Module 3 - Only Self Assesment Issues Flashcards Preview

IRM - Module 2 - Risk & Organisations > Module 3 - Only Self Assesment Issues > Flashcards

Flashcards in Module 3 - Only Self Assesment Issues Deck (28)
Loading flashcards...
0

Classical decision theory makes what assumptions

Decision makers are objective
Have complete information
Consider all possible alternatives

1

Herbert Simon approach to decision making involves what steps

Intelligence (is there a problem)
Design (what are the alternatives)
Choice
Implementation

2

Define bounded rationality

Individuals make decisions by coati ting simple models that extract the essential features from problems without capturing all their complexity

3

Types of decision theory

Normative - how decisions should be made
Descriptive - how people actually make decisions
Prescriptive - how decisions should be made in realistic settings

4

Define personality

Those relatively stable and enduring aspects of individuals that distinguish them from other people, making them unique, but which at the same time allow people to be compared to each other.

5

Personality can be described by 5 broard factors

Extroversion
Agreeableness
Conscientiousness
Emotional stability
Openness

6

Define the 3 risk attitudes

Risk adverse

Risk neutral - reacts in line withy the risk probability

Risk seeking

7

Risk belief define

The psychological state in which an individual is convinced of the truth of a proposition

8

Describe the perception process

Stimulus
Selective attention (reduce information)
Perceptual organisation (classify or group similar stimuli together)
Response

9

Define closure in terms if perception

Closures is when we fill in the gaps for incomplete or ambiguous information

10

Define judgement

The cognitive process of reaching a decision or drawing conclusions

11

Define heuristic

A rule of thumb strategy intended to increase the chances of quickly solving a problem

12

Define 5 types of heuristic

Anchor and adjustment - judgement made from an initial value (anchor)

Availability - base judgements of probability on the basis of information that is readily available

Related representative - base judgement in things that are familiar

Overconfidence

Framing

13

Define three effects of heuristics

Recent events get more weight

Events that aren't understood are viewed as more concerning

Close events viewed as more worrying than far off events

14

Define 3 individual predictors of risk behaviour

Risk preferences
Risk perceptions
Risk propensity

15

Define 4 characteristics of organisational risk behaviour

Group composition
Cultural risk values
Leader risk orientation
Organisational control systems

16

Define 2 characteristics of problem solving risk behaviour

Probably familiarity
Problem framing (in what context is the problem given)

17

Define risk propensity

The general likelihood of a person behaving in a more or less risky way

18

Define risk perception

Risk perception describes the way in which a stakeholder views a risk based upon a set of values or concerns.

19

Discuss the 1 extremes of the risk philosophy line

"Techno scientific" sees risk as an objective phenom omen and undertake rational approaches e.g. Measurement and calculation.

Relativist sees risk as a social / psychological construction

20

Define the 3 types of business model for firms engaged in risk management

The pure risk control model
The efficiency replacement model
The risk transformation model

21

Defined business risk culture

The shared way of thinking and acting on perceived organisational risks

22

Three methods for deriving probabilities

A priori
Relative frequency
Subjective

23

Define 2 types of people involves with risk

Organisers - more control is better

Behaviourists - continuously trying to increase control is self defeating

24

Define the standard risk management process (RMP)

Set goals and establish content
Identify risks
Analyse risks
Evaluate risks
Treat risks

25

Define the main factors when describing a risk

Name of risk
Scope of risk
Nature of risk (strategic , operational etc.
Stakeholders

26

Distinguish between estimation and valuation and measurement and analysis

Estimation and evaluation are qualitative

Measurement and analysis are quantitative

27

Describe the Delphi method

Experts are taken through a process of considering an issue, commenting on that issue, reviewing and reacting to the comments of other experts and revising to a final view