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Introduction

What is Risk?

Risk is something that every business has to take to move forward.
Without risk there is no opportunity and the saying “You have to risk it, to get the biscuit!” holds very true to this day.
However, with most businesses taking some type of risk every single day, it needs to be asked what risk exactly is.
According to ISO 310000, risk is defined as the effect of uncertainty on specific objectives. 3
 
In the wider field of economics and in the business environment, the common understanding of risk is that the occurrence of a risk event always has a negative impact and therefore should be managed and avoided. 5
For more information on different risk Types please refer to our 'Risk categories' section.
Risk categories
 

Risk as a Butterfly

Risk itself can be seen as a butterfly: 4
image
  • There is usually one event that can be described as the occurrence of a Risk Event or Risk Incident
  • Before this single event, there are causes and prevention efforts
  • After this single event there are consequences and the impact of the event
  • The preparation for a Risk Event and its impact happen in the immediate fore- and aftermath of a Risk Event occurring
 

Risk Types

There are three types of risk:

Upside Risks

... help an organization to achieve its goals. 4

Downside Risks

... inhibit an organization on its way to achieve its goals. 4

Other Risks

... create uncertainty about the outcomes of an undertaking. 4

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Literature

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