Browse Definitions :
Definition

business risk

A risk, in a business context, is anything that threatens an organization's ability to generate profits at its target levels; in the long term, risks can threaten an organization's sustainability.

Business risks are broadly categorized as pure risks, which are negative events over which the organization has no control, and speculative risks, which are potential effects of actions taken and choices made that may have positive and/or negative effects. Another model categorizes business risks as internal (resulting from events with the organization) and external (resulting from events occurring outside the organization).

According to security expert Shon Harris, once a business risk has been identified, an organization has four options: transfer it, avoid it, reduce it or accept it.

Risk analysis programs are designed to help an organization deal as effectively as possible with existing or potential threats. The four main elements of risk analysis are:

  • Identifying corporate assets and assessing their value.
  • Identifying vulnerabilities and threats to the security of those assets.
  • Quantifying the probability of those threats and their potential impact on the business.
  • Compare the potential economic impact of the threat versus the cost of the countermeasures required to protect the organization from it.

See also: Types of enterprise risk

 

This was last updated in October 2014

Continue Reading About business risk

SearchNetworking
  • network packet

    A network packet is a basic unit of data that's grouped together and transferred over a computer network, typically a ...

  • virtual network functions (VNFs)

    Virtual network functions (VNFs) are virtualized tasks formerly carried out by proprietary, dedicated hardware.

  • network functions virtualization (NFV)

    Network functions virtualization (NFV) is a network architecture model designed to virtualize network services that have ...

SearchSecurity
  • data breach

    A data breach is a cyber attack in which sensitive, confidential or otherwise protected data has been accessed or disclosed in an...

  • insider threat

    An insider threat is a category of risk posed by those who have access to an organization's physical or digital assets.

  • data compliance

    Data compliance is a process that identifies the applicable governance for data protection, security, storage and other ...

SearchCIO
  • data privacy (information privacy)

    Data privacy, also called information privacy, is an aspect of data protection that addresses the proper storage, access, ...

  • leadership skills

    Leadership skills are the strengths and abilities individuals demonstrate that help to oversee processes, guide initiatives and ...

  • data governance policy

    A data governance policy is a documented set of guidelines for ensuring that an organization's data and information assets are ...

SearchHRSoftware
SearchCustomerExperience
  • recommerce

    Recommerce is the selling of previously owned items through online marketplaces to buyers who reuse, recycle or resell them.

  • implementation

    Implementation is the execution or practice of a plan, a method or any design, idea, model, specification, standard or policy for...

  • first call resolution (FCR)

    First call resolution (FCR) is when customer service agents properly address a customer's needs the first time they call.

Close