BUISENESS MANAGEMENT
RISK MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Operational process, corporate environment and the affecting factors
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Operational process only
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The affecting factors and regulations only
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No need to understand others, it just needs to understand the operational risk
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Detailed explanation-1: -Operational risk is the risk of losses caused by flawed or failed processes, policies, systems or events that disrupt business operations. Employee errors, criminal activity such as fraud, and physical events are among the factors that can trigger operational risk.
Detailed explanation-2: -All operational risks can now be traced to four basic causes viz. people, processes, systems, and external events.
Detailed explanation-3: -In this chapter, we discuss the three pillars of operational risk management: capital allocation, transfer of operational risk through insurance, and proactive mitigation of operational risk through product inspection and quality control.
Detailed explanation-4: -Operational risk is the risk of loss resulting from ineffective or failed internal processes, people, systems, or external events that can disrupt the flow of business operations. The losses can be directly or indirectly financial.