Entrepreneurial Risks: Causes, Consequences and Management (Theoretical Aspects)

Abstract

The article reveals the causes of entrepreneurial risks, identifies the consequences that may arise in the manifestation of entrepreneurial risks and considers the process and system of entrepreneurial risk management. It has been found that entrepreneurial activity is characterized by management decisions that can be risky. It is determined that entrepreneurial risks are an essential component of entrepreneurial activity. It is established that the emergence of business risks is influenced by several factors, including economic climate, features of technological progress, level of competition, specifics and complexity of business activities, parts of geographical location. It is proved that business risks are a vector of the consequences of management decisions the entity makes in the context of its business activities to profit from such activities. Types of entrepreneurial risks are identified, such as economic risk, business development risk, business stability risk, psychological risk, social risk, the risk of losing the proper level of efficiency from the use of fixed capital, the risk of reducing financial stability, the risk of lowering the efficiency of resource potential, the risk of dropping the level of solvency of consumers due to the loss of a significant share of income, the risk of public authorities to make management decisions that are restrictive in the implementation of business entities, etc. It has been proved that the process of business risk management should be continuous and structured, and its main goal should be to identify, analyze, assess and prevent the occurrence of business risks and various threats associated with risks. It is determined from the perspective of further research to find out the peculiarities of improving the business risk management system in the context of the implementation of business activities by the business entity.