The field of risk management has received a great deal of attention lately and many business scholars have written extensively about what constitutes a reasonable versus unreasonable risk for businesses of all sizes. In the course of business, there are always tough decisions to make, especially when one wishes to maintain a state of positive leadership.
While there is a wide amount of variance in opinion and little or no consensus about this and other aspects of the field of risk management, after taking several courses at the MBA level and applying my education in this area to my own business, I can attest to the fact that choosing the high-risk option is almost always better for your business. I know that some people will balk at this as it sounds, well, risky, but hear me out…
Some high-risk options can be better choices that low-risk options for several reasons and under many different circumstances. One reason why this might be the case is if a high-risk endeavor is such because the market exists but there are no other individuals or companies willing to take a risk. As a result, the company that decides to take on the high-risk situation could stand to have the entire market share for the project since it was one of the few to brave the difficult or harsh situation that made it a high risk to begin with.
Aside from this, choosing a high-risk option could also be a better choice because low-risk options often tend to have more competition. Many companies and individuals are more willing to invest time and effort into an easier and better risk and thus by entering into this it is like entering into a pool of others doing exactly the same thing. This is not always the case but, for example, if there is a need for a particular kind of store in an area and many others set up a business to accommodate an ever-growing and endless stream of consumers it is likely that one will not have the greatest share of that local market.
In other words, high-risk options can be most beneficial and a much better than low-risk options in situations that determine and are based on the amount of competition. If risk mitigation measures are put into place and the high risk is still a feasible option with a chance of success, a company or individual stands to create a new niche or have the large share since it was the one that decided to take a risk that no one else would.
Related Articles
Managerial Decision Making and Right vs. Right Dilemmas: An Assessment
A Cultural Approach to Doing Business in India, Japan, and Germany
Zoning Laws and the Home Business
Inexpensive Ways to Recognize and Motivate Employees
