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UNIT 6: RISK
CD2. TRACK 10 (I = INTERVIEWER, SF = STEVE FOWLER)
I: What are the main types of risk that companies face?
SF: Well, there are two ways of looking at risk. One way oflooking at risk is to (1)
divide_____ risks to an organisation between (2) __internal_____ risks and (3)
__external____ risks. Now, some examples of internal risks include (4)
_injuries______ to employees within a factory or, alternatively, a fire in a (5)
__warehouse_____, for example. Examples of external risks can include an (6)
_earthquake_______ or a tsunami affecting a site or, alternatively, a change in (7)
__exchange-rate__________ mechanism.
Now, I mentioned there were two ways of looking at risk. The other way oflooking at risk
is to divide up risk into four categories - hazard,(8) __operational_______ risks, (9)
_financial_____ risks and (10) _strategic_______ risks. I'II give some examples of
each of those four.
Hazards can include (11) natural events_______ _____ - um, typhoons, hurricanes,
fires, floods and so on and so forth. Operational risks can include risks such as
information technology, supply chain and (11) _employment risks_________ _____.
Financial risks include the (12) __non- availability__________ of reasonablypriced
credit or a lack of (13) __liquidity______ within an organisation.
And finally, and most importantly, strategic risk. Strategic risk looks at the area of
competition, also looks at the area of changing customer demand, the availability of new
technologies, changing social and (15) political pressures_________ _______ on an
organisation.

Listen to the first part of the interview and choose the best answer.
1. Which natural event Steve Fowler did NOT mention in the interview? B
A. Tsunami
B. Tornadoes
C. Typhoons

2. What are the four categories of the other way of looking at risk? C
A. Hazard, management risks, financial risks, strategic risks.
B. Hazard, internal risks, external risks, operational risks.
C. Hazard, operational risks, financial risks, strategic risks.
3. Which category is “lack of liquidity within an organization” included? A
A. Financial risks
B. Hazard
C. Operational risks

Listen to this extract from part one of the interview and replace the seven
mistakes in the transcript below with what Steve Fowler actually says.
Well, there are two ways of looking at risk. One way of looking at risk is to separate
(divide) risks to an organization between internal risks and external risks. Now, some
examples of internal risks include wounds (injuries) to employees within a factory or,
alternatively, a fire in a warehouse, for example. Examples of external risks can include
an earthquake or a tsunami affecting a site or, alternatively, a change in (exchange)
currency-rate mechanism.
Now, I mentioned there were two ways of looking at risk. The other way of looking at
risk is to divide up risk into four categories – hazard, operating (operational) risks,
financial risks and strategic risks. I will give some examples of each of those four.
Hazards can include natural events – storms (typhoons), hurricanes, fires, floods and so
on and so forth. Operational risks can include risks such as information technology,
supply chain and employment risks. Financial risks include the non-availability of cheap
(reasonablypriced) credit or lack of cash (liquidity) within an organization.

CD2. TRACK 11 (I = INTERVIEWER, SF = STEVE FOWLER)

I: How can companies begin to (1) _manage risk______ _______?
SF: Well, the good news is that risk management is actually applied common sense. The
other good news is there are plenty of guides out there to help organisations focus on the
way they manage risk. Now, one such guide is a new standard available from the
International Standards Organisation, ISO - ISO 31,000.
In addition, my own organisation, the Institute of Risk Management, have published a
very simple, free guide on how organisations can manage risk. Now, this is freely (2)
__downloadable___________ from IRM’s website in 16 different languages, and it
sets out the basics of how to manage risk.
There are (3) _5 key_____ ______ steps to the management of risk. The first step,
which is most important, is to recognise the (4) strategic objectives______for your
organisation and the (5) ___key processes____ that your organisation uses.
Following on from step one, step two then goes on to (6) _identify________ what the,
what the risks affecting the organisation might be. Now, the best way to identify risks is
look at them from two directions - both (7) _top down____ _______, from a
management point of view, but also (8) _bottom up_______ ______, from the shop
floor. Only that way will one identify the full spectrum of risks affecting an organisation.
Only at that stage does one then go on to assess and (9) _prioritise___________
risks.
Point three: after identifying risk, the next stage is to assess and prioritise those risks.
Now, a useful tool to recording prioritised risks is called a (10) __risk____register _.
It's a way of an organisation recording those risks that are most (11)
_critical________ to the organisation and, more importantly, what the organisation is
doing about those risks; when they're planning to do it, if they haven't started yet; and
who owns the risk.
Point four: (12) __Mitigating________ risk. There are four ways of dealing with risk
once risk has been identified. Firstly, treating the risk - putting in place some (13)
__counter- measures______ ________ in order to deal with that risk. Two examples
could be the (14) _installation________ of a fire protection system, in order to
prevent a fire, or improved (15) __driver______ ____training_____ in order to stop
accidents on the road.
Secondly, (16) ___terminating______ a risk. Terminating a risk by stopping the
process that leads to the risk. Thirdly, (17) __tolerating______ risk- living with the
action that gives rise to the risk. And, finally, (18) _transferring__________ the risk
by means of insurance or other (19) ___contractual__________ arrangements.
Finally, point five: after identifying strategic objectives, identifying risks, assessing and
prioritising risks and then mitigating those risks, it's important that those actions are
flowed back through to one's strategic objectives again. In life, it's not always possible to
deal with every risk and, therefore, a (20) ____systematic___analysis___ ________
of your approach to dealing with risk will (21) __reinform________ your strategic
objectives. It will affect the way that the company thinks about itself.

