Chapter Review
Key Takeaways
- Business information refers to collective data related to a company and its operations, including statistical information, raw analytical data, customer feedback, and sales numbers.
- Big data refers to datasets that are so large and complex that traditional data-processing methods cannot handle them. The defining characteristics of big data are volume, velocity, variety, veracity, and value (the 5Vs).
- Data mining involves extracting valuable patterns and relationships from large datasets. Businesses use techniques like clustering, classification, and predictive modelling to derive actionable insights.
- Data security is paramount to protect sensitive information from breaches, unauthorized access, and cyberattacks.
- Effective information sharing enhances collaboration and decision-making within and between organizations.
- Visualization converts data into graphical representations, making complex datasets easier to understand and interpret. Popular tools include Tableau, Power BI, and Google Charts.
- Information management encompasses the collection, storage, organization, and distribution of information to optimize business operations and decision-making.
- There are a number of risk management standards designed to consolidate best practice principles and streamline and improve risk management implementations for businesses. For example, ISO refers to the International Organization for Standardization; the 31000 part refers to a family of standards for risk management. As well as being an umbrella term for many different standards, ISO 31000 also refers to a singular standard, specifically known as ISO 31000:2018.
- Business risk refers to the potential for a company to experience financial losses or other challenges that could impact its ability to achieve its objectives. These risks arise from uncertainties in the internal and external environment in which the business operates.
- Risk management is the structured process of identifying potential threats, evaluating their likelihood and impact, and developing strategies to minimize or eliminate their adverse effects.
- Real risks are backed by data, evidence, or historical trends. They are measurable and often require proactive mitigation.
- Perceived risks are based on feelings, fears, or assumptions and may lack concrete evidence. They often result from misinformation, cognitive biases, or heightened awareness.
- Risk tolerance in a business context refers to the degree of uncertainty and potential loss an organization is willing to accept to achieve its objectives. It reflects the company’s capacity and willingness to take on risks as part of its strategy and decision-making processes.
- Personal risk tolerance refers to an individual’s ability or willingness to accept uncertainty and potential loss in pursuit of a goal. It plays a critical role in decision-making, particularly in areas like investments, career choices, and lifestyle decisions.
- In the financial sector, risk management is crucial for banks, insurance companies, and investment firms. These institutions face a wide range of risks, including credit risk, market risk, operational risk, and liquidity risk. Effective risk management practices in the financial industry help ensure stability and prevent financial crises.
- The healthcare industry relies heavily on risk management to ensure patient safety and quality of care. Health care organizations face risks related to medical errors, patient privacy breaches, and regulatory compliance. By implementing robust risk management strategies, providers can identify and mitigate potential risks, leading to improved patient outcomes and reduced legal liabilities.
- Project risk management involves dealing with uncertainties and potential risks that can significantly impact project success. By incorporating risk management into project planning and execution, project managers can identify potential obstacles, allocate resources effectively, and implement contingency plans to minimize project delays and cost overruns.
- Information risk management is defined as the policies, procedures, and technology an organization adopts to reduce the threats, vulnerabilities, and consequences that could arise if data is not protected.
- Supply chain management is yet another area where effective risk management is critical. Supply chains are vulnerable to various risks, such as disruptions in logistics, supplier failures, and natural disasters. By implementing risk management strategies, organizations can identify potential vulnerabilities, establish alternative supply sources, and develop contingency plans to minimize the impact of supply chain disruptions.
- Risk response strategy. The choice of risk response for organizations depends on the severity of the risk, cost-benefit analysis, organizational goals, and risk appetite. Risk response strategies include: avoidance, mitigation, transfer, acceptance, exploitation, and enhancement.
- Artificial Intelligence (AI) is revolutionizing the way businesses manage information and mitigate risks. AI-powered systems provide businesses with the ability to process vast amounts of data in real time, identify risks before they escalate, and support informed decision-making. AI enhances information management by automating data collection, organizing unstructured data, and providing predictive insights that improve business operations. From financial institutions monitoring fraud to supply chain managers predicting disruptions, AI is becoming an integral tool in modern business environments.
End-of-Chapter Exercises
- Big Data in Google Trends. Visit the Google Trends website and explore what Canada is searching for right now. Assume you are a business that sells a product, such as Harley-Davidson motorbikes, M&M’s Candy, or Nike shoes. Use Google Trends to learn about the brand’s popularity. Are people searching for that company’s brand? Which brands are most popular? Discuss with the class and/or professor how Google Trends might be useful to a business.
