TOU 041 Risk Management Reviewer

Questions and Answers

What does risk refer to?

Hazard, danger, peril, exposure to loss, injury or destruction.

How is risk defined according to ISO 31000?

The identification, evaluation, and prioritisation of risk.

What is the main objective of risk management?

To increase the probability and impact of positive outcomes and decrease the probability and impact of negative outcomes.

Which of the following is not a source of risk?

Guaranteed Success Signup and view all the answers

What are the classifications of risk in the workplace according to HIRAC?

Low, Average, and High Risk Environments. Signup and view all the answers

The _____ is the first step in Risk Analysis.

identification of existing and possible threats Signup and view all the answers

Crisis management is considered a good practice in risk management.

False Signup and view all the answers

When is risk analysis especially useful?

When you are planning projects Signup and view all the answers

What can cause operational risks?

Disruption to supplies and operations, loss of access to essential assets, or failure in distribution. Signup and view all the answers

Match the type of risk with its description:

Human = Illness or loss of key individual Operational = Disruption to supplies and operations Reputational = Loss of customer or employee confidence Financial = Stock market fluctuations or business failure Signup and view all the answers

Study Notes

Understanding Risk

Risk encompasses hazards, dangers, perils, and exposure to potential loss or injury.
It includes both physical risks and financial business risks, with uncertainties in economic outcomes.
Defined by Business Dictionary as the probability of adverse occurrences due to vulnerabilities.
UNTWO describes risk as situations exposing individuals or entities to danger or loss.

Risk Management

ISO 31000 defines risk management as identifying, evaluating, and prioritizing risks.
Addresses the inevitable nature of risk in business, emphasizing the need for careful study and evaluation.
Prioritization is essential to determine the most critical risks to address promptly.

Importance of Risk Management

Barry Boehm highlights that risk management directs project managers’ focus on trouble-prone areas.
Risks impact all aspects of a project, including budget, schedule, and quality.
The main goal is to enhance positive outcomes while minimizing negative ones.
Many organizations neglect formal risk management, leading to continuous crisis management instead.

Sources of Risks

Uncertainty in financial markets can jeopardize organizational stability.
Project failures and legal liabilities pose significant threats.
Various risks include accidents, natural disasters, adversarial attacks, and unpredictable events.

Workplace Risk Classification

Risks are categorized into low, average, and high based on hazard assessment (HIRAC).
Low-risk environments have minimal exposure to hazards and lower potential harm.
Average-risk workplaces present moderate exposure but can be mitigated with planning and control measures.
High-risk environments pose serious threats to both workers and external individuals due to significant hazards.

Risk Analysis

A vital tool to identify and manage potential problems affecting business initiatives or projects.
Involves complex data collection, including project plans, financial data, and more.
Key in preventing time loss, financial detriment, and reputational damage.

Situations for Risk Analysis Application

Planning projects to foresee and counter potential issues.
Evaluating the feasibility of moving forward with projects.
Enhancing safety protocols and managing workplace risks.
Preparing for potential disruptions, such as equipment failure or natural disasters.
Adapting to market changes or shifts in government policies.

Steps in Risk Analysis

Identify existing and potential threats from various sources:
- Human: Loss of key individuals due to illness or injury.
- Operational: Disruptions in supply chains or operations.
- Reputational: Loss of confidence among customers or damage to reputation.
- Procedural: Failures in internal controls or accountability systems.
- Project: Budget overruns or delays in key tasks.
- Financial: Business failures, fluctuations in the market, or funding issues.
- Technical: Risks from technological advancements or failures.
- Natural: Impacts from weather or natural disasters.
- Structural: Hazardous conditions affecting personnel or technology.
- Political: Changes in policies or public opinion that influence business.

Strategies for Risk Management

Cultivate a strong risk culture within the organization.
Systematically identify risks pertinent to operations.

Description

This quiz covers the concept of risk as defined in various contexts, including its implications for hazards, property loss, and financial exposure. It provides an overview of risk management principles and preventive measures. Ideal for students studying Tourism and Risk Management.