What are the risk bearing economies?
What are the risk bearing economies?
Glossary -> R. The ability of large firms to spread risks over a large number of investors. This can result in the diversification of location- or production plant-specific risks-thus reducing the effective risk facing investors.
Who benefits from risk bearing economic?
Risk bearing economies are often derived by large firms who can bear business risks more effectively than smaller firms. For example, a large record company can more easily bear the risk of a ‘flop’ than a smaller record label.
What is risk bearing in marketing?
Risk bearing in marketing means the financial risk invested in the ownership of goods held for an anticipated demand, including the possible losses because of fall in prices and the losses from spoilage, depreciation, obsolescence, fire and floods or any other loss that may occur with the passage of time.
What are economies and diseconomies?
Economies and Diseconomies of Scale. Economies of scale refer to these reduced costs per unit arising due to an increase in the total output. Diseconomies of scale, on the other hand, occur when the output increases to such a great extent that the cost per unit starts increasing.
What is the meaning of a risk culture?
Risk Culture denotes the combined set of Corporate Values, norms, attitudes, competencies and behavior related to risk awareness (perception of risk) and risk taking (active business decisions) that determine a firm’s commitment to and style of Risk Management.
What is the meaning of risk bearing?
Risk bearing refers to having or sharing responsibility for accepting the losses if projects go wrong. Most economic activities are capable of resulting in losses under some circumstances, however good the expected results may be. Somebody has to bear the risk of meeting any losses.
What is meant by risk bearing economies of scale?
Risk-bearing economies of scale is the ability of large firms to spread the costs of uncertainty over a wider range of activities and therefore reduce their unit cost. Source : http://business-tes.wikispaces.com/file/view/Glossary.doc
What is a culture conducive to effective risk management?
A culture that is conducive to effective risk management encourages open and upward communication, sharing of knowledge and best practices, continuous process improvement and a strong commitment to ethical and responsible business behavior.
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