3. Establishing the context Flashcards
(16 cards)
Outputs to the process of establishing the context is ….
Stage findings
The overall performance of a business must be reviewed by looking at the business … also known as the SWOT analysis.
Strengths, weaknesses, opportunities and threats
The PEST analysis, which stands for …, can be used to look at the market, in which the business operates.
Political, economic, social and technology factors
The primary objective of a business is to maximise the … of its shareholders (owners).
Wealth
The … will be the criteria against which the business strategy’s success will be measured.
Business objectives
The … should show how the business would achieve its objectives by looking at all the factors that might have an impact on the business.
Business plan.
The … in which a business operates must be embedded in the business operations.
Regulatory framework
The … is a basic conceptual structure used to address the risks faced by an organisation.
Risk management framework
To succeed in the long term, enterprises must comply with the … of the societies in which they operate.
Laws, regulations & expectations
What are the four process mechanisms used in the first stage to obtain information on the business:
- Financial ratios
- Risk management process diagnostics
- SWOT analysis
- PEST analysis
What are three inputs in the process to establish context:
- Business plan
- Business process map
- Business objectives
What is the first stage of ERM:
Establishing the context
… are used to look at the financial position and performance of a business.
Financial ratios
(1)… is usually seen as a short-term objective, whereas (2)… is a long-term objective.
(1) Profit maximization
(2) Wealth maximization
… can be used to define businesses that are continuously exposed to greater, more complex and diverse (of various kinds or forms) and dynamic risks.
Risk diversity
(1)… refers to the tendency to engage in behaviours that have the potential to be (2)…, yet at the same time provide the opportunity for some kind of outcome that can be perceived as positive.
(1) Risk-taking
(2) Harmful or dangerous
