Explanations:Business risks can be broadly categorized into internal and external risks. Internal risks are those that arise from within the business itself, such as operational inefficiencies, financial mismanagement, or internal fraud. External risks, on the other hand, are those that originate from factors outside the control of the business and can significantly impact its operations and performance.
External risks can be further classified into various categories, including economic, political, legal, technological, and environmental risks. However, the specific context of the question focuses on the 26/11 terror attacks, which fall under the broader category of external risks. These attacks were a deliberate act of terrorism that occurred on November 26, 2008, in Mumbai, India, and had a significant impact on the operations of the Taj Hotel, among other establishments.
The 26/11 terror attacks are considered an external cause because they were an event that originated outside the control of the Taj Hotel. The hotel had no influence over the occurrence of the attacks, and the subsequent shutdown of its operations was a direct result of this external event. This type of risk is distinct from economic causes, which would involve factors such as market conditions, inflation, or economic policies that affect the business environment. It is also different from human causes, which typically refer to internal human factors within the business, such as employee behavior or management decisions.
Furthermore, the 26/11 terror attacks are not considered a natural cause, as natural causes refer to risks arising from natural phenomena such as earthquakes, floods, or hurricanes. The attacks were a deliberate act of terrorism, not a natural event.
Understanding the distinction between different types of business risks is crucial for effective risk management. External risks, such as the 26/11 terror attacks, require businesses to develop strategies to mitigate their impact and ensure business continuity in the face of such events. This may involve implementing security measures, developing emergency response plans, and maintaining insurance coverage to protect against such risks.