Types of Risk in Tourism and Hospitality
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Questions and Answers

What type of risk is related to the production process and can result from inadequate internal processes?

  • Knowledge Risk
  • Financial Risk
  • Operational Risk (correct)
  • Unforeseeable Risk
  • Which risk type cannot be accurately forecast prior to its occurrence?

  • Unforeseeable Risk (correct)
  • Operational Risk
  • Change Risk
  • Knowledge Risk
  • Which type of risk includes market, credit, and capital structure risks?

  • Financial Risk (correct)
  • Internal Risk
  • Speculative Risk
  • Operational Risk
  • What type of risk arises from changes imposed by variations either within or outside the organization?

    <p>Change Risk</p> Signup and view all the answers

    Knowledge risk primarily involves which aspect of an organization?

    <p>Information management</p> Signup and view all the answers

    What defines knowledge risk in an organization?

    <p>A disruption of access to information</p> Signup and view all the answers

    Which of the following is classified as an internal risk?

    <p>Operational process risk</p> Signup and view all the answers

    How can external risks be described in relation to an organization?

    <p>Generally outside the control of the organization</p> Signup and view all the answers

    What type of risk can lead to both gain and loss?

    <p>Speculative risk</p> Signup and view all the answers

    Which of the following best describes speculative business risk?

    <p>Arises from the company's trading activities</p> Signup and view all the answers

    Study Notes

    Types of Risk in Tourism and Hospitality

    • Change risk affects strategic, operational, and project levels; can be imposed or planned to meet objectives (e.g., installing a new production line due to increased demand).

    Operational Risk

    • Defined as the risk of loss from inadequate or failed processes, people, systems, or external events.
    • Encompasses factors that impact organizational performance and value creation.

    Unforeseeable Risk

    • Cannot be accurately forecast; can arise suddenly (e.g., natural disasters).
    • Can be mitigated by transferring risk through insurance contracts.

    Financial Risk

    • Includes market, credit, capital structure, and reporting risks.
    • Examples include potential losses for shareholders due to company debt or defaults on bonds resulting in investor losses.

    Knowledge Risk

    • Relates to information management involving IT hardware, software, and planning.
    • Organizations face threats such as hacking and espionage as IT use increases.
    • Distinction between knowledge risk (disruption of information access) and IT risk (disruption to information technology).

    Internal and External Risks

    • Internal Risks: Originate within an organization, relatively controllable (e.g., employee fraud).
    • External Risks: Arise from environmental factors, generally uncontrollable (e.g., new competitors like Microsoft entering markets).

    Comparison of Internal and External Risks

    • External risks include interest rate, volatility, competitor, political, and legislative risks.
    • Internal risks encompass operational processes, legal, liquidity, competence, and technology risks.

    Speculative and Static Risks

    • Speculative risks may yield gains or losses, with outcomes being positive or negative (e.g., betting).
    • Divided into speculative business risk (operational trading risk) and financial risk.

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    Description

    Explore the various types of risks that impact the tourism and hospitality industry. This quiz covers change risk, operational risk, unforeseeable risk, financial risk, and knowledge risk, providing insights into how these factors affect organizational performance and decision-making. Test your understanding of these crucial concepts in risk management.

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