Do not attribute the risk to uniquely negative phenomena and conditions. In some cases, it is quite useful and logical to achieve certain goals. Let's look at the risk functions and all that will help reveal the essence of this phenomenon.
Risk is ...
Before analyzing the risk functions, we define the meanings of this term:
- The combination of consequences and the likelihood of an adverse outcome.
- A situation with an uncertain outcome, as well as with the likelihood that the result may be unfavorable.
- Uncertain situation, which may result in both success and failure.
- The probability, under a certain set of circumstances, is to lose something without having a desire for it.
- The likelihood of a situation getting out of control.
- The product of loss and probability.
- The probability of obtaining a result other than expected.
Types of risk
Before talking about the functions of the risks of financial, social and others, it will not be superfluous to familiarize yourself with the types of this phenomenon:
- Objective - its consequences are easy to calculate.
- Subjective - it is not possible to evaluate the results of the risk.
- Financial - possible losses can be calculated in monetary terms.
- Non-financial - an unfavorable result cannot be evaluated in financial terms (for example, loss of health).
- Static - the consequences do not change from whether you take any action now or after some period of time.
- Dynamic - the consequences of risk may vary depending on the passage of time.
- Private - the consequences of the venture are local.
- Pure - the presence of only two scenarios - success or failure.
- Speculative - the successful completion of a risky enterprise depends on luck.
- Individual - the consequences concern only one person.
- Collective - adverse consequences can affect a certain collective, community, society.
- Potential territorial - the risk of adverse events in a particular area.
- Acceptable - the consequences of such a risk are calculated in advance and acceptable for the current situation.
- Professional - the risk associated with any professional activity.
- Nanorisk - the risk associated with projects, works in any way in contact with nanotechnology and nanomaterials.
Key risk functions
We list the functions that one way or another has a risk:
- Protective.
- Stimulating.
- Socio-economic.
- Compensating.
- Innovative.
- Analytical.
Together, these functions determine one thing - to what limits can be reached by stepping along the road of risk. We will analyze each of them in more detail.
Stimulating function
Another name is regulatory. This risk function manifests itself in two ways:
- Destructive . When implementing those projects that do not include research or justification of risk, their implementation will be considered voluntaristic, adventurous. The adoption of unweighted, unreasonable, unreasonable decisions leads to the development of qualities that do not properly characterize a business person.
- Constructive . When designing various kinds of systems, performing operations, entering into transactions, constructing objects, a compulsory study of the sources of risk occurs. The result of this is the search for those solutions that practically eliminate or reduce the encounter with the negative consequences of risk. The ability to take risks is one of the important features of a successful person. This is what helps to defeat conservatism, dogmatism, inertness and various psychological barriers of the individual.
Innovative feature
This risk function is responsible for finding an unconventional solution to a standard problem. Innovative methods of activity more often than others lead to economic success. But choosing a new road instead of a beaten path is a considerable risk.
Socio-economic function
The essence of the function of social and economic risks is that such satellites of market activity as competition and riskiness allow identifying groups of owners in social categories, and in economic sectors certain areas of activity for which and in which it is acceptable to take risks.
If the state intervenes in the economic sphere by regulating risk situations in the market, then it greatly limits this function. In social terms, this leads to a violation of the principle of equality of all market participants, as well as to a general imbalance of risks.
Compensating function
The occurrence of the risk function of this plan is due to the fact that, using a risk chance, the object can count on additional profit - more than that offered by plans that exclude risk. This is also called the function of additional compensation or compensation effect.
Protective function
The protective function of risk is manifested in two aspects:
- Social and legal . The concept of "legitimacy of risk" needs legislative consolidation, and insurance activity - in legal regulation.
- Historical and genetic. Both individuals and legal entities throughout history seek forms and means of protection against undesirable consequences of risks.
Risk always fosters a patient attitude towards failure. However, enterprising and proactive individuals need social protection in the event of failure of their enterprise. A mistake due to the calculated risk should not find punishment, but support - both legal and economic.
Analytic function
The analytical function of risk is that from a variety of prospects and ways a person seeks out the most profitable for him, but at the same time the least risky ones. It uses both their own experience, intuition, and special knowledge, research, analysis.
Risk properties
From the functions of risk, we turn to its characteristics, which follow from them:
- Inconsistency . Undoubtedly, risk is the engine of progress, one of the components of success. But at the same time, it leads to adventurism, subjectivity, voluntarism, and gives rise to negative moral and economic consequences.
- Alternative Risk is possible only where there is freedom of choice. When there is only one way of development of events, there is no question of it.
- Indifference . It affects the interests of at least one person or legal entity.
- Universality . Risk is not the choice of an individual, it is the need for the existence of whole systems.
- Factorization . The success of an enterprise directly depends on the determining factors of the risk decision.
- Situationality . The risk situation easily stands out from the rest.
Thus, the functions of risk convince us of its usefulness and necessity both for successful activities and for the development of humanity as a whole. Of course, the risk should be limited to reasonable limits and be fully justified.