Bishop 2.1 - Risk Analysis Boundaries Flashcards
What is a business/corporate risk?
A business/corporate risk is a future possibility that may prevent
you from achieving a business/corporate goal. The risks facing a
typical business are broad and include things that you can control
such as your strategy and things beyond your control such as the
global economy
What is the relationship between risk and reward?
There is a strong relationship between risk and reward. It’s
generally impossible to achieve business gains without taking on
at least some risk. Therefore, the purpose of risk management
isn’t to completely eliminate risk. In most cases, risk management
seeks to optimize the risk-reward ratio within the bounds of the
risk tolerance of your business.
What are the common types of risk you manage? There are 20
Competitive, economical, operational, legal, compliance, strategy, reputational, program, project, innovation, country, quality, credit, exchange rate, Interest rate, taxation, process, resource, political, seasonal
What is competitive risk?
The risk that your competition will gain advantages over you that
prevent you from reaching your goals. For example, competitors that
have a fundamentally cheaper cost base or a better product.
What is competitive risk?
The risk that your competition will gain advantages over you that
prevent you from reaching your goals. For example, competitors that
have a fundamentally cheaper cost base or a better product.
What is economic risk?
The possibility that conditions in the economy will increase your costs
or reduce your sales.
What is an operational risk?
The potential of failures related to the day-to-day operations of an
organization such as a customer service process. Some definitions of
operational risk claim that it is the result of insufficient or failed
processes. However, operational processes that are deemed to be
complete and successful also generate risk.
What is a legal risk?
The chance that new regulations will disrupt your business or that you
will incur expenses and losses due to a legal dispute.
What is a legal risk?
The chance that new regulations will disrupt your business or that you
will incur expenses and losses due to a legal dispute.
What is a compliance risk?
The chance that you will break laws or regulations. In many cases, a
business may fully intend to follow the law but ends up violating
regulations due to oversights or errors.
What is a strategy risk?
The risks associated with a particular strategy.
How are business and corporate risk different?
Although The expressions “Business Risk”and “Corporate Risk” are used interchangeably, Business Risk is sometimes limited to just commercial matters whereas Corporate Risk usually refers to all aspects of establishing and operating a business
What are the four quadrants of business risk?
Hazard, Operational, Financial, Strategic
What are the four quadrants of business risk?
Hazard, Operational, Financial, Strategic
