itb chap 14
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Introduction to Business© Thomson South-Western
ChapterChapterChapterChapter
Risk Management
14-114-1 Overview of Risk Management
14-214-2 Insurable Risks
14-314-3 Uninsurable Risks
1414
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 2
LESSON 14-1
Overview of Risk Management
Goals Identify the types of risks facing
businesses. Describe ways that businesses can
deal with risks.
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 3
Key Terms
risk economic risk personal risk property risk
liability risk pure risk controllable risk insurance
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 4
IDENTIFYING RISKS
Types of risks Economic and non-economic risks Pure and speculative risks Controllable and uncontrollable risks Insurable and uninsurable risks
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 5
>> C H E C K P O I N T
What is a risk?
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 6
DEALING WITH RISKS
Avoid the risk Transfer the risk Insure the risk Assume the risk
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 7
POSSIBLE WAYS TO DEAL WITH RISK
Method Activity
Avoid Choose not to complete the risky activity
Transfer Find another business to complete the activity
Insure Purchase insurance to pay for any losses
Assume Complete the activity with full responsibility
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 8
>> C H E C K P O I N T
Identify four ways that business can deal with risks.
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 9
LESSON 14-2
Insurable Risks
Goals Recognize important insurance
concepts. Describe several types of business
insurance.
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 10
Key Terms
insurers insured policyholder insurance policy premium claim
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 11
PURCHASING INSURANCE
Insurance basics Insurance companies Insured losses
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 12
>> C H E C K P O I N T
What information should be considered when selecting an insurance company?
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 13
BUSINESS INSURANCE
Insuring personnel Health insurance
Disability insurance
Life insurance
Insuring property
Insuring business operations
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 14
>> C H E C K P O I N T
What are the three major areas that can be covered by business insurance?
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 15
LESSON 14-3
Uninsurable Risks
Goals Describe why some business risks are
uninsurable. List the strategies a company can use
to reduce the risks of doing business internationally.
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 16
Key Terms
property rights counterfeiting
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 17
IDENTIFYING RISKS
Types of uninsurable risks Economic conditions Consumer demand Competitors’ actions Technology changes Local factors Business operations
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 18
MANAGING RISKS
Inform everyone in the business of the types of risks that are particularly important to their part of the operations
Implement measures to gather information and spot possible problems
Inspect facilities and equipment Be active in local communities Build relationships with government officials
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 19
>> C H E C K P O I N T
What are several things businesses can do to manage risks?
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 20
RISKS IN INTERNATIONAL BUSINESS Strategies for reducing risk International property rights
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Introduction to Business© Thomson South-Western
Chapter 14
Slide 21
>> C H E C K P O I N T
Why do U.S. companies have difficulty enforcing intellectual property rights in some international markets?