Case Study on Operations - Research Paper Example

Entrepreneurship generally entails the process where individuals with high aptitude undertake to pioneer change thus producing, improving, and increasing wealth. Such individuals are usually discouraged and held back by the uncertainties and risks that are involved with pioneering change. In this case, insurance companies come in handy to bear the risks involved with pioneering change at a reasonable premium and thus influencing entrepreneurial attitude, innovation, and investment. Establishment of businesses with new ideas is risky to businesses, since it involves pioneering investments into unknown ventures that may turn out to be either a gain or loss.

Although there are outstanding entrepreneurs in the society that can bring about huge economic advancements, entrepreneurial capability exists among all human beings and it would therefore collectively build the economy, provided insurance services are availed for the unlimited risks that exist in the business world (Tiwari, 2007, p.171). Entrepreneurs undertake to insure themselves against risks involved with their ventures through entering into insurance contracts where they service the insurance with periodic premiums.

Through insurance, entrepreneurs can venture into investment with a positive attitude and pioneer innovations irrespective of the risks involved. Innovation is the process of creating products, services, and technology in new and creative ways, which contributes towards solving business problems (Jolly, 2003, p.6; Bessant and Tidd, 2007, p.19). Although all human beings have entrepreneurial skills depending on the society and the environment in which they are brought up, very few individuals get to venture into entrepreneurships due to the fear of risks involved.

Risk avoidance largely contributes to economic underdevelopment and thus insurance companies play a key role in fostering economic development through insuring entrepreneurs against business risks. Through insurance companies, entrepreneurs have the opportunity of transferring the risks the face through insurance policies that cover losses incurs by entrepreneurs incase of risk occurrence. However, more to insurance policies businesses have opportunities of transferring risks to other business participants such as the suppliers, customers, and even landlords.

Businesses often face the risk of customers returning goods previously sold, to transfer this risk, the business may restrict return of goods thus avoiding costs of returned merchandise (Ramsey and Windhaus, 2009, p.134). Insurance companies generally influence investment and economic development, considering that good ideas for new companies can come from anyone who seeks solutions to existing problems faced and does not have to bear business risks involved (Read et al. 2011. p.12) Q2. Casualty and property insurance and life insurance largely contribute to the stability of consumption among citizens since they have confidence in future consumption risks.

Consumers who fully insure themselves against unforeseen future financial challenges that may arise have the tendency to consume more in the present and thus, the economy of the country as a whole is stabilized. This is in consideration of the