Risk Management Approaches

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Questions and Answers

What is one of the biggest risks for businesses operating in the hospitality industry?

Staff turnover

Marketing campaigns

Food safety (correct)

Natural disasters

How can norovirus be spread in a hospitality business?

Through contaminated water sources

By contaminated surfaces or infected people (correct)

By sharing utensils

Through air conditioning systems

What may happen if there is an outbreak of norovirus in a hospitality business?

Closure for extensive cleaning leading to Business Interruption costs (correct)

Decreased food prices

Increased customer satisfaction

Expansion plans

Why is it important for owners and managers in the hospitality industry to keep up with current risks?

To address new and emerging challenges effectively Signup and view all the answers

Which of the following is mentioned as a common food-borne infection in the hospitality industry?

Salmonella Signup and view all the answers

What type of claims may a business face due to an outbreak of norovirus?

Workers' compensation claims and bodily injury claims from patrons Signup and view all the answers

What is a key measure to reduce risks related to food safety in restaurants?

Sanitation training for food vendors Signup and view all the answers

Why is it important for employees serving alcohol to hold appropriate licenses?

To avoid complacency and legal issues Signup and view all the answers

What can happen if a business serves alcohol to an already intoxicated patron?

They may face significant consequences Signup and view all the answers

Why should tour operators and hotels be concerned about transportation accidents?

To avoid liability for injuries to passengers Signup and view all the answers

What is essential for hotel employees carrying out transportation services?

Proper risk management considerations Signup and view all the answers

Why should businesses serving alcohol continuously train their employees?

To reduce the risk of safety incidents and legal issues Signup and view all the answers

What may risk models lead organizations to believe?

They can regulate every potential risk Signup and view all the answers

Why might an organization neglect the possibility of novel risks?

Because they are overconfident in their risk models Signup and view all the answers

What is one challenge related to understanding cumulative risk?

Insufficient data availability Signup and view all the answers

Why are some boards of directors required to review enterprise risk management processes?

To scrutinize risk management plans Signup and view all the answers

What has become a major component of business strategy in an increasing number of industries?

Internal audits Signup and view all the answers

Which organizations have developed risk management standards according to the text?

International Organization for Standardization (ISO) Signup and view all the answers

What is the purpose of a risk avoidance strategy?

To deflect as many threats as possible to avoid damaging events Signup and view all the answers

How is risk reduction achieved according to the text?

By adjusting project plans or company processes Signup and view all the answers

What is the purpose of risk sharing as described in the text?

To distribute risks among participants or business departments Signup and view all the answers

When might a company decide to retain a risk according to the text?

When the risk outweighs the anticipated profit Signup and view all the answers

Why is it mentioned that complete elimination of all risk is rarely possible?

Because some risks are inherent in business operations Signup and view all the answers

What is the main difference between risk avoidance and risk reduction strategies?

Risk avoidance aims to eliminate risks, while risk reduction aims to minimize their impact Signup and view all the answers

What is the main purpose of ISO 31000 according to the text?

To provide frameworks for risk management process improvements Signup and view all the answers

What is one of the key principles recommended by ISO 31000 for the risk management process?

Addressing potential errors Signup and view all the answers

Why can't ISO 31000 be used for certification purposes?

It is not designed for that purpose Signup and view all the answers

What is a key aspect of the risk management process according to ISO 31000?

Being based on the best available information Signup and view all the answers

How does ISO 31000 recommend tailoring the risk management process?

Tailoring it based on the project Signup and view all the answers

Which of the following is NOT a recommended target area in the overall risk management process according to ISO 31000?

Ignoring human factors Signup and view all the answers

Study Notes

Hospitality industry faces constantly changing risks and regulations
Food-borne illness is a common risk with infections such as salmonella, campylobacter, vibrio, E. coli, and norovirus
Norovirus outbreaks can lead to significant expenses for business owners, including Business Interruption costs and bodily injury claims
To reduce food-borne illness risks, restaurant personnel should be trained in food handling, sanitation, and health safety procedures
Alcohol-fueled behavior poses risks for businesses serving alcohol, including Budget and Reputation Damage, and legal liabilities for serving minors or already intoxicated patrons
Employees who serve alcohol must hold appropriate licenses and undergo continuous training to avoid complacency
Transportation accidents are a risk for tour and hotel businesses, with potential liabilities depending on whether the company or a third party provides the service
After risks are identified, companies can adopt risk management strategies such as risk avoidance, risk reduction, risk sharing, and risk retaining
Risk models may give a false sense of control, and neglect novel or unexpected risks
Risk management standards have been developed by organizations like NIST and ISO to help identify threats, assess vulnerabilities, and implement risk reduction efforts according to organizational strategy.
ISO 31000 principles provide a framework for risk management process improvements, increasing the likelihood of achieving objectives, improving risk identification, and effectively allocating and using resources for risk treatment.

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Description

Learn about strategies companies can take to address different types of risk such as risk avoidance, risk reduction, risk transfer, and risk retention. Understand steps that can be taken to prevent loss, recover from a loss, and how organizations can pay for unexpected events.