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Defining the Concept of Risk Applied in Entrepreneurship. Conceptual Delimitation Risk - Entrepreneurial Uncertainty

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  • Alexandru Tărăbîc Andrei

    (West University of Timisoara, Romania)

Abstract

Even though in many cases the terms of risk and uncertainty are similar, they have to be delimited to understand the meaning of each, individual, as accurately as possible. The two terms are combined in different situations. No matter how well the risk is managed, uncertainty cannot be removed because all possible situations and interdependencies cannot be taken into account. Thus, a source of risk can be considered uncertainty in itself if it is based on poor quality information about the actual internal or external situation of the company. Also, in my conclusion, traditional financial theory distinguishes between systematic risk and particular risk, which reaches the company’s overall risk. Investors can reduce total risk with the two primary risk management instruments, namely diversification and asset allocation.

Suggested Citation

  • Alexandru Tărăbîc Andrei, 2019. "Defining the Concept of Risk Applied in Entrepreneurship. Conceptual Delimitation Risk - Entrepreneurial Uncertainty," European Review of Applied Sociology, Sciendo, vol. 12(18), pages 43-46, June.
    • Handle: RePEc:vrs:erapso:v:12:y:2019:i:18:p:43-46:n:4
    DOI: 10.1515/eras-2019-0004
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    References listed on IDEAS

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    1. Marius Ioan Pantea & Valentin Munteanu & Delia Gligor & Daria Sopoian, 2008. "The Managerial Performances Evaluation through the Economic Value Added," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 83-100.
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