Risk Management Revision

What is the definition of risk management?

• A process to identify, evaluate and understand the risk of business actions and decisions in order to minimise, control or eliminate the impact of unacceptable risks

• A method to increase business profits by taking more risks

• A strategy to avoid all risks in business operations

• A technique to predict future market trends

Which two areas must be considered in a business setting when it comes to expansion?

• The probability of implications from the activity and the actual consequences if something should go wrong

• The potential for increased revenue and market share

• The likelihood of new competitors and changes in consumer preferences

• The cost of expansion and the availability of resources

What is the first step in the risk management process?

• Identify the potential risks

• Establish the context for the basis of the risk assessment and management

• Implement and follow the risk management plan

• Review and evaluate the effectiveness of the risk management plan

Which step involves assessing the possible severity and probability of occurrence?

• Identify the potential risks

• Analyse the potential risk treatment options

• Assess the possible severity and probability of occurrence

• Create a risk management plan

What is the final step in the risk management process?

• Implement and follow the risk management plan

• Review and evaluate the effectiveness of the risk management plan

• Create a risk management plan

• Identify the potential risks

Which of the following is a potential implication of global expansion?

• Increased local employment

• Disruptions to supplies and operations

• Decreased market competition

• Enhanced brand loyalty

What can cause a loss of employee or customer confidence during global expansion?

• Improved product quality

• Loss of employee or customer confidence

• Increased advertising

• Better customer service

Which factor is NOT listed as an implication of global expansion?

• Business failure

• Natural disasters

• Increased local tourism

• Changes in tax, public opinion, and Government

How can global expansion affect a company's market reputation?

• Damage to market reputation

• Improved market reputation

• No effect on market reputation

• Guaranteed market success

What is the primary purpose of a contingency plan?

• To increase profits

• To respond effectively to future events or circumstances

• To reduce employee workload

• To improve customer satisfaction