Unit 2- Risk management

Question 1

Risk

What is business risk

Answer 1

This is a circumstance or factor that may have a been a significant negative impact on the operations or profitability. This can result from internal or external factors which can be expected or unexpected

Question 2

Risk

Different types of quantifiable risk

Risks that can be measured

Answer 2

• Financial risk
• Operational risk
• Strategic risk
• Compliance risk

Question 3

Risks

Insurable risks

Answer 3

• Theft
• Fidelity Inusrance
• Bugulary
• Fire
• Natrual disasters

Question 4

Risks

Non Insurable risks

Answer 4

• Shoplifiting during trading hours
• Financial loss due to bad management
• Irrecoverable debt

Question 5

Risk Management

What is risk management

Answer 5

This is the process of understanding and minimising what might go wrong in an orginisation. The process includes:
* Identification and analysis of risks to which they are exposed
* A measurement of the likelihood of it occuring
* An assessment of potential impacts on the business
* Deciding what action can be taken to elimnate or reduce risk

Question 6

Risk management

Examples of preventative actions

Answer 6

• Training staff
• Regular backup of IT systems
• Putting robust quality control systems in place

Question 7

Risks- Contigency planning

Contigency planning

Answer 7

This is a plan of action to be followed in the event of an emergency or crisis which threatens to destroy or signficantly disrupt the continued opertaion of normal business activites

Question 8

Risks- Contigency planning

Crisis planning

Answer 8

Involves how a business repsonds to an unforeseen event that threatens the business. A well run business would have plans in place to deal with the unexpected and reduce the impact of them