Human Resources Certification Institute (HRCI) Practice Exam

Predicting the consequences of an electricity outage at your place of work is the primary focus of which business continuity planning tool?

1. Hazard assessment

2. Rapid response plan

3. Business impact analysis

4. Prevention plan

The correct answer is: Business impact analysis

The focus of a business impact analysis is to predict the consequences of interruptions to business operations, such as an electricity outage, and to assess how those interruptions might affect the organization. This analysis examines critical business functions and the resources required to maintain or restore them after a disruption. It helps identify potential risks and the impact they may have on the organization’s ability to achieve its objectives, including financial losses, regulatory penalties, and damage to reputation. By understanding these impacts, organizations can prioritize their risk management strategies and allocate resources more effectively to mitigate effects on business operations. This makes the business impact analysis a vital tool in the development of comprehensive business continuity plans. Other options, while relevant to disaster preparedness, serve different purposes; for instance, a hazard assessment identifies potential risks, a rapid response plan focuses on immediate actions following a disruption, and a prevention plan outlines strategies to prevent incidents from occurring in the first place.