How financial risk affects financial management decisions

financial risk
Yes, risk management is a part of decision making. When an organisation takes any decision about capital budgeting, capital structure, and working capital (very important effective decision) they should avoid all the financial risky factors. It’s a process with imagination, creativity and understanding of human behaviour. The whole process is covering a number of intangible & tangible factors affecting the decision process.
In my previous post I discussed about e finance which is a part of e-commerce. I have
Shown how e-finance is effecting our lifestyle, (e-banking, online shopping , using credit card through online, etc…) But to run Business these all can be a very risky factor.
Types of risk:
financial risk
So we have to analyze the risk. This consists of Source analysis and Problem analysis.
It may be external or internal to the system which the main target of risk management.
Examples of risk sources are: employees of a company, stakeholders of a project.
The risks are related to identify threats. For example: the threat of losing money, the threat of abuse of privacy or risk of accidents and casualties. Threats can be with various entities, like customer, share holders, & legislative bodies like the government
Risk identification is another main factor which really affects financial management decisions. Maximum project lead or organization (not for those who have already implemented their system) head unable to identify the risk because each & every body are depending on the system. They should know the scammers are always ready to give a big bouncer.
I’d like point out to the common risk identification method:risk identification
Risk management is a important part of finance. Without it nobody can take a proper decision to run his business.
The areas of risk management are:
• project management activities
• Risk management and business continuity
• the risk communication
• Benefits of Risk Communication
Apart from that there is some other risk which is related to computer.
• Data integrity
• How the scammers/ hackers are getting in
• how to manage the illegal entries
These all are really affects to take a financial management decision. But decisions solve problem but besides that they arise another problems.

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