The Treatment of Business Risks Has Always Been an Important Tool for Business Success: Utility Function Method

Abstract

The business risk is a topic that is very rarely spoken, but that is essential for those who have to make decisions concerning the life of a company: incorrect choices can shortly lead to business failure. Basically important is the activity of the Risk Manager. It is oriented to identify, evaluate, manage and control corporate risks. The efficacy of risk management also depends on the information available for the decision: more information available, the best risk response. To effectively manage risks, a systematic and organized approach is required and specific methodologies and techniques are needed. In this paper we will propose the method of utility function: an effective and efficient method to deal with business risks by limiting its negative effects.