Week 2.2: The Risk Management Process

Question 1

Risk Management

Answer 1

Embracing calculated risk - identify loss and exposure, analyzing, financing
Through knowledge and strategic investment

Question 2

(process step 1) determination of objectives

Answer 2

survival, growth responsibility

efficiency and compliance

Question 3

(Process step 2.) pre-loss objectives

Answer 3

cost of being prepared for an event (i.e. insurance)
prepare for potential losses
reduce stress

Question 4

step 3: Post-loss objectives

Answer 4

survival, continue operating, earnings stability

continued growth, minimize negative externalities (reputative risks)

Question 5

The Risk Management Process

Answer 5

1. identify the loss exposure - what could
2. analyse the loss exposure - in terms of
3. choose the most efficient methods of controlling & financing loss exposures - implement
4. monitor outcomes - money is being spent in the right place & everything is being done

Question 6

(Risk mgmt process. Step one) - identification and loss exposure.

Answer 6

risk manager - identify, analyse find/ monitor risk
risk surveyor (insurance co.) - tells you how to reduce the cost of insurance/ risk  ie, smoke alarms

Question 7

Global Supply chain consequences of Poor Risk Management

Answer 7

eg. Ericsson and Nokia

Question 8

methods of handling risk

Answer 8

major risk control techniques

major risk financing techniques

Question 9

major risk control techniques

Answer 9

avoidance
loss prevention (ex-ante) - reduce the risk of something bad 
loss reduction (ex-post) - reduce severity loss

Question 10

major risk financing technique

Answer 10

retention: active & passive
insurance
non-insurance transfers