Risk management theory that considers an organization-wide approach to risk management is known as what type of approach? Exam Dumps 13/61

A holistic approach to risk management considers the entire organization as a single, interconnected system. It moves beyond managing risks in isolated silos (e.g., finance, IT) to an integrated, enterprise-wide perspective. This view ensures that the interdependencies between risks, departments, and strategic objectives are understood and managed collectively. The principles of ISO 31000, particularly the emphasis on integration into all organizational activities and decision-making, directly support this holistic philosophy, which is the foundation of modern Enterprise Risk Management (ERM).

A. Cross-functional: This describes collaboration between departments, which is a component of a holistic approach but does not represent the entire organization-wide concept itself.

B. Comprehensive: While a holistic approach is comprehensive, this is a general adjective. "Holistic" is the specific term in risk management theory for an all-encompassing, organization-wide view.

C. Interrelational: This focuses specifically on the connections between different risks, which is an important analysis within a holistic framework but is not the name for the overall approach.

1. International Organization for Standardization (ISO). (2018). ISO 31000:2018 Risk management — Guidelines. Clause 4

Principles. The principle that risk management must be "Integrated" states it is "an integral part of all organizational activities

" which is the functional definition of a holistic

organization-wide approach.

2. Lalonde

C.

& Boiral

O. (2012). Managing risks through ISO 31000: A critical analysis. Risk Management

14(4)

272-300. The article discusses how ISO 31000 promotes a "holistic and integrated vision of risk management" (p. 275) that must be embedded throughout the organization

contrasting it with fragmented

silo-based approaches.

3. Hopkin

P. (2018). Fundamentals of risk management: understanding

evaluating and implementing effective risk management (5th ed.). Kogan Page Publishers. Chapter 1

"Introduction to risk management

" describes the evolution of risk management towards an "enterprise or holistic approach" (Section: "Development of risk management")

which is supported by frameworks like ISO 31000.