ISM Leadership and Transformation in Supply Management LEAD Question # 30 Topic 4 Discussion
LEAD Exam Topic 4 Question 30 Discussion:
Question #: 30
Topic #: 4
A risk management program for a fast food chain finds a high probability of legal action due to possible food poisoning. Accordingly, the firm establishes legal plans to address potential lawsuits. This is a mitigation step for which type of risk?
Establishing legal plans to address potential lawsuits due to food poisoning is a mitigation step for operational risk. Operational risk refers to the risk of loss resulting from inadequate or failed internal processes, people, systems, or external events. In the context of a fast food chain, the risk of legal action due to food poisoning is a significant operational risk, as it directly impacts the company's ability to operate safely and maintain its reputation.
References:
Lam, J. (2014). Enterprise Risk Management: From Incentives to Controls. Wiley.
Hopkin, P. (2017). Fundamentals of Risk Management: Understanding, Evaluating, and Implementing Effective Risk Management. Kogan Page Publishers.
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