18 Questions
What is a key reason why risk management in organisations often fails to identify and assess multiple simultaneous risks?
The techniques of risk management are too complex to accommodate multiple simultaneous failures
What is a key consideration for organisations in terms of managing multiple simultaneous risks?
Assessing the likelihood of multiple untoward events happening at the same time
Why is it important for organisations to consider multiple simultaneous risks?
Because organisations often fail or almost fail due to multiple simultaneous risks materialising
What is an example of multiple simultaneous risks materialising?
A change in government policy and an increase in interest rates
What is a challenge in risk management when dealing with multiple simultaneous risks?
The complexity of the techniques involved
What is the role of human intuition in managing multiple simultaneous risks?
It is capable of processing complex risk scenarios intuitively
What was the consequence of the 'flight to quality' by depositors?
The home loans company's share price collapsed by about 99 %
What should organisations do in addition to identifying and responding to threats?
Apply risk management tools to opportunities as well
What can occur if an organisation misses an opportunity?
A threat that has not been avoided is created
What did the home loans company declare to their own banks?
A material adverse change in circumstances had occurred
What is the purpose of identifying opportunities in risk management?
To position the organisation to exploit opportunities
What is illustrated in Figure 5.15?
An opportunity missed as a threat that has not been avoided
What is the primary purpose of a risk matrix?
To visualize and prioritize multiple risks
What is the difference between inherent risk and gross risk?
Inherent risk is the level of risk before mitigation, while gross risk is the level after mitigation
What is the term for the level of risk remaining after mitigating actions have been introduced?
Residual risk
What is the risk appetite of an organization?
The level of risk that an organization is willing to accept in pursuit of its mission or vision
What happens when an organization has to accept a level of risk beyond its risk appetite?
The organization must accept the risk temporarily until mitigation is possible
What is the benefit of plotting multiple risks on a single risk matrix?
It enables the organization to prioritize risks more effectively
This quiz assesses your understanding of how organisational culture can pose a threat and how multiple simultaneous risks can lead to organisational failure. It covers the limitations of risk management techniques in identifying and assessing these risks.
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