Question

Explain two different profitable strategies that would demonstrate the core principle 'risk requires compensation':

Answer 1

Business see risk management as a central part of their business strategy. Risk management is proactive and helps you identify potential events that could impact your business.
 
Cost reduction
Risks can also lead to unforeseen costs. Often times, they bring with them the need to pay staff overtime or learn expensive problem-solving skills quickly.
• protect reputation: -
At Risk Decisions, we use it to determine the scope of software versions. This improves the trust we have internally between the software development and business development teams. It also informs how we manage the expectations of our customers, thus increasing their confidence in our promises and in our company.
• Improved efficiency: -
Unprepared for risks, your best employees can get involved in these reactive firefighting issues, distracting them from their core business goals. For example, if a product is delivered late to a customer, their account managers will go to great lengths to resolve the crisis to protect their reputation, rather than building their reach to the customer for more new business deals