Objective of a commercial organization:
Objective of a commercial organization is to maximize share holder's wealth in two ways :
1:Through capital growth.
1:Through capital growth.
2:Payment of dividends.
Business risks to objectives:
There are two broad categories of risks towards the objectives of a commercial organization.
1. Internal Risks:
1. Internal Risks:
>Change in managerial duties
>Disruption in information system
>Employee accessibility to assets.
>New personnel.
>Rapid expansion of operations.
>Incorporation of new technology.
>Corporate restructuring.
>Expansion/Acquisition of foreign operations.
2. External Risks:
2. External Risks:
>Natural disasters.
>Technological changes like competing technologies, transportation, communication, information.
>Operating environment change.
>Legislative change.
>Change in business conditions like money supply, interest rates, employment levels, demand, consumer.
>Regulatory change.