Categories of risk

In this lesson

1. 0:00 Six main categories of risk
2. 0:12 Operational risk and mitigation
3. 0:58 Reputational risk management
4. 4:14 Political risk and mitigation
5. 5:23 Economic risk and hedging strategies
6. 6:52 Regulatory and fiscal risk mitigation

About this lesson

This lesson breaks down each risk type, explains where it comes from, and shows you practical mitigation strategies you can apply in real business scenarios. Understanding these categories is essential for P3 Risk Management and helps you analyse risk comprehensively in case study scenarios and exams. The lesson starts by defining each risk category clearly. Operational risk stems from day-to-day business activities and human error; reputational risk threatens a company's brand and stakeholder trust; political risk arises from government or legislative changes; economic risk comes from external factors like inflation and interest rates; regulatory risk emerges when businesses fail to comply with laws; and fiscal risk relates to changes in government taxation and spending policies. You'll see how these risks interconnect and why categorising them matters for your analysis. For each category, you'll explore practical mitigation strategies. Operational risks are reduced through planning, cost-benefit analysis, and strong internal controls. Reputational risks require good governance, staff training, and stakeholder engagement. Political risks can be managed through insurance and geographic diversification. Economic risks demand cost control, customer diversification, and hedging techniques. Regulatory and fiscal risks need proactive monitoring, expert advice, and engagement with trade bodies. By the end, you'll be able to identify which risks apply to a given business scenario and recommend appropriate responses—a key skill for Strategic Case Study questions and exam success.

Duration: 9m