Exam (elaborations)
ARM 401 Chapter 8 - Part 1 with 100% correct answers | verified | latest update 2024
ARM 401 Chapter 8 - Part 1 with 100% correct answers | verified | latest update 2024
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ARM 401 Chapter 8 - Part 1one of the top concerns of risk professionals today is:
Reputation risk.
Social media has allowed for an unprecedented level of:
Two-way communication between business companies and the public.
Many companies use social media to:
Develop ongoing relationships with customers, and to create and convey a customer-friendly
image that contributes to their success.
These benefits, however, come with the risk of causing:
A public relations disaster with the click of a button.
Every interaction with the public through social media brings with it the possibility of:
Offending or ignoring an important segment of the market, even if accidentally.
Risk managers need to be prepared to deal with not only the unintended consequences of a
poorly worded communication, but also:
The myriad of legal and operational risks that can arise.
These are examples of how a company can benefit from using social media:
Developing ongoing relationships with customers.
Creating and conveying a customer-friendly image that contributes to business success.
Disseminating information.
Providing customer service and gathering feedback.
Monitoring public perception of products and services and responding quickly to significant
changes in those perceptions, particularly negative ones.
Gathering information about prospective employees.
Promoting products or services.
Monitoring social networks and blogs for references to its own and competitors' products and
services.
For good or bad, social media provides a vehicle through which any message can be:
Copied, expanded upon, and communicated to millions of people almost instantaneously.
, A single negative item of information, whether patently false, true, misinterpreted, or out of
context:
Can reverse a company's positive image and severely damage its reputation in a matter of
hours, if not minutes.
For example, with smartphones being nearly omnipresent, someone could film an employee
of a retail chain having a disagreement with a customer demanding a better price than the
employee was authorized to offer. If that video were edited to make it look as though the
employee was berating the customer without reason and was shared out of context online, it
could be seen by potential customers around the world, before:
The company had a chance to respond or correct the record.
Even after the retail chain clarified what happened, its response may never get:
The exposure the original video received.
Through the social networking activities of their employees, companies are also exposed to
this risk:
Reputational risk.
Disgruntled employees may post negative comments about their employer, competitors,
customers, or other stakeholders, requiring:
A response or an apology from the company itself.
It's also possible that an employee could be identified online participating in:
Illegal or unfavorable acts, resulting in the company's becoming the focus of boycotts or
social media campaigns designed to pressure it into taking actions it might not want to take,
such as firing the employee.
Social media activities can also lead to:
Lawsuits or prosecution for violations of the law.
Legal risks associated with social media can arise from:
A company's employment practices, computer-security practices, privacy policy, or use of
intellectual property.
These risks also exist outside social media, but the pervasiveness of social networking and
the speed at which communication occurs can significantly:
Increase the degree of exposure.
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