Unit 6: Risk

Preparation (before class)

Book page 52 - 59

Starting up
A) The level of taking risks depends on the situation for me personally. If it seems worth it, Ill
take bigger risks than when it doesnt. A big risk I took was choosing for business
management because I really didnt know which course would be best for me. Eventually it
all seems to work out pretty well.
B) In the category of:
- Travel The car is probably the riskiest way to travel because it causes more accidents
than the other transportations. I think that taking a plane is the safest way to travel
because the pilots are well trained and everything is checked very thoroughly before
departure.
- Lifestyle In this category, people who smoke probably take the biggest risk. Its very
bad for your body and can cause a lot of life threatening diseases. Jogging has the least
risks because there arent a lot of things that can go wrong here.
- Money Stocks and shares are the riskiest items in this category because these arent
very predictable. A savings account is probably the safest of all these items because the
banks are responsible for your money and keep it safe for you + every year you gain
interest on your savings.
- Shopping Private sales is probably the safest way to shop. You can actually see the
product and, if necessary, even try it. I think online shopping has some risks (the biggest
risk) because a lot can go wrong for example: You dont get the product you order, the
product doesnt arrive,
C) A lot of risks are taken by businesses.
- Big investments are needed to start up the business
- Products might fail and can cause big losses
- (In some) Businesses (they) are responsible for the life of their employees.
-

Vocabulary: Describing risk

A)
Predict
Estimate
Foresee
Gauge

Meet
Face
Encounter
Spread
Identify

Assess
eliminate
evaluate
Measure
Weigh up

Manage
Anticipate
Calculate
Prioritise
Minimise

Reduce

B) 1 E
2F
3G
4D
5C
6B
7A
C) 1 Slight
2 Great
3 Miniscule
4 Considerable
5 Potential
6 Immediate
7 Huge
8 Remote
9 Serious
10
11 Significant
12 Imminent
13 Substantial
14 Terrible
15 Tremendous
D) Which adjectives describe:
1. High risk great, considerable, huge, serious, significant, imminent, substantial, terrible,
tremendous.
Possible risk Potential
Low risk Slight, remote, miniscule
2. Possible future risk Considerable, potential
Risk in very near future immediate, imminent

Listening: Managing risks

A) Internal and external risk
Internal: Injuries to employees within a factory or, alternatively, a fire in a warehouse
External: Earthquake, Tsunami, affecting a site or, alternatively, a change in exchange-rate
mechanism.
B) Complete chart
1. Hurricanes (hazard)

2.
3.
4.
5.
6.

Floods (hazard)
Employment risks (operational)
Lack of liquidity within an organization (financial)
Availability of new technologies (strategic)
Competition (strategic)

C) 5 key steps to risk management

1. Recognize the strategic objectives for the organization and key processes that the
organization uses
2. Identify the risks that could affect the organization.
3. Asses and prioritize those risks
4. Dealing with the risks
5. All the previous actions have to be flowed back through one strategic objective.
D) Organisations/industries that failed to manage risk
Banking industry (worldwide), Video-cassette industry, an American-based clothing retailer.

Reading: Insuring trade risks

A) Answer questions
1. Health insurance, fire insurance,
2. Fire, life of employees,
B) Quick view on article
As the headline gives away, the article is about internationalization. By reading the article quickly, my
guess is that the article is about international trade and the risks of it and how these risks can be
insured.
C) Answer questions
1. The rising internationalization paved the way for beginnings of insurance industry in the
fourteenth century, as shipowners sought to protect the increasing value of their ships and
cargoes.
2. A reinsurer provides financial protection to insurance companies. They handle risks that are
too large for the insurance companies to handle on their own. They share the load among
several carriers to spread the risks.
3. 9/11 was one of the biggest loss events in the USA and these extreme losses were fully
covered by the insurance industry and the losses caused by the tsunami in 2004, in more
underdeveloped countries, didnt get fully covered by the insurance industry (only 1/10th).
D) Summarizing 3 key points
In international trade, the risks are very complex and thats the insurance industrys their most
difficult challenges and these risks affects all classes of business which is shown in 3 key points.

1. 90% of trade is transported by sea and waterways. Its big containerships that are used for
transporting goods and these can be worth over 1Bn dollars, which is not very much if you
know that the goods in depots like Singapore or Hamburg are worth tens of billions of dollars
every day.
2. When the production of goods is outsourced to low-wage countries it not only reduces the
costs, but also the quality of the goods. This can cause recall costs, liability costs,
3. Liability problems can occur when pharmaceutical products cause dangerous side effects in
patients. National law plays a key role here.
E)
1.
2.
3.
4.
5.

Word explanations
Liability
Awards
Range of insurance classes
Accumulation
Catastrophes

F)
1.
2.
3.
4.
5.

Complete sentences
Awards
Liability
Catastrophe
Range
Accumulation

G)
1.
2.
3.
4.
5.

Making expressions
Bear the brunt
Spring to mind
Meet a need
Pave the way
Spread the risks

H)
1.
2.
3.
4.
5.

Match expressions with meanings

2
4
1
5
3

Language review: Adverbs of degree

A) Adverbs that strengthen/soften the adjectives
Strengthen entirely, extremely, fully, highly, increasingly, totally, very
Soften a bit, exceptionally, fairly, moderately, quite, rather, reasonably, slightly, somewhat
B) Complete dialogues with adverb
1. Extremely

2.
3.
4.
5.

Very
Extremely
Well
Somewhat

C) Dialogues
A: His predictions for this years sales figures were fairly accurate.
B: Yeah, Im shocked, I didnt think he was that smart, I guess I badly misjudged him.

Skills: Reaching agreement

A)
1.
2.
3.
4.

Meeting sales conference (U2)

Location: Florence (Italie)
Workshop activities: Roleplay, Quiz
Dinner: Banquet
Month: January

B)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Matching expressions
Summarising
Giving opinions
Asking for opinions
Adding a condition
Asking for opinions
Asking for opinions
Making suggestions
Making suggestions
Agreeing, Summarising, asking for opinions
Disagreeing, giving opinions
Making suggestions
Agreeing
Agreeing, giving opinions, emphasizing

Case study: Winton Carter Mining

1. What are the advantages and disadvantages of mentioning the African project in WCMs
prospectus?
Advantages (if successful)
-

Raise profile
Itll put them in another league in the mining industry
Find finance for other projects

Disadvantages:

Investors might be scared to get involved with the company because theyre a high risk
company.
- Big risk to invest in this project because the area isnt stable (civil war).
2. What do you think theyll decide to do?
The mining business isnt an easy business, risks have to be taken so I think theyll go for it.