risk management

Question 1

risk management

Answer 1

risk management refers to the practice of identifying potential risks in advance, analysing them and taking precautionary steps to minimise a firms exposure to the risk.

Question 2

business risk

Answer 2

Business risk is a circumstance or factor that may have a significant negative impact on the operations or profitability of a given business.
Business risk can result from internal conditions or external factors that may be present in the wider business world.

Question 3

types of risks

Answer 3

financial, operational, strategic, compliance

can be planned for, and measures can be taken to minimise the effects of such risks on the business.

Question 4

insurable risks

Answer 4

Many quantifiable risks are also Insurable Risks. For example, insurance can be taken out against the failure of a major customer and a service contract can be arranged to cover the breakdown of equipment and machinery.

Question 5

unisurable risks

Answer 5

These arise when the probability of the risk occurring is impossible to quantify - so insurance companies are unable to price the risk. Some occurrences, such as those which take place during civil unrest, or even war, are simply too widespread to even consider insuring

Question 6

external risks

Answer 6

• Public relation failures
• employee error
• product failures
• natural disaster
• economic factors
• legal challenge
• equipment failure
• supply chain problems

Question 7

risk management ~2

Answer 7

It involves the activities undertaken by a business, which are designed to control and minimise threats to the continuing efficiency, profitability and success of its operations.

Question 8

process of risk management

Answer 8

• the identification and analysis of risks to which the organisation is exposed
• a measurement of the likelihood of the risks occurring
• an assessment of potential impacts on the business
• deciding what action can be taken to eliminate or reduce risk

Question 9

prevention actions

Answer 9

• train staff properly
• regular backup of IT systems
• put robust quality control systems in place
• install a sprinkler system

Question 10

contingency planning

Answer 10

A contingency plan is a plan of action to be followed in the event of an emergency or crisis occurring which threatens to destroy or significantly disrupt the continued operation of normal business activities