Companies assume certain risks when undertaking their business activities in order to achieve their corporate objectives. Risks are events causing deviations from a target or value if they occur. This can be a positive deviation – in other words an opportunity – but also a negative impact – or a threat. Risks are nevertheless generally associated with having a negative impact. Three types of risk are distinguished between in terms of dangers:
- Strategic risks are the danger that a business model does not succeed on the market.
- Financial risks are financial losses due to a change in market prices, such as exchange rates, shares or raw materials, etc.
- Operational risks are the danger of losses and other damages resulting from inadequate or failed internal processes, and caused by persons or systems, or external events. A machine fire, for example, results in a two-week interruption to operations and causes lasting damage.