October 15, 2004
How much risk should a company take in plotting its growth or product development? Chatterjee (management policy, Case Western Reserve Univ.) answers this question and more in a book about risk and business strategy. His premise is that "the way to sustainable profits is not through breakthrough innovations but by avoiding risks." The author describes three types of risk categories-demand, capability, and competitive risks-and explains the role of each in business strategy. The book is divided into two sections, with the first part describing how a company can design a low-risk strategy and the second part explaining how risk affects growth and diversification. Numerous case studies involving a wide variety of companies (e.g., Microsoft, Honda, Enron, and Etoys) are used through the book to illustrate risk strategies. A useful source, given its practical advice, this book should be included in corporate and academic libraries. [Along with Robert E. Mittelstaedt's Will Your Next Mistake Be Fatal?, reviewed below, this is one of the initial offerings from Wharton School Publishing, a joint venture of the Wharton School and Pearson Education that aims to present the works of important business leaders in numerous formats.-Ed.]-Stacey Marien, American Univ., Washington, DC
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