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Business Strategy and Technology > 10. Risk Management > Flashcards

10. Risk Management Flashcards

1
Q

What are the two types of risk?

A

Downside risk (pure risk)
Upside risk (opportunity risk)

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2
Q

How to measure risk?

A

Likelihood x impact

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3
Q

What is the risk management process for?

A

The process of identifying and assessing risks and the response to the risk

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4
Q

Risk management process (5 step)

A

Risk appetite (attitude to risk)
Risk Identification
Risk analysis
Risk response
Risk monitoring

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5
Q

What impacts risk appetite?

A

Expectations of shareholders
National culture
Regulatory framework

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6
Q

What is the miles and snow model?

A

Shows that there is four types of management attitudes to risk

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7
Q

What are the four types of management in the miles and snow model?

A

Reactors
Defenders
Analysers
Prospectors

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8
Q

Reactors

A

Not proactive, only change if forced to do so

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9
Q

Defenders

A

Low risk and ignore development outside of expertise

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10
Q

Analysers

A

Balanced attitude to risk, wait to see market reaction to new developments before committing

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11
Q

Prospectors

A

Risk seeking, entrepreneurial

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12
Q

Which models can you use to help you identify risks in the exams?

A

PESTEL
Porters 5 forces

Also

SWOT, past events, experienced people

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13
Q

How to calculate breakeven?

A

Total fixed costs/contribution per unit

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14
Q

Model to assess risk apetite?

A

Reactors, defenders, analysers, prospectors

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15
Q

Model to identify risk?

A

Pestel

Porters 5 forces

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16
Q

Models to complete risk assessment?

A

Likelihood
Impact

17
Q

Model to assess risk response?

A

Transfer
Accept
Reduce
Avoid

TARA

18
Q

How to transfer risk by TARA?

A

Insurance
Hedging foreign exchange

19
Q

How to accept risk by TARA?

A

Low likelihood and low impact may lead to acceptance

20
Q

How to reduce risk by TARA?

A

Put controls in place

21
Q

How to avoid risk by TARA?

A

Avoid certain projects
If you cannot avoid, revert back to transfer or accept

22
Q
A

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