After a company identifies the potential risks, it must measure those risks. Epstein and Buhovac (2014, p. 185) identified a seven-stage process for measuring those risks.
1- Calculate the benefit associated with each issue that may generate risk.
2- Calculate the potential costs for each and include reputation risks.
3- Estimate the probability that the risks will happen.
4- Multiply the potential cost by its probability to determine the expected value of each risk.
5- Estimate when the risk may happen and calculate NPV.
6- Add the NPVs of all risks and add as a line item in ROI. Calculate expected value of ROI.
7- Consider a Saudi business and what the risks are. How might the company estimate the probability the risk will happen?
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