Business Studies Paper on Demerits of Risk Management

The demerit that risk management is subjective to a certain extent holds water. Often, an external force or entity that the risk manager cannot control manifests a risk (Gupta, 2016). Objectivity in such a case is untenable. Some risks are also hard to point out during the assessment phase. The reactions to the risks that have not been anticipated are often subjective (Gupta, 2016). The second assertion that the manager might have a subjective character is also rue. In management scenarios, the approach of the individual mandated to manage a business or a group of people matters. Some people are predisposed to view risks and challenges objectively while others regard the same subjectively. The stance that the risk manager takes can influence the objectivity of the process. It is crucial, therefore, to vet and understand persons that have been considered for the position of a risk manager. They have to be independent thinkers who are free of biases and subjectivity.

The third demerit stating that there is insufflate separation in the different risk factors means that the manager might attempt to solve or handle different risks using the same approach. Given that different risks affect the business in different ways, this might prove ineffective. The fourth demerit stated is that outcomes depend on qualitative measures that are hard to take over. The term qualitative measure is a bit ambiguous because it is often impossible to gauge qualitative properties with precision which makes it harder to determine whether the risk management measures have been effective. This rolls back to the biases and subjectivity of the individual manager, which signals the first demerit of risk management.




Gupta, N. (2016). Risk Assessment: Objectivity vs. Subjectivity | TCS Cyber Security Community. Retrieved from