Impact of Risk on Organisations

Question 1

To which areas can risk be attached?

Answer 1

1. Core processes
2. Key dependencies
3. Objectives
4. Stakeholder expectations

Question 2

What are the benefits of attaching risks to corporate objectives?

Answer 2

1. Risk can be analysed in relation to the positive and uncertain aspects of events that can occur.
2. The negative and compliance aspects to achieving corporate objectives can be analysed.

Question 3

What are the disadvantages of attaching risks to corporate objectives?

Answer 3

1. Too high level - business objectives are often stated at too high a level which can prevent a robust risk recognition and identification.
2. Risks considered outside of context - risks may be considered separately to the situation that led to them and will not enable considered evaluation - risks considered outside of context.

Question 4

What are the benefits of attaching risks to key dependencies?

Answer 4

1. SWOT analysis - Identify the strengths, weaknesses, opportunities and threats associated with the key dependencies.
2. Precise risk identification - once a key dependency has been identified, risks in relation to them can be assessed.

Question 5

What are the benefits of attaching risks to core processes?

Answer 5

1. Business model and STOC - core processes are a key part of the business model and can relate to STOC.
2. Effective and efficient - Risk management activities can be directed to make core processes effective and efficient.