurship operates in a global environment by being flexible and knowing its market. It is easy to assume that what works in one works with another. Unfortunately, this is not the case in the international scene. A lot of businesses make the same mistake of adopting same policies at home in promoting their products in another country.
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