- Published: September 4, 2022
- Updated: September 4, 2022
- University / College: University of Leicester
- Level: Master's
- Language: English
- Downloads: 45
Innovation and Risk Management Insert Insert Comparison between Innovation and Entrepreneurship Both innovation and entrepreneurshipdeal with the new ideas whether implementing or creating them. The characteristics that build the two outfits are generally similar. They are challenging in terms of design and implement new ways of doing business. Within an existing business, they desire to come up with agility and develop accountability. They want to avert cases that bring difficulties and challenges to the operation of a business. The two levels of business demand communication. In all aspects of their dealing, the innovator and entrepreneur are required to perform communication (Caggese, n. d.).
Difference between Innovation and Entrepreneurship
Innovation is making a new idea valuable. It is improving on the existing new design it is not something that has never been there before. An inventor frequently makes a change. Innovation interrupts the status quo but dies not translate into entrepreneurship. On the other hand, Entrepreneurship is coming up with something very new. Its not like the innovation whereby they are improving the existing ideas. Coming up with ideas without implanting them is worthless. Change is challenged in terms of financial management aspects while entrepreneurship pride in culture and financial management (Entrepreneurial risk, investment, and innovation, 2013).
The Challenges of Managing Uncertainty and Risk
Keeping up with the market is a major challenge to the managers since the market is continuous and unpredictable. A manager is required to do an ongoing market research in order not to make outdated decisions. Being the market leader is the aim of every entrepreneur; how to get there is the effort, the entrepreneur puts (Caggese, n. d.).
Planning is another challenge since the managers have to make different decisions from time to time. The decision made today will be different from the decisions made tomorrow depending on the circumstances. As the business grows, the strategies need to evolve to meet the changing demands (Entrepreneurial risk, investment, and innovation, 2013). Financial management is another challenge to the managers. Managing the cash flow is crucial especially in a growing business. Planning in terms of funds to be used in future is crucial so that you can know where to get i. e. external sources.
Competition is a challenge to every business, finding the strategies to cope with the competition is crucial. The loyal customers might find an alternative product hence you must have a way to win them back. Winning back the customers is not easy since you need to do research no why the customers had to shift. Technology is a problem with many businesses. The emerging of new technology is a challenge for many companies since you have to move with the latest technology. In every business, its important to know what you customers want (Caggese, n. d.).
How to Manage Uncertainty and Risk
Identifying the risk should be the first thing manager’s do. They have to identify and categorize the type of risk in order to see their potential impact, e. g., operational, financial, legal risk, etc. Quantifying the risk is the next thing after the managers have identified the risk category. They are supposed to find out the cost incurred in case an individual risk is to happen (Entrepreneurial risk, investment, and innovation, 2013). Managing the risk is the final step after you have identified and quantified the risk. By doing so, the risk that is there can be tolerated. If the manager thinks that, many losses will occur in the event that the risk comes up. They will have to see how to prevent the risk occurs.
Caggese, A. Entrepreneurial Risk, Investment and Innovation. SSRN Journal. doi: 10. 2139/ssrn. 1002869
Entrepreneurial risk, investment, and innovation. (2013). Strategic Direction, 29(2). doi: 10. 1108/sd. 2013. 05629baa. 003
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