Fuentes, Nervie Mae L.

1. HOW TO APPLY THE ANALYTICAL PROCESS IN MANAGING RISKS IN A BUSINESS ENTERPRISE.

- In order to perform a risk analysis, you must first identify the potential risks you face,
then calculate their potential effects, and then calculate the possibility that these threats
will come to pass.
- Risk analysis may be challenging since you'll need to use a variety of specific facts,
including project plans, financial information, security standards, marketing projections,
and other pertinent data. It is a crucial planning tool, though, because it has the potential
to preserve resources like time, money, and reputations.
2. EXPLAIN WHY RISKS BECOME REALITY. (Cite an example)
- In 2020, the world witnessed what happens when risks become reality. Around 150 million
COVID-19 cases have been officially confirmed globally, and the disease has claimed nearly 3
million lives. The steps required to combat the virus have caused the highest yearly decline
in economic production, which has particularly hurt the most vulnerable. These efforts have
also led to widespread job losses and a terrible increase in both global poor and severe
poverty. To build forward better, we must begin by learning the lessons of this crisis and
previous ones.
3. DESCRIBE THE STEPS IN THE RISK MANAGEMENT PROCESS (cite an example)
Step 1. Set up a separate risk management committee chaired by a board member.
Step 2. Ensure that a formal comprehensive risk management system is in place.
Step 3. Assess whether the formal system possesses the necessary elements.
Step 4. Evaluate the effectiveness of the various steps in the assessment of the comprehensive
risks faced by the business firm.
Step 5. Assess if management has developed and implemented the suitable risk management
strategies and evaluate their effectiveness.
Step 6. Evaluate if management has designed and implemented risk management capabilities.
Step 7. Assess management’s efforts to monitor overall company risk management performance
and to improve continuously the firm’s capabilities.
Step 8. See to it that best practices as well as mistakes are shared by all. This
involves regular communication of results and feedbacks to all concerned.
Step 9. Assess regularly the level of sophistication of the firm’s risk management system.
Step Hire experts when needed.
4. What are the basic principles of Risk mgt.?
-- Create value – resources spent to mitigate risk should be less that the consequence
of in action, i.e., the benefit should exceed the costs.
- Address uncertainty and assumptions
- Be an integral part of the organizational process and decision-making
- Be dynamic, iterative, transparent, tailorable, and responsive to change
- Create capability of continual improvement and enhancement considering the best
available information and human factors
- Be systematic, structured and continually or periodically reassessed
5. How does ISO 31000 DEFINE RISK MGT.?
- Risk management is defined by ISO 31000 as "coordinated activities to direct and control
and organization with regard to risk," whereas risk is defined as "The effect of uncertainty
on objectives."