CRM Principles of Risk Management Exam
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Terms in this set (55)
1. protects organization's reputation/brand
Explain the impacts of an 2. Increases profitability
effective Risk 3. Raises awareness of risk management
Management program on 4. supports managerial objective
an organization (6) 5. Improves morale and productivity
6. Improves quality, process and technology
Define Traditional Risk a functional, siloed, view of risk affecting one or more
Management (TRM). areas of the organization (focuses on pure risk)
Define Enterprise Risk across functional view of risks affecting all areas of
Management (ERM). the entire organization (embraces speculative risk)
1. manages downside risks
2. oriented to cause-of-loss, tied to minimizing risk
Describe characteristics of impact
Traditional Risk 3. functional siloed treatement of risk
Management (TRM) (5) 4. risk ID and ownership with individual employee or
department
5. Reactive
, 1) risk has potential upside and downside
2) tied to strategic objectives
Describe characteristics of
3) cross functional treatment of risk
Enterprise Risk
4) uses subject matter experts and risk committees to
Management (ERM) (5)
identify risk and spreads accountability of risk
5) proactive/opportunistic
1.Operational Risk: related to management activities
(speculative)
2) Financial Risk: related to financial activities
List the ERM broad
(speculative)
categories of risk and give
examples of each (4).
3) Hazard Risk: covered by insurance (pure)
4) Strategic Risk: related to an organization's strategic
plan (speculative)
a set of understandings, knowledge, beliefs, values
Define Organizational Risk
and habits toward risk, that characterize a human
Culture (ORC).
group (organization) in search of a common purpose
1. Tone at the top - leadership clarity of direction and
a positive corporate attitude toward risk
2. Corporate Governance - clear responsibility for risk
management; transparency and timeliness of risk
Explain the four information
characteristics of an 3. Decision Making - well informed decisions
effective ORC(4). regarding risk; performance evaluations encourage
good risk management decisions
4. Authority and Accountability - embedding risk
management abilities and responsibilities within the
organization.
Questions & Answers | 100% Verified solutions
|Questions with Correct Answers 2025 latest
update!!
Save
Terms in this set (55)
1. protects organization's reputation/brand
Explain the impacts of an 2. Increases profitability
effective Risk 3. Raises awareness of risk management
Management program on 4. supports managerial objective
an organization (6) 5. Improves morale and productivity
6. Improves quality, process and technology
Define Traditional Risk a functional, siloed, view of risk affecting one or more
Management (TRM). areas of the organization (focuses on pure risk)
Define Enterprise Risk across functional view of risks affecting all areas of
Management (ERM). the entire organization (embraces speculative risk)
1. manages downside risks
2. oriented to cause-of-loss, tied to minimizing risk
Describe characteristics of impact
Traditional Risk 3. functional siloed treatement of risk
Management (TRM) (5) 4. risk ID and ownership with individual employee or
department
5. Reactive
, 1) risk has potential upside and downside
2) tied to strategic objectives
Describe characteristics of
3) cross functional treatment of risk
Enterprise Risk
4) uses subject matter experts and risk committees to
Management (ERM) (5)
identify risk and spreads accountability of risk
5) proactive/opportunistic
1.Operational Risk: related to management activities
(speculative)
2) Financial Risk: related to financial activities
List the ERM broad
(speculative)
categories of risk and give
examples of each (4).
3) Hazard Risk: covered by insurance (pure)
4) Strategic Risk: related to an organization's strategic
plan (speculative)
a set of understandings, knowledge, beliefs, values
Define Organizational Risk
and habits toward risk, that characterize a human
Culture (ORC).
group (organization) in search of a common purpose
1. Tone at the top - leadership clarity of direction and
a positive corporate attitude toward risk
2. Corporate Governance - clear responsibility for risk
management; transparency and timeliness of risk
Explain the four information
characteristics of an 3. Decision Making - well informed decisions
effective ORC(4). regarding risk; performance evaluations encourage
good risk management decisions
4. Authority and Accountability - embedding risk
management abilities and responsibilities within the
organization.
