In: Finance
What is the significance and importance of sound business decision-making in risk and risk management in business?
Decision making- It is a process of choosing best alternative by evaluating and analyzing the advantages and disadvantages of all the available alternatives.
Risk- It is the uncertainty of occurrence of any event.
Risk management- It studies the strategies of managing and mitigating the risk.
Significance and importance of sound business decision-making in risk and risk management in business- Decision making is a crucial part of a business. Key people of companies have to take many decisions regarding, budget, funding, investment, operations, recruitment and selection of a project. All decision require thorough and in-depth analysis.
Decision making goes through these steps:
A sound decision making reduces the risk of failure of the project or investment alternative. When decision is taken by taking into consideration the above steps, it is always a good decision that reduces risk for business. Business is able to manage its risk in several areas with the help of proper planning and decision making.