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SHRM CP > Risk Management > Flashcards

Risk Management Flashcards

1
Q

The ability to not just withstand high-impact events or shocks, but to improve and benefit from them

A

Antifragility

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2
Q

Designed to change the probability of a risk event occurring and/or the degree of its impact on the org’s objectives

A

Risk Management Strategies

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3
Q

Known Knowns (ISO)

A

Events to be expected, involve little uncertainty

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4
Q

Known Unknowns

A

Uncertainties we know exist, but don’t know about their probability or impact

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5
Q

Unknown Unknowns

A

Risks we don’t know exist - rare, major impact

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6
Q

Kaplan and Mike’s 3 risk categories

A
  1. Internal and preventable
  2. Strategy
  3. External
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7
Q

Components of Enterprise Risk

A

strategic, operational, financial, and hazards

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8
Q

Recognized as meeting the highest level of social responsibility, sustainability, and well-being of employees, communities, and environment

A

Certified B Corporations

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9
Q

3 Barriers to risk management

A
  1. Structural
  2. Cognitive
  3. Cultural
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10
Q

Steps of the Risk Management process

A
  1. Establish the context of the risk
  2. Identify and analyze risks
  3. Manage risks
  4. Evaluate
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11
Q

Risk Position

A

The org’s desired gain or acceptable loss in value, influenced by its risk appetite and risk tolerance

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12
Q

Single loss expectancy

A

Expected monetary loss every time a risk occurs

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13
Q

Annualized loss expectancy

A

Expected monetary loss over a 1-yr period

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14
Q

One party engages in risky behavior knowing it is protected because another party will incur any resulting loss

A

Moral Hazard

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15
Q

An agent makes decisions on behalf of a principal but has personal incentives not aligned with principal

A

Principal-Agent Problem

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16
Q

Person or org has potential to be influenced by two opposing incentives

A

Conflict of interest

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17
Q

Risk Control

A

Action taken to manage a risk

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18
Q

Mutually Exclusive and Comprehensively Exhaustive (MECE)

A

The org wants to be confident it has identified all plausible risks for all strategic and operational aspects, but wants to avoid duplication or overlapping identification

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19
Q

Orgs should take all possible steps to ensure health, safety, and well-being of employees and protect from foreseeable injury

A

Duty of Care

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20
Q

How an org can improve its understanding of broad risk

A
  • consult experts and information sources
  • focus groups and individual interviews
  • surveys
  • process analysis
  • direct observation
21
Q

Risk Equation

A

probability of occurrence x magnitude of impact

22
Q

Risk Scorecard

A

Rating the expected probability, speed of onset, existing mitigation, and severity of impact on a 1-3 scale

23
Q

Risk Matrix

A

plots risks on axis by impact and probability

24
Q

PAPA model

A

Evaluates risks by speed of change and likelihood:
-Prepare
-Act
-Park
-Adapt

25
Q

Predictions that provide early warning signal of an org’s increasing risk exposure

A

Key Risk Indicators

26
Q

Lists info about and responsibility for managing specific risks

A

Risk Register

27
Q

Tactics to eliminate uncertainty of a risk

A

Optimize or Avoid

28
Q

Tactics to redefine ownership of a risk

A

Share or Transfer

29
Q

Tactics to employ levers to increase or decrease a risk’s effect

A

Enhance or Mitigate

30
Q

Tactics to take no action on a risk

A

Ignore or Accept

31
Q

What must an org weigh in order to choose a risk management approach?

A

the costs of doing nothing against the costs of the response and level of confidence in the response

32
Q

First step of implementing the Risk Management Plan

A

Defining risk management performance objectives

33
Q

What do contingency plans address?

A
  • policies
  • evacuation/relocation
  • communication
  • training
  • continuity
34
Q

The best way to help employees learn the appropriate response to crisis situations, and to test the risk management plan

A

Simulations and drills

35
Q

Acquire valuable info/data that can be used or sold to competitors

A

Espionage

36
Q

Hindering an org’s ability to function properly by damaging equipment, IT capabilities, org reputation, or harming employees

A

Sabotage

37
Q

Most important factor to consider for drug test policies

A

Federal and state law compliance

38
Q

How to prevent group think

A

prioritize and gather facts before soliciting opinions

39
Q

How to prevent normalization of deviance

A

pay attention to warning signs, ensure standards are taken seriously and deviance is addressed/remedied

40
Q

How to prevent risk incubation

A

stress importance of planning for and prioritizing risks before they materialize

41
Q

When should specific risk management programs be evaluated?

A

After every incident and and at regular agreed intervals

42
Q

Meetings to determine the effectiveness of a risk response strategy

A

After-action debrief

43
Q

Reporting of an org’s violation of policies and processes by employees

A

Whistleblowing

44
Q

Conducts area safety inspections and evaluates hazards

A

Safety committee

45
Q

The probability of a risk occurring

A

Vulnerability

46
Q

How to best ensure a risk management plan has adequately prioritized and addressed the risk(s)

A

Examine the near misses

47
Q

The amount of uncertainty that remains after all possible management strategies have been exhausted

A

Residual Risk

48
Q

The amount of uncertainty an org is willing to accept to attain its goals

A

Risk Appetite

49
Q

Activities in the ISO risk management process

A

Communication and consultation, monitoring and review

SHRM CP (23 decks)

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