VI. Speak on the following,

1. Marketing (Generalities).

2. A Marketing mix.

UNIT 4

Risk Management

Risk management is an accepted practice in business activi­ties. Risk is the possibility of loss or injury. It is a part of everyday life for businesses and individuals. Individuals and businesses must evaluate the risks they face, and they should minimize the costs involved with those risks.

Risk management is not simply a matter of insuring against risk. It involves, first of all, surveying all the areas of risk to a com­pany and then preparing a series of recommendations to minimize potential losses from them. This is often done by risk management consultants. But some major companies have now appointed their own risk managers.

1.Fire is still the greatest potential risk. The risk manager can simply recommend bricking up a doorway or a hole in the wall of a warehouse to prevent fire from spreading. Or he can suggest a safer method of stacking. On the other hand, he can recommend installing a very expensive sprinkler system. This could save a company huge sums in insurance premiums.

2.Industrial espionage is another, constantly increasing risk. Computer security is particularly important, and it is absolute­ly vital that only authorized persons should have access to the in­formation stored in the computer. The risk manager will suggest methods of selecting computer staff and restricting access to it inside and outside working hours.

3.Working conditions are another area of risk manage­ment; even such ordinary things as ventilation, heating and lighting are important. These can expose a company to personal claims from staff for damage.

4.Accident prevention and a company's increased liability because of new consumer protection legislation are other, obvi­ously important areas.

A great many recommendations fall into the 'common sense' category. Suppose a company relies on only one supplier for a vital raw material. If that supplier suffers a total loss of pro­duction because of a fire, strike or some other reason, the compa­ny faces huge losses, and even more important, a permanent loss of market share. To prevent this, the risk manager or consultant might recommend coming to a two-way agreement with a com­petitor that in such a case the competitor would supply raw mate­rials to the assembly line. The agreement might even stipulate supplying the end product if that were necessary. Another exam­ple of this 'common sense category' is that all the top executives should never travel together in the same jet, or that valuable goods should not all be stored in one building but spread over a number of sites. Risk management is becoming more and more important as a concept.

Exercises

I. Translate into Russian.

Costs; fire; warehouse; sprinkler; insurance premium; industri­al espionage; vital; important; computer staff; heating; lighting; claim of damage; accident; legislation; protection; liability; total loss; common sense; market share; strike; top executive; the same; agreement; spread; restrict; select; suggest; prevent; ac­cept; evaluate; appoint.

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