ARM 402 Chapter 9 - Part 1
Study online at https://quizlet.com/_dvieof
1. The key to a company's successful strategies is:: Intelligent risk taking.
2. There are many techniques you can use to define risk when forming a
strategy, including:: SWAT analysis.
3. The higher risk you accept, on average:: The higher the return.
4. When analyzing risk, you should take into account senior management's:: -
Risk appetite. i.e. how much risk is management willing to take, in order to enhance
the odds of achieving a target return.
5. These items are essential for establishing a risk management plan:: Com-
munication and collaboration.
6. Team approaches, such as facilitated workshops, are particularly effective
for:: Involving the business managers in the treatment of strategic risks, such as
those involving a new product or acquisition.
7. As your strategy's implemented, it's important to:: Monitor and control risk to
the extent possible.
8. For example, when considering an acquisition, you should determine the
effect of:: The new business on your risk profile.
9. And you should consider the risks involved with:: Implementation.
10. To fully protect its position in the marketplace and maximize opportunities
for growth, a company needs:: A holistically informed decision-making process.
11. This requires the company to identify and analyze strategic risks that can
affect, positively or negatively:: Its long-term performance.
12. Assessing strategic risks effectively can ensure the company:: Protects
its assets and reputation, by making strategic decisions that avoid or mitigate the
consequences of negative risks, and improve its financial position by maximizing
gains from opportunities.
13. Put simply, strategic risks are:: Any factors that could affect the business.
14. Strategic risks include:: The upside and downside associated not only with a
business strategy itself, but also with the implementation of a strategy.
15. Strategic risks can be created and affected by external factors such as:: -
Economic conditions, consumer demand, or government regulations, or by internal
factors such as a company's structure, culture, or processes.
16. Because strategic risks may have far reaching ramifications that can alter
the course of a company's future:: Illustrating their importance can be an effective
tool in convincing decision makers of the value of a holistic risk management
program.
17. Operational and credit risk can be problematic, but they're overshadowed
by the potential negative impact of:: A major strategic risk.
18. It's best for companies to approach strategic risks with an eye toward
both:: Preventing problems and exploiting opportunities.
1/5
, ARM 402 Chapter 9 - Part 1
Study online at https://quizlet.com/_dvieof
19. The process of identifying and analyzing strategic risks should also extend
beyond what might cause a single strategy to succeed or fail, to account
for:: Risks that could affect the company's long-term health.
20. The goal of strategic risk assessment is:: To accurately determine whether a
particular business decision is worth the risk.
21. People often confuse strategic risk with operational risk, but here's a good
way to distinguish the two. With operational risks:: The focus is on making sure
that things, whether they are products or processes, are done right.
22. With strategic risks, the focus is on:: Doing the right things, and making the
right decisions to ensure the company achieves its strategic goals.
23. Knowing the factors that can create and affect strategic risks will help risk
professionals:: Identify and assess the risks that create the biggest threats to or
opportunities for strategic goals.
24. Strategic risk intersects with the other risk quadrants, hazard, operational,
and financial.: Strategic risks can be created or affected by factors associated with
the other risk quadrants.
25. Strategic risks are often associated with:: External factors that are beyond a
single company's control, such as shifts in consumer demand, changes in regula-
tions, financial crises, inflation, changes in the labor market, competitive pressures,
societal shifts, politics, and international trade agreements or restrictions.
26. However, strategic risks can also arise from:: Internal factors such as busi-
ness decisions, business policies and processes, hiring practices, resource alloca-
tion, culture, and stakeholder pressure.
27. Strategic risks can even be created or affected by factors associated with
the other risk quadrants. For example:: Safety and fire threats, AKA hazard risks,
cybersecurity threats, AKA operational risks, and credit availability and investment
performance, AKA financial risks, can affect strategic decisions and the ability to
gain market share.
28. Some types of strategic risks are:: Competition and innovation risk. Liquidity
and financial risk. Acquisition and economic risk. Marketing risk. Foreign economic
risk. Procurement risk. Regulatory risk.
29. Competition and innovation risk: Apple changes the operating system
used in its devices, cell phones, tablets, computers, in an attempt to differen-
tiate its products from the competition:: Potential negatives: Customers dislike
the new operating system and switch to a competitor. Potential positives: Customers
view the new operating system as superior to the competition and increase demand.
