Exam-style question
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Which response best handles risk in business change? Scenario: a start-up deciding whether business change is affordable, realistic and aligned with customer demand.
- A.Identify the uncertainty, explain the possible impact on performance, and judge whether the benefit justifies the risk.
- B.Describe risk as something that always prevents action.
- C.Say risk is high without identifying what could go wrong.
- D.Ignore competitors, capacity, finance and demand uncertainty.
Model answer
What a good answer should say
- The correct answer is Identify the uncertainty, explain the possible impact on performance, and judge whether the benefit justifies the risk..
Explanation
Why this works
The correct option is Identify the uncertainty, explain the possible impact on performance, and judge whether the benefit justifies the risk. because risk analysis should connect uncertainty to business performance.
In the scenario, the student must connect business change to business objectives, stakeholders, finance and commercial context. This avoids unsupported opinion and shows why the decision depends on evidence from the business rather than a generic rule.
Common mistake
No common mistake is linked to this question yet.