The textbook defined business risk as the possibility that an event could occur and interfere with an organization’s ability to meet strategic goals or operating plans.
Identify and briefly explain business risks for each of the following decisions.
A. The managers of Flow Systems, an irrigation equipment manufacturer, are considering the purchase of new welding equipment that will reduce labor costs. In addition, the equipment is much safer than the equipment it would replace. The added safety is expected to reduce Flow System’s insurance costs by half.
B. Amira Salazar needs to choose between two summer internship offers she recently received. If she accepts a summer internship with IBM in its finance department, she will be located in South Carolina and work in the strategic planning department. If she accepts an internship with Hewlett-Packard, she will be located in Idaho and work on a special costing project for a new printer design.