30. Liquidity and financial risk: Chilis opens two new locations in the same city
using its own capital:: Potential negatives: Liquidity risk develops if the restaurants
fail and the buildings can't be sold right away. Potential positives: Increased demand
2/5
Study online at https://quizlet.com/_dvieof
1. The key to a company's successful strategies is:: Intelligent risk taking.
2. There are many techniques you can use to define risk when forming a
strategy, including:: SWAT analysis.
3. The higher risk you accept, on average:: The higher the return.
4. When analyzing risk, you should take into account senior management's:: -
Risk appetite. i.e. how much risk is management willing to take, in order to enhance
the odds of achieving a target return.
5. These items are essential for establishing a risk management plan:: Com-
munication and collaboration.
6. Team approaches, such as facilitated workshops, are particularly effective
for:: Involving the business managers in the treatment of strategic risks, such as
those involving a new product or acquisition.
7. As your strategy's implemented, it's important to:: Monitor and control risk to
the extent possible.
8. For example, when considering an acquisition, you should determine the
effect of:: The new business on your risk profile.
9. And you should consider the risks involved with:: Implementation.
10. To fully protect its position in the marketplace and maximize opportunities
for growth, a company needs:: A holistically informed decision-making process.
11. This requires the company to identify and analyze strategic risks that can
affect, positively or negatively:: Its long-term performance.
12. Assessing strategic risks effectively can ensure the company:: Protects
its assets and reputation, by making strategic decisions that avoid or mitigate the
consequences of negative risks, and improve its financial position by maximizing
gains from opportunities.
13. Put simply, strategic risks are:: Any factors that could affect the business.
14. Strategic risks include:: The upside and downside associated not only with a
business strategy itself, but also with the implementation of a strategy.
15. Strategic risks can be created and affected by external factors such as:: -
Economic conditions, consumer demand, or government regulations, or by internal
factors such as a company's structure, culture, or processes.
16. Because strategic risks may have far reaching ramifications that can alter
the course of a company's future:: Illustrating their importance can be an effective
tool in convincing decision makers of the value of a holistic risk management
program.
17. Operational and credit risk can be problematic, but they're overshadowed
by the potential negative impact of:: A major strategic risk.
18. It's best for companies to approach strategic risks with an eye toward
both:: Preventing problems and exploiting opportunities.
1/5
, ARM 402 Chapter 9 - Part 1
Study online at https://quizlet.com/_dvieof
19. The process of identifying and analyzing strategic risks should also extend
beyond what might cause a single strategy to succeed or fail, to account
for:: Risks that could affect the company's long-term health.
20. The goal of strategic risk assessment is:: To accurately determine whether a
particular business decision is worth the risk.
21. People often confuse strategic risk with operational risk, but here's a good
way to distinguish the two. With operational risks:: The focus is on making sure
that things, whether they are products or processes, are done right.
22. With strategic risks, the focus is on:: Doing the right things, and making the
right decisions to ensure the company achieves its strategic goals.
23. Knowing the factors that can create and affect strategic risks will help risk
professionals:: Identify and assess the risks that create the biggest threats to or
opportunities for strategic goals.
24. Strategic risk intersects with the other risk quadrants, hazard, operational,
and financial.: Strategic risks can be created or affected by factors associated with
the other risk quadrants.
25. Strategic risks are often associated with:: External factors that are beyond a
single company's control, such as shifts in consumer demand, changes in regula-
tions, financial crises, inflation, changes in the labor market, competitive pressures,
societal shifts, politics, and international trade agreements or restrictions.
26. However, strategic risks can also arise from:: Internal factors such as busi-
ness decisions, business policies and processes, hiring practices, resource alloca-
tion, culture, and stakeholder pressure.
27. Strategic risks can even be created or affected by factors associated with
the other risk quadrants. For example:: Safety and fire threats, AKA hazard risks,
cybersecurity threats, AKA operational risks, and credit availability and investment
performance, AKA financial risks, can affect strategic decisions and the ability to
gain market share.
28. Some types of strategic risks are:: Competition and innovation risk. Liquidity
and financial risk. Acquisition and economic risk. Marketing risk. Foreign economic
risk. Procurement risk. Regulatory risk.
29. Competition and innovation risk: Apple changes the operating system
used in its devices, cell phones, tablets, computers, in an attempt to differen-
tiate its products from the competition:: Potential negatives: Customers dislike
the new operating system and switch to a competitor. Potential positives: Customers
view the new operating system as superior to the competition and increase demand.
30. Liquidity and financial risk: Chilis opens two new locations in the same city
using its own capital:: Potential negatives: Liquidity risk develops if the restaurants
fail and the buildings can't be sold right away. Potential positives: Increased demand
2/5
