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SHRM-CP WORKPLACE Questions - Part 14
1. Management decides that training supervisors to identify and prevent bullying is not necessary, and they do not fund a program budget. What does this illustrate?
A) Risk avoidance management strategy
B) Precedence of global standardization in the organization
C) Organization's risk tolerance Β
D) Poor governance
2. Which best demonstrates HR's role in managing organizational risk?
A) Identifying past and current risks and avoiding those risks that affect the HR function
B) Following management's lead in identifying, prioritizing, and managing risks within the HR function
C) Defining the risk level that the organization is willing and able to assume
D) Participating in the identification and management of threats and opportunities across the organization
3. Identify and Analyze Risk Which factors are used when determining an organization's risk level?
A) Awareness of risk management principles at all levels of management
B) Probability of occurrence of a threat and the threat's impact
C) Assessment of third parties such as insurers
D) Likelihood of financial, operational, and reputational risk
4. An organization examines the level of probability for all types of losses to which it may be exposed. What aspect of risk is the organization studying?
A) Risk tolerance
B) Mitigation planning
C) Vulnerability
D) Impact
5. What is the usefulness of a key risk indicator (KRI)?
A) Identifies a global assessment of organizational exposure to risk
B) Establishes greater accountability of risk control measures
C) Provides early warning of organizational risk emergence
D) Assists in preventing the emergence of identified risks
A) Risk avoidance management strategy
B) Precedence of global standardization in the organization
C) Organization's risk tolerance Β
D) Poor governance
2. Which best demonstrates HR's role in managing organizational risk?
A) Identifying past and current risks and avoiding those risks that affect the HR function
B) Following management's lead in identifying, prioritizing, and managing risks within the HR function
C) Defining the risk level that the organization is willing and able to assume
D) Participating in the identification and management of threats and opportunities across the organization
3. Identify and Analyze Risk Which factors are used when determining an organization's risk level?
A) Awareness of risk management principles at all levels of management
B) Probability of occurrence of a threat and the threat's impact
C) Assessment of third parties such as insurers
D) Likelihood of financial, operational, and reputational risk
4. An organization examines the level of probability for all types of losses to which it may be exposed. What aspect of risk is the organization studying?
A) Risk tolerance
B) Mitigation planning
C) Vulnerability
D) Impact
5. What is the usefulness of a key risk indicator (KRI)?
A) Identifies a global assessment of organizational exposure to risk
B) Establishes greater accountability of risk control measures
C) Provides early warning of organizational risk emergence
D) Assists in preventing the emergence of identified risks
1. Right Answer: C
Explanation: Management has decided that it is willing to accept the risk that bullying will occur and possible organizational costs. This is an example of an organization's risk tolerance, the amount of unmanaged risk that management is willing to accept.
2. Right Answer: D
Explanation: The best role for HR is one that is proactive, not reactive, and that considers risk from an integrated enterprise perspective. The definition of risk appetite and risk tolerance is best made by senior management, however.
3. Right Answer: B
Explanation: The concept of a risk level includes the likelihood that a threat will occur and the impact of this occurrence on the organization.
4. Right Answer: C
Explanation: Vulnerability refers to the degree of probability that a loss will occur. Impact is the possible effect on the organization, and tolerance is the amount of risk the organization can handle if an event occurs. Mitigation planning occurs after analysis of probability, risk, and speed of onset.
5. Right Answer: C
Explanation: A KRI signals when risk exposure may be increasing. It can be used to identify emerging risks to the organization. KRIs monitor risk but do not prevent risks from occurring. They are not enough in themselves to create transparency and accountability.
Explanation: Management has decided that it is willing to accept the risk that bullying will occur and possible organizational costs. This is an example of an organization's risk tolerance, the amount of unmanaged risk that management is willing to accept.
2. Right Answer: D
Explanation: The best role for HR is one that is proactive, not reactive, and that considers risk from an integrated enterprise perspective. The definition of risk appetite and risk tolerance is best made by senior management, however.
3. Right Answer: B
Explanation: The concept of a risk level includes the likelihood that a threat will occur and the impact of this occurrence on the organization.
4. Right Answer: C
Explanation: Vulnerability refers to the degree of probability that a loss will occur. Impact is the possible effect on the organization, and tolerance is the amount of risk the organization can handle if an event occurs. Mitigation planning occurs after analysis of probability, risk, and speed of onset.
5. Right Answer: C
Explanation: A KRI signals when risk exposure may be increasing. It can be used to identify emerging risks to the organization. KRIs monitor risk but do not prevent risks from occurring. They are not enough in themselves to create transparency and accountability.
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