Risk and Ethics in Start-ups: Top Three Considerations for Investors
Added on 2019-09-30
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BUSINESS MANAGEMENT 1
TABLE OF CONTENTSIntroduction......................................................................................................................................3Risk assessments..............................................................................................................................3Risk according to entrepreneurs..................................................................................................3Risk according to investors..........................................................................................................4Ethical issues...................................................................................................................................5Ethical issues according to entrepreneurs....................................................................................5Ethical issues according to investors...........................................................................................6Top three risk/ethical issues.............................................................................................................6CONCLUSION................................................................................................................................7References........................................................................................................................................82
INTRODUCTIONIn the present scenario, effective management of business operations and activities hasbecome vital for the long-term growth and sustainability of an organisation. Nowadays,companies are required to carry out appropriate risk assessment so that they can become awareof the significant risk confronting their plan, strategies and overall operations (Hanssens, Deloof& Vanacker, 2016). Based on the information collected through the risk assessment, it isrequired by businesses to develop suitable plans and strategies to mitigate those identified risks. The present study outlines different types of ethical issues and risks which need to beconsidered at the time of launching and investing in a start-up. The viewpoint of entrepreneursand investors on risk and ethical issues linked with start-ups are mentioned in this study. Theexamples of companies which are Genkstasy, Whitelane Textiles and Gloria Dulcie have beenused to gain insight into different types of risk in start-ups. RISK ASSESSMENTSRisk according to entrepreneurs In the modern era, risk has become one of the most important aspects of businesses andorganisations. In simpler terms, the risk is defined as the possibility of injury, loss and otherunexpected circumstance. Business risk is defined as the situation in which companies generateless than the anticipated profits or causes losses. The significant impact of risk is in areas such asoperations and profitability of a company (Henderson et al. 2015). According to theentrepreneurs, there are several risks which need to be considered while launching a start-up.The first and foremost risk is a market risk in which companies are required to determinewhether the market is ready for the entry or not. The fashion start-ups in Australia such as MissSummer, Genkstasy, Whitelane Textiles and Gloria Dulcie are at great market risk. Most of thetime, entrepreneurs fail to anticipate appropriate demand in the market, and this results increating failure of the start-ups in the market. It is also suggested that before launching any start—ups, it is required by the entrepreneurs to conduct adequate market research. Such kind ofresearch is suggested because it provides precious data and information about areas such asmarket trend and customer demand (Goldschlag et al. 2017). However, it can also be argued that before launching any start-up, it is necessary for theentrepreneurs to make sure that the demand of products and services which they are lookingforward to the offering is not seasonal. 3
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