Unit 1 Concepts & Definitions of Risk & Risk Management Flashcards
Unit 1: Concepts and definitions of risk and risk management, Definitions of risk, impact of risk on organisations, introduction to types of risk, definitions and development of risk management, principles and aims of risk management
Which of these best describes ‘residual’ (or net, or current) risks
A risk after risk management actions have been taken
Which of these is best describes ‘hazard’ risks
Risks associated with sources of harm
What are core processes?
Key components of a firm’s business model
Which of these best describes the term ‘mandatory’ in relation to risk management objectives as set out in MADE2?
To ensure conformity with rules, regulations and obligations
Activity 1.1. From your reading of this unit so far, and Chapter 1 of Hopkin, which definition of risk seems most appropriate to you?
The simplest definition is the one you can get from ISO 31000. You can find this and several others from Hopkin’s table 1.1 (page 16).
Activity 1.1. What is the difference between ‘compliance’, ‘hazard’, ‘control’ and ‘opportunity’ risks?
The source for your answer to this question can be found in Hopkin chapter 1 ‘Types of risks’ (page 17)
Activity 1.2. Note down what Hopkin means by key dependencies, core processes and stakeholder expectations
Key dependencies are the key things that the organisation needs to be successful; they might be internal or external things but in short, they are what the business depends upon for its future success
Core processes are fundamental to organisational success because they are the means of delivery of strategy and continuity of operations. A core process can be defined as ‘the collection of activities that deliver a specific stakeholder expectation’. Stakeholders are the groups of individuals who have a stake in the business, or are affected by what the organisation does – such as investors, suppliers, customers, the wider society and government
Activity 1.3. The box on page 38 of Hopkin gives an alternative typology of risk factors – controllable and uncontrollable risks. Using heart disease as an example, give an example of both controllable and uncontrollable risks
Controllable risks for heart disease include high blood pressure or cholesterol. Uncontrollable risks include age or gender.
Activity 1.5. List five benefits of good risk management.
Your solution can be found in Hopkin chapter 5. The MADE2 acronym – see Hopkin’s table 5.2 (page 57) can help you to remember. You can also help yourself by remembering the definition of risk, which implies that good risk management will help achieve your organisation’s objectives
Activity 1.5.Outline the five principles of risk management.
Again an acronym from Hopkin chapter 5 is the source of your answer. This time the acronym is PACED – see table 5.1 (page 56).
