Depending on one’s nature, one may make decisions either more rationally or more intuitively. But the risks of these decisions have to be clear and understood correctly. Responsible entrepreneurs and managers distinguish between four types of risks:

  1. The standard risk that is naturally linked to all businesses, and the act of doing business.
  2. The type of risks that goes beyond the first type of risk – i.e. the type of risk I can afford to take, because I can handle the impact of it.
  3. Then there is the type of risks, I cannot afford to take, as the impacts of it happening would destroy me. Such risks should not be taken under any circumstances.
  4. The type of risk that I must take, because I have no other choice. This type of risks cannot be calculated – it is also called faith, tragedy or an inextricable situation.
« Back to Glossary Index