- Power BI Visualization. Download Power BI online for free. Review a simple “Getting Started” with Power BI tutorial. Try making a simple visualization. You may notice that the charts look similar to those in Excel. This is one of the tools businesses use to make visualizations. How did you do? Share your learning with the class and/or professor.
- Data Analytics. Use the Internet to research data analytics. What is it? How do companies use it? What kind of jobs are there in data analytics? Is this a field that is expanding? What is the Google Data Analytics Certification about? Share your findings with the class and/or professor.
- Tableau for Students. Visit the Tableau for Students website. Review the resources for learning. What resources are available to students? Do you think it would be helpful to gain certification? What can you learn for free? Take a short course or module (your professor may assign a specific module) and share your experience with the class and/or professor.
- IT Monitoring. How does electronic monitoring impact your life as a student? Should the IT department at your college or university be monitoring emails and files? How might the goals of the institution come into conflict with the needs of the students on this issue? What if a student were to send a threatening email? Should IT notify authorities? Who should judge what is deemed threatening?
- Managers’ Information Needs. Think of Walmart. Consider these three levels of management: 1) the manager in the store who is in charge of day-to-day operations, 2) the district manager who is in charge of several stores, and 3) the National or Regional Manager who manages several districts within a region or country. Identify the information needs of the managers at each of these levels. Discuss with a partner, the class and/or professor.
- Data Security. What are some of the ways companies try to protect their data against hackers? What is a firewall? What is encryption? What can you do to protect yourself from being hacked or defrauded? Discuss with the class and/or the professor.
- ERP. Use the Internet to find a company that uses an ERP system to manage data. Does the company have multiple locations that are networked together to share data? What can you discover about the data the company stores, the security used to keep the data safe, and the information that is pulled from that data to support business operations and decisions? Share your findings with the class and/or professor.
- Personal Risk. Identify three personal risks you have taken over the past three years. What happened? How did you mitigate those risks? Did you change your behaviour or thinking afterward? Discuss with a partner, the class and/or the professor.
- Personal Risk Tolerance. Do you have a high or low risk tolerance? What have you done that demonstrates your risk tolerance? Provide three examples. Do you think your risk tolerance might change over time? Why or why not? Discuss with a partner, the class and/or the professor.
- Financial Risk Tolerance Quiz. Take one of these free risk tolerance quizzes to determine your investment risk tolerance level. Rutgers Paper-based Quiz or Finmasters Online Quiz.
- Risk Response Strategy. Select an extreme sport, for example, rock climbing, zip lining, or white-water rafting (or other). What would your risk response strategy be? You and/or your friend sign up with a company that offers these sporting excursions. Make a list of the things you and/or your friend could do to mitigate the risks. Make another list of the things the company could do to mitigate the risks for its customers. Share your lists with a partner, the class and/or professor.
- Risk Failure. Use the Internet to find information on a company that took a risk, and it failed. What happened? What risk response strategy did the company take, if any? Why do you think it failed? Summarize your findings and share them with the class and/or professor.
- Risk Success. Use the Internet to find information on a company that took a risk and was successful in a big way. What happened? What risk response strategy did the company take, if any? Why was it so successful? Summarize your findings and share them with the class and/or professor.
- Remote Work. Does working remotely increase employee productivity? What are the pros and cons for employers of allowing employees to work from home? What are the pros and cons of working from home for employees? Would you like a job where you work from home? Why or why not? What types of people might like to work from home? Discuss with the class and/or professor.
Self-Check Exercise: Risk Management Quiz
Check your understanding of risk management concepts by completing this short self-check quiz.
Additional Resources
- What are the 4 Concepts of Business Intelligence? YouTube Video.
- The Intersection of Business and Technology: An Interview with Mike Jackowski, CEO, Duck Creek. YouTube Video.
- Report a Privacy Breach at Your Organization.
- Get Started with Google Analytics. YouTube Video.
- Risk Management, Judgment, and Decision-Making for Outdoor Leaders. OER
- Risk Management, Supply Chain and Operations Perspective. OER
- What is Information Risk Management?
- The 7 Best Free and Open Risk Management Software
- Innovation QuickWin: Innovation Metrics. YouTube Video.
- Google Data Analytics Professional Certificate
- Google Foundations: Data, Data, Everywhere. Course.
Attributions
This chapter compiles content from various Open Educational Resources (OER). For details, please refer to the Attributions page.
