Business Risk Management Strategies Quiz

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What characterizes risks in the Top-Right Quadrant?

High likelihood, high magnitude (correct)

Low likelihood, low magnitude

High likelihood, low magnitude

Low likelihood, high magnitude

Which example best fits the category of risks with high likelihood and high magnitude?

Employee absenteeism in a large corporation

Data breaches for companies handling sensitive data (correct)

Minor equipment malfunction in a small business

Routine maintenance delays in a manufacturing plant

How does proactive risk management help organizations in operations?

Ignoring potential risks until they materialize

Reacting to risks as they occur

Identifying potential disruptive events in advance (correct)

Downplaying the impact of potential risks

What does the 'level of risk' refer to in risk management?

Current or residual risk after considering likelihood and impact Signup and view all the answers

Why is the explicit management of risks considered a baseline expectation from stakeholders?

To prevent operational disruption Signup and view all the answers

In what quadrant would you most likely find a risk with low likelihood and high magnitude?

Bottom-Right Quadrant Signup and view all the answers

What are 'opportunity risks' in organizations?

Risks that are deliberately taken to achieve positive returns and further the organization's mission Signup and view all the answers

What is the ideal goal concerning 'hazard risks'?

To eliminate these risks entirely Signup and view all the answers

Which type of risk can potentially enhance or inhibit the achievement of an organization's goals?

Opportunity risks Signup and view all the answers

What is the primary focus when dealing with 'compliance risks'?

Minimizing to a cost-effective level while complying with legal standards Signup and view all the answers

Which risk type is often referred to as regulatory risk?

Compliance risks Signup and view all the answers

In what situation do organizations acknowledge that eliminating risks entirely is not always feasible?

When mitigating hazard risks Signup and view all the answers

What is a potential consequence of compliance risks for an organization?

Damage to reputation Signup and view all the answers

In managing compliance risk, what is the purpose of identifying applicable laws and regulations?

To understand the legal and regulatory landscape affecting the organization Signup and view all the answers

What is a key component of a comprehensive compliance program according to the text?

Developing internal policies and procedures Signup and view all the answers

Why is monitoring side effects crucial in risk management strategies?

To understand broader implications and make necessary adjustments Signup and view all the answers

What are spin-offs in the context of risk management according to the text?

Unexpected positive outcomes beyond primary objectives Signup and view all the answers

How do organizations typically manage compliance risk according to the text?

By educating employees about compliance responsibilities Signup and view all the answers

What is the purpose of examining past incidents and nonconformities in a task?

To understand if previous issues have been resolved effectively Signup and view all the answers

Why is it important to check legal and regulatory requirements for a task?

To ensure compliance and avoid legal issues Signup and view all the answers

What is the significance of identifying hazards and predicting hazardous events associated with a task?

To prevent accidents by assessing potential risks Signup and view all the answers

Why is it crucial to rate risks after identifying hazards?

To prioritize which risks need immediate attention Signup and view all the answers

What should be done if a risk is deemed unacceptable based on the risk rating?

Explore ways to eliminate or reduce the risk Signup and view all the answers

Why is reviewing a task for risk elimination or reduction crucial?

To explore ways to mitigate risks effectively Signup and view all the answers

Which risk control measure involves changing out a material or process to reduce the hazard?

Substitution Signup and view all the answers

What type of control measure aims to prevent hazards from coming into contact with workers while still allowing them to perform their tasks?

Engineering controls Signup and view all the answers

Which control measure involves giving workers relevant procedures, training, or warnings to change the way work is done?

Administrative controls Signup and view all the answers

What term is used in organizational risk management to refer to the adverse consequences resulting from incidents, accidents, near misses, and operational activities?

Losses Signup and view all the answers

Which control measure aims to completely eliminate a hazard by ensuring it no longer exists?

Elimination Signup and view all the answers

What are examples of administrative controls?

Providing workers with relevant procedures and training Signup and view all the answers