Course Content
A critical thinking approach
We all make decisions and solve problems each day – in both our personal lives and workplaces. Some decisions are quick and easy to make. Perhaps the problem or issue you encounter is a familiar one that has a tried and tested solution. However, often times the solution to your issue is not straight forward and its resolution requires more than your intuition. Some decisions you make are critical, whereas others are non-critical.
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Making and reviewing decisions
Making and reviewing critical decisions is vital because it directly impacts outcomes in personal and professional life. Thoroughly assessing options, risks, and potential consequences helps avoid costly mistakes and achieve goals effectively. Regularly reviewing decisions ensures ongoing relevance and adaptability, particularly in dynamic environments. It promotes learning from past experiences and allows for necessary adjustments, enhancing decision-making skills and the ability to navigate complex situations successfully.
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Assessment assistance
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BSBCRT611 Apply critical thinking for complex problem solving
About Lesson

What types of risks are there to an organisation? Who is responsible for addressing the risks and reducing their effects or impact on the organisation.

Following this lesson, complete the activities on page 12 of your student workbook before commencing the next topic. Note that your work here does not have to be handed in to an assessor. It is purely to develop your skills in defining issues and associated risks.

You can make comments or ask questions on the Student forum to see what others think. 

 

Further reading

Here’s a breakdown of the four main categories mentioned in the video/ 

1. Strategic Risk:

  • Focus: These risks stem from decisions made at the highest levels, impacting the overall direction and goals of the organisation.
  • Examples: Failing to adapt to changing customer preferences, overlooking disruptive technologies, or entering new markets without proper planning.
  • Impact: Strategic risks can lead to a loss of market share, decreased profitability, and even organisational decline.

 

2. Compliance Risk:

  • Focus: These risks arise from failing to comply with relevant laws, regulations, and industry standards.
  • Examples: Violating data privacy regulations, neglecting safety protocols, or ignoring environmental regulations.
  • Impact: Compliance risks can result in hefty fines, legal repercussions, reputational damage, and operational disruptions.

 

3. Financial Risk:

  • Focus: These risks involve uncertainties that could negatively impact an organisation’s financial health.
  • Examples: Fluctuations in exchange rates, economic downturns, bad investments, or issues with debtors failing to pay.
  • Impact: Financial risks can lead to cash flow problems, reduced profitability, and difficulty securing funding.

 

4. Operational Risk:

  • Focus: These risks stem from everyday business operations and internal processes.
  • Examples: Human errors, IT system failures, supply chain disruptions, or natural disasters impacting operations.
  • Impact: Operational risks can lead to delays in production, decreased efficiency, customer dissatisfaction, and financial losses.

 

By understanding these different types of risks, organisations can proactively identify potential threats, develop risk management strategies, and create a more resilient and successful business.