SU4 - The ERM Process - Stage 2 - Risk Identification

Question 1

There are 10 Process Mechanisms in the Risk Identification stage (stage 2). Name them

Answer 1

1. Risk Checklist
2. Risk Prompt List
3. Gap Analysis
4. Risk Taxomony
5. PEST Prompt
6. SWOT Prompt
7. Database
8. Business Risk Breakdown Structure
9. Risk Questionnaire
10. Risk Register

Question 2

Explain the purpose of the Risk Prompt List.

Answer 2

It categorieses risks into types of areas. This list them helps to identify the main risks.

Question 3

Explain the Gap Analysis.

Answer 3

It is used to identify the main risks linked to activities within the business. It will identify the gap so that proactive measures can be taken.

Question 4

What does the word ‘Taxonomy’?

Answer 4

The branch of science concerned with classification.

Question 5

Explain Risk Taxonomy.

Answer 5

It is a structured checklist that breaks down risks and opportunities into manageable components.

Question 6

Explain PEST prompt/analysis. Also explain what PEST stands for.

Answer 6

This method can be used to identify risks exposure in the external environment. 
P - political
E - environmental
S - Social
T - Technological

Question 7

What is the benefit of the Database method?

Answer 7

It provides and audit trail of identification, assessment and implementation of management actions.

Question 8

Explain the purpose and benefit of the Business Risk Breakdown Structure.

Answer 8

It organises and defines the total extent of the business operations. It can then be used to identify all the sources of risk within the projects.

Question 9

What is the purpose of the Risk Questionnaire?

Answer 9

It is used when a business needs to establish the concerns and risks that arise in a business project through the various stages. Also shows how employees respond to risk.

Question 10

What is the benefit of the Risk Register?

Answer 10

It is used to capture info on a constant basis and to simplify communication regarding the risk in a project.

Question 11

The activities in the risk identification process are the tasks necessary to capture risks and uncertainty and record them in a risk register. They consists of….

Answer 11

1. Clarify Business Objectives
2. Reviewing Business Analysis
3. Need for Risk & Opportunity Identification
4. Risk & Opportunity Identification
5. Facilitation
6. Gaining a consensus on the Risks, the opportunities and their interdependencies.
7. Risk Register

Question 12

The facilitator may adopt any of the following 8 techniques:

Answer 12

1. Brainstorming
2. Nominal Group Technique
3. Scenario Analysis
4. Delphi Technique
5. Cross Impact Method
6. Systems Dynamics
7. Risk Metalanguage
8. Structured/semi-structured interviews.