General ERM Flashcard

Front

A business model is a set of assumptions about the _____ .

Back

way an organization creates value

Answer explanation

The business model represents the value an organization creates.

Front

What two analytical tools are particularly useful in analyzing the business model?

Back

Value chain analysis and benchmarking

Answer explanation

The risk management professional should utilize appropriate analytical tools for analyzing the business model.

Front

Risk management professionals conduct supply-chain analyses to identify _____ .

Back

potential vulnerabilities to the organization

Answer explanation

The vulnerability of the supply-chain helps determine the organization’s ability to meet performance objectives.

Front

Which activity does the risk management professional perform immediately after obtaining internal and external information about the organization?

Back

organize the information

Answer explanation

To properly perform due diligence, the risk management professional needs to know the order of processing the information. Information must be organized before it can be analyzed, prioritized, or reported.

Front

Which risk identification and analysis technique should a risk management professional use in order to gather information from multiple departments in a brainstorming session that helps to identify shared risks within an organization?

Back

workshops

Answer explanation

Workshops have an advantage in that they have a facilitator that can help to guide the discussion and identify information in this interactive format. Checklists, flowcharts, and questionnaires are less able to identify shared risks between departments as they are completed in a silo approach.

Front

When analyzing an organization’s value chain, which of the following would be considered a primary activity?
Options: technological development, human resources management, infrastructure management, outbound logistics

Back

outbound logistics

Answer explanation

Porter’s value chain model considers the following to be primary activities: Inbound logistics, Operations, Outbound Logistics, Marketing and Sales, and Service.

Front

The organization’s resources and internal support are _____ the risk management strategy.

Back

inputs in the development of

Answer explanation

The appropriate risk management strategy aligns with the organization’s internal resources and support.

Front

When defining the success measures for the organization’s risk strategy, which step will the risk management professional include? Options: a review of the goals and objectives of the risk strategy, a selection of appropriate media for communicating the risk strategy, an analysis of the organization’s total cost of insurable risk, the development of timelines for implementing the risk strategy

Back

a review of the goals and objectives of the risk strategy

Answer explanation

Success measures can only be defined if one understands the strategy’s goals and objectives.

Front

Which of the following BEST guides an organization’s risk management decision-making process? risk financing opportunities, risk retention levels, risk strategy approach, risk treatment options

Back

risk strategy approach

Answer explanation

The design of the risk management framework should facilitate the integration of the risk management process into decision-making and the overall management of the organization.

Front

An effective risk communication strategy requires the selection of appropriate _____ .

Back

media channels

Answer explanation

Communicating with stakeholders is done via one of two channels, depending on whether the audience is internal

or external.