15.2 Complex and connected risks Flashcards
A common feature of modern organisations and their environments is c__________.
complexity
Emerging risks are characterised by high levels of u___________.
uncertainty
Ashby identifies three common themes in emerging risk. What are they? (Hint E T S)
High levels of economic, social and technological development.
Ashby identifies three interrelated causes of new or changing risks:
1 c___________
2 i________________
3 g___________
complexity
interconnectedness
globalisation
List three factors that increase complexity.
Developments in IT, internet, social media
Developments in financial markets (e.g. derivatives)
Increasing scope of regulation (e.g. governance)
Size and structure of organisations
Consumer expectations
Long supply chains
Use of outsources service providers
In complex environments, new risks may emerge but go u____________.
Undetected
What events led to a publicity scandal for Facebook in 2018?
Personal data of millions of facebook users had been harvested using an algorithm by Cambridge Analytica, for use in political campaigning. Not even Facebook was aware of the extent of data harvesting.
Which example does Ashby use to demonstrate the interconnectedness of rsks in the modern world?
The Fukishima Daiichi nuclear disaster (earthquake - tsunami - power plant meltdown - damaged Japanese economy - triggered global market impacts)
Why are changes in financial markets difficult to predict?
Because markets are driven by human sentiment, which is unpredictable. and depends on factors such as media reporting.
What is globalisation?
The trend of increasing interaction between various nations and people around the world.
List three risks associated with globalisation.
Cross-cultural misunderstandings
Political extremism
Unbalanced economic development
National businesses struggling to compete
Protectionism from governments
Increased complexity and interconnectedness
