Risk and uncertainty

• Risk is the possibility or probability that things don't happen as you wish that they would
• What is the primary goal of risk management in business?

  Reduce potential damage
• Risk and uncertainty are identical concepts in business.

  False
• What is the main characteristic of uncertainty in business?

  Unpredictable factors
• Uncertainty arises because there are factors outside of your control
• Why is cyber security a major risk for businesses?

  Loss of sensitive data
• Businesses can eliminate all risks by taking precautions.

  False
• What is a common risk associated with supply chain management?

  Supply chain shocks
• Shocks to the supply chain can include changes in the availability of containers
• How can businesses reduce uncertainty about customer responses to price changes?

  Market research
• Steps businesses take to manage uncertainty

  1️⃣ Identify potential uncertainties

  2️⃣ Gather information

  3️⃣ Analyze data

  4️⃣ Develop strategies
• What is a key uncertainty faced by labor-intensive businesses at the start of each year?

  Employee retention
• Uncertainty is a major concern for businesses but cannot be managed effectively.

  False
• What is the main goal of environmental compliance for businesses?

  Avoid environmental damage
• Cybercrime poses a growing threat to business systems.
• Match the concept with its description:

  Risk ↔️ Probability of bad outcomes

  Uncertainty ↔️ Factors outside control
• Why is it important for new businesses to understand their breakeven output?

  Reduce uncertainty