Chapter 3 - Opportunity and Risk Flashcards
Define Reward
something given in recognition of effort or in return for an achievement
Define Opportunity
A time or event that makes it possible to do something
Name 4 factors that can create opportunity
- change in needs or wants
- developments in technology
- change in ability to meet needs or wants
- change in government policies
Name an activity where there is no risk what-so-ever
Nothing, all activities have risk, no matter how small it is
Name 3 risks in an enterprise
- an enterprise is not certain to make profit
- choosing the wrong price
- having too many unexpected customers
What is the diagram of risk?
identify the risks → analyse the implications of each risk → is it worth taking the risk -no-> stop the project
-yes-> plan how to manage the risk → monitor and review
What are the 2 acronyms for risk analysis?
PEST and SWOT analysis
What does PEST stand for?
Political risks
Economic risks
Socials risks
Technological risks
What does SWOT stand for?
Strengths
Weaknesses
Opportunities
Threats
What are the 2 implications of each risk?
- what are the chances of it happening?
- what are the potential consequences for the project if it did happen
What is the acronym for how to deal with the risk?
MATE
What does MATE stand for?
Mitigate: try to reduce risk by changing what you do
Accept: if there is nothing you can do about it, set aside money and be prepared for the negative effect of the risk
Transfer: let someone else take the risk. for example, someone outside the organisation
Eliminate: don’t do it. if you avoid the risk, you might also avoid the positive outcome
How can risk be reduced?
- detailed research (PEST and SWOT)
- ask for advice
- action plan
- spreading the risk
How can employment affect an enterprise?
employment contracts state terms of the job and what to do if there are any problems. minimum wage. laws exist to prevent workers from being unfairly treated.
How can production affect an enterprise?
health and safety laws
