To start, it seems that everyone today is including the word risk in almost every discussion that involves business. It is quoted regarding virtually all actions taken by an organization in terms of business, organizational, and social risk. When discussed, it seems risk is described as an evil to be avoided at all costs. Unfortunately this misconception has led to some strong misunderstandings about risk in both its definition and its unavoidable existence. If the ultimate goal is to make a profit, then risk cannot be avoided. Surely, just being in business is associated with some degree of risk. In fact, if the goal is to make a profit, then risk should not be avoided in many cases, only managed properly.
Many experts have long believed that the greater the risk, the greater the return or profit. It then follows that the organization that deals most effectively with the highest level of risk will reap the highest level of profit. The answer then is not to attempt to avoid or do away with risk, but to identify, minimize, and manage it at all levels to the optimum degree for that organization. When this is accomplished, risk is no longer an ominous specter, but rather just another aspect of business that can be dealt with effectively.