Business Risk as a Controlled Variable

Abstract

This paper examines the concept of risk as a factor in the conduct of business enterprises and its control as a necessary pre-occupation of managers of the enterprise. In the paper a highly simplified representation of an enterprise will be put forward and the behaviour of the risk inherent in the enterprise explored to show qualitatively the effects of bad control of risk. The mathematics of the model and control of risk have not been worked out but qualitatively its behaviour corresponds sufficiently with some aspects of real life to suggest that a rigorous theoretical study would be of value.