Risk (business decisions)
The possibility of loss or of an unfavorable outcome.
Managers sometimes must prioritize conflicting criteria with limited or imperfect data, and the result is imperfect decision making. Naming the risks a decision accepted is what a documented process is for.
Often confused with
- Risk (personal finance)
- Business risk is the chance a company's decision turns out badly; risk in Unit 5 is the chance of financial loss or physical harm to a person.
- Threat
- Risk is the general possibility of an unfavorable outcome; a threat in SWOT is a specific external factor that could produce one.
- Trade-Off
- A trade-off is what you knowingly give up by choosing; risk is the chance that what you chose turns out worse than expected.
Taught in
See also
4.3.B.5