Operational Risk Management

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What is the primary concern of the government regarding business operations?

Profit maximization

Market competitiveness

Shareholder value creation

Operational risk mitigation (correct)

What is the role of regulators such as NAFDAC and SON?

To promote international trade

To regulate business operations and ensure conformity with best practices (correct)

To promote entrepreneurship

To provide financial support to businesses

Why is it essential for the government to be interested in the risk exposures of multinational corporations?

To prevent negative economic impacts (correct)

To prevent competition

To promote foreign investment

To increase tax revenue

What can happen to businesses that fail to satisfy regulatory requirements?

They are imposed fines, restricted or closed down Signup and view all the answers

What is the purpose of the government's posture towards business risks and strategic measures?

To forestall grave economic impacts Signup and view all the answers

What do regulators have a continuing interest in?

Business operations and dealings within the economy Signup and view all the answers

What is the primary reason why management teams should not neglect operational risks?

To avoid monumental loss of operational assets and stoppage of operations Signup and view all the answers

Why are employees invested in the operations of a business organization?

Because their salaries and allowances come from the organization Signup and view all the answers

What can be a consequence of operational loss arising out of risk?

Jeopardizing of company operations and payment of employee salaries and allowances Signup and view all the answers

Why should a management team institute measures to checkmate operational risks?

To mitigate known business risks Signup and view all the answers

What is a potential consequence of a fire outbreak in a factory?

Monumental loss of operational assets and stoppage of operations Signup and view all the answers

What is an example of an operational risk that a business organization may face?

Fire outbreak in a factory Signup and view all the answers

Why are distributors interested in the risk exposures of their suppliers?

To avoid disruptions in their business operations Signup and view all the answers

What hinders business customers from switching to other suppliers?

Protocols involved in switching suppliers Signup and view all the answers

Why are industrial customers interested in their suppliers' risk exposures?

To ensure business continuity Signup and view all the answers

What can occur if a supplier's operations are disrupted due to risks?

Difficulty in fulfilling contractual obligations Signup and view all the answers

What is essential for distributors to avoid disruptions in their business operations?

Risk mitigation measures in place by their suppliers Signup and view all the answers

Why is it important for suppliers to have risk mitigation measures in place?