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Capdata is a small software writing business located in the south of Ireland and employing four employees - Leaving Cert Business - Question B - 2001
Question B
Capdata is a small software writing business located in the south of Ireland and employing four employees. It has the opportunity to grow but has little experience o... show full transcript
Worked Solution & Example Answer:Capdata is a small software writing business located in the south of Ireland and employing four employees - Leaving Cert Business - Question B - 2001
Step 1
Describe what is meant by Risk Management.
Answer
Risk management refers to the process of identifying, assessing, and mitigating risks that may adversely affect an organization's ability to achieve its goals. The key components of risk management include:
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Risk Identification: Identifying potential risks that could impact the business, which can arise from various sources such as financial uncertainty, legal liabilities, strategic management errors, accidents, or natural disasters.
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Risk Assessment: Evaluating the identified risks to understand their potential impact and likelihood. This often involves categorizing risks into different types (e.g., operational, financial, reputational) and determining their significance.
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Risk Mitigation: Developing strategies to manage and mitigate the risks. This can involve avoiding the risk, reducing its impact or likelihood, transferring the risk (e.g., through insurance), or accepting it if it falls within the organization's risk tolerance.
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Risk Monitoring and Review: Continuously monitoring risks and reviewing the risk management strategies to ensure they remain effective and relevant over time.
Step 2
Illustrate a method that 'Capdata' could use to reduce risks to the business.
Answer
One effective method 'Capdata' could implement to reduce risks is by establishing a comprehensive Business Continuity Plan (BCP). This plan outlines procedures to follow in the event of a disruption, such as a technology failure or loss of key personnel.
Key Elements of a Business Continuity Plan:
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Risk Assessment: Begin by identifying the various risks that could affect Capdata, including data breaches, software failures, or changes in market conditions.
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Emergency Response Procedures: Develop a clear action plan for responding to different types of emergencies. This includes designating roles and responsibilities for employees during a crisis.
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Backup Systems: Ensure that all data is regularly backed up using reliable systems to prevent loss of critical information.
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Training and Drills: Regularly train employees on the BCP and conduct drills to ensure everyone knows how to implement the plan.
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Review and Update: The BCP should be regularly reviewed and updated to adapt to any changes in the business environment.
By having a solid Business Continuity Plan in place, Capdata can significantly reduce risks associated with operational disruptions and ensure a quicker recovery.