Question

Select from the choices below the activity which is the best example of the deliberate level of Risk Management.

a) Conducting a comprehensive risk assessment
b) Implementing immediate corrective actions
c) Responding to an unexpected crisis
d) Creating long-term risk mitigation strategies

Answer 1

Conducting a comprehensive risk assessment is the best example of the deliberate level of Risk Management, where an organization proactively identifies and prepares for potential risks to avoid catastrophic outcomes as outlined in Figure 20.1.The correct answer is option A.

Step-by-step explanation:

The activity that is the best example of the deliberate level of Risk Management is a) Conducting a comprehensive risk assessment. This level of risk management involves a proactive and systematic approach to identifying, assessing, and preparing for potential risks before they occur.

By conducting a comprehensive risk assessment, an organization can understand the potential impact of risks and develop long-term risk mitigation strategies to prevent or minimize the consequences.

Referring to Figure 20.1, which discusses asymmetric risk in the face of a potential devastating threat, it emphasizes choosing between a natural response (Plan A) and a conservative one (Plan B) for mitigating the threat.

The deliberate level of risk management is akin to developing Plan B, where the organization opts not to rely on luck but instead prepares conservatively to avoid catastrophic outcomes even if it means accepting some lesser, non-ideal consequences.The correct answer is option A.