Business Risks and Social Responsibility

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Questions and Answers

Which risk can a business typically manage through insurance?

Changes in government policies
Market recession
Damage to goods/property (correct)
Changes in fashion and customer preferences

What is a significant way a business can minimize non-insurable risks?

Market forecasting techniques
Implementing comprehensive insurance policies
Engaging in proper planning and preparedness (correct)
Developing new market trends

How do modern businesses generally view their social responsibility?

As an obligation to their stakeholders (correct)
As a legal requirement only
As a marketing strategy for increasing sales
As a secondary concern after profit maximization

Which of the following best represents a societal interest for modern businesses?

<p>Balancing profits with consumer satisfaction and public interest (C)</p> Signup and view all the answers

What is one responsibility businesses have toward their employees?

<p>Offering competitive wages and good working conditions (A)</p> Signup and view all the answers

Flashcards

Business risks

Potential problems or uncertainties impacting a company's operations and profitability.

Insurable risks

Risks that can be covered by insurance, e.g., fire or theft.

Non-insurable risks

Risks that cannot be covered by insurance, e.g., fashion trends, economic downturns.

Social responsibility (Business)

A company's duties to society, aiming to improve customers' and society's well-being.

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Stakeholders

Individuals or groups affected by a company's actions, including employees, customers, government, and shareholders.

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Study Notes

Risks and Uncertainties

Businesses face risks and uncertainties.
Risks can lead to losses.
Examples of risk events include:
- Market recession
- Changes in customer preferences
- Changes in government policies
- Changes in technology
- Damage to property (fire, natural disasters)
- Civil unrest
Insurance can mitigate some risks (e.g., fire, theft)
Non-insurable risks can be mitigated through planning and preparedness.

Societal Interest

Modern businesses prioritize societal well-being.
Businesses strive to balance profits, customer satisfaction, and public interest.
Businesses are increasingly producing eco-friendly products.

Modern businesses are conscious of their social responsibility
Businesses attempt to meet their responsibilities to various stakeholders:
- Employees (fair wages, good working conditions, welfare benefits)
- Customers (quality products at reasonable prices)
- Government (paying taxes and duties)
- Shareholders (maximizing wealth)

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Description

This quiz explores the critical risks and uncertainties facing modern businesses and their responses to them. Additionally, it examines how businesses prioritize societal well-being and their commitment to social responsibility towards stakeholders. Test your knowledge on these important aspects of contemporary business practices.