Listen to the five steps to managing risk that Steve mentions in part two and
find two-word expressions that mean the following:
1. an organisation’s most important long-term aims: strategic objectives
2. used to talk about looking at things from managers’ point of view: top down
3. used to talk about looking at things from the point of view of ordinary employees:
bottom up
4. a complete range: full spectrum
5. a list of possible risks: risk register
6. actions taken to prevent something from happening: counter-measures
 7. legal agreements: contractual arrangements
8. a methodical examination: systematic analysis

CD2. TRACK 12 (I = INTERVIEWER, SF = STEVE FOWLER)

I:Can you give us some examples of companies that failed to manage risk?
SF:A great example involves the (1) ___banking industry____ ________worldwide,
because of actions taken throughout the banking industry over the last 10 years, in
particular, the systematic and reckless risk-taking undertaken by many banks. There are
massive (2) ____implications______, not just for those organisations and their
shareholders, but also for the world generally - (3) ___public finances______
__________and economic growth and so on.
Moving to a, um, a lower level of risk, there's a great example of an organisation -
actually an American-based (4) ___clothing_relailer_____ _________- that
managed to lose 45 million credit-card details two years ago, giving rise to an $80
million loss and (5) ____untold____ __impact______ on its own reputation.
Finally, there are plenty of examples of organisations that have failed to anticipate
changes in (6) __customer demand________ ________. A great example is the
video-cassette industry. There are lots of organisations worldwide producing ... were
producing video cassettes and retailing those cassettes to the public through shops.
Now, the world has changed in the last few years and, increasingly, people are now (7)
____reverting______ to the use of (8) _____digital media___ ________, which
they can download through the Internet. I suppose those organisations have faced the
(9) _____ultimate risk____ ______ of being replaced by another technology.

Listen and match the two parts of these expressions:

1. systematic - d- ii a) implications

2. reckless - f - i b) growth
3. massive - a - vii c) risk
4. economic - b - iii d) risk-taking
5. untold - g - v e) media
6. great - h - vi f) risk-taking
7. digital -e - viii g) impact
8. ultimate - c - iv h) example
 Now match the adjectives 1-8 above with their meanings.
i) without any sense of danger v) impossible to calculate or describe
ii) happening all the time vi) very good
iii) relating to money, finance, industry, vii) very big
trade, etc. viii) not analogue
iv) the worst

LISTENING PRACTICE
Section 1 (Question 13-17)
 You will hear five short recordings. Five people are giving advice.
 For each recording, decide what each speaker is giving advice about.
 Write one letter (A-H) next to the number of the recording.
 Do not use any letter more than once.

13. __F_________ A. writing letters.

14. ___H________ B. making telephone calls
15. ___B________ C. writing a report
16. ___C________ D. making notes
17. ___D________ E. giving a presentation
F. entertaining visitors
G. arranging a conference
H. going for an interview

TRANSCRIPT (Track 11)

Thirteen: It's a good idea if you can find out (1) ___ ______ what their
interests are. You might think an expensive evening out sounds wonderful, but
perhaps he or she may be tired and not feel like getting (2) _____ ___ and
going somewhere posh! They might just (3) ______ ___ _____ in a quite
restaurant followed by an early night. After all they could have been travelling for
hours!
Fourteen: It's almost always (4) ________ to wear a suit unless you are
absolutely sure that the (5) _____ _____ is different. It goes without saying
that you shouldn't be late so allow yourself plenty of time to get there and have a
few minutes to relax and check yourself in a mirror. When you (6) _____
_____, look them in the eye and smile. Try and answer the questions without (7)
__________ _______ too much and, above all, try to speak slowly. When
you're nervous, you tend to speak too quickly.

Fifteen: Well, the first thing is to make sure you’ve got all the (8)
___________ you need. If possible, you’ll have already let them know that
you’re calling so that they’ve had time to prepare. Once you get through,
remember the other person may not understand you easily so try to speak slowly
and clearly. As they can’t see your (9) ___________, always confirm that
they’ve understood each point that’s been made. And, don’t (10) ___________
you’ve understood them if you haven’t.

Sixteen: The first thing to think about is what the (11) _________
_________ is. By that I mean, who is it for, why do they want it and what are
they going to use it for. It’s probably going to be (12) __________ to think
about the main body of it and leave the introduction until later. Finally check the
(13) ____________, spelling and write the (14) _________________.
When it’s complete, you could try reading it aloud to someone who might give
you some (15) _____________ comments on it.

Seventeen: It’s not a good idea to use complete sentences. Remember to use
(16) ________________ whenever you can but not so many that you can’t
understand them later. Try putting in words like because, therefore, but or as
they can show how ideas are (17) ___________. Use lots of space so you can
(18) ___________ them later if you need to. Remember to use the (19)
__________ as it’s a very useful (20) _____________ mark.