ABSTRACT
This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book introduces the topic of managing firm risks by establishing an analytical framework and providing descriptions of key terms. It provides a theoretical basis for risk management by describing the causes, processes and consequences of risk taking. The book discusses the nature and sources of firm risk showing the links between different concepts of risk and how they can be traced to a firm's structure and environment. It also discusses the behavioural and structural factors that lead managers and companies to take risks, and how this is growing under moral hazard imposed by government regulation and shareholder expectations. The book examines the processes of decision making that incorporate attitudes towards risk and which can lead to more or less risky outcomes. It discusses the rationale for dialling up the right level of organizational risk to increase shareholder value.
