Risk
Risk, in general management, concerns how uncertainty can affect objectives, with favourable or adverse consequences. Assessment considers sources, likelihood, consequences and the people affected, rather than only the chance of a financial loss. Exposure varies with context: sharing a broad risk category does not mean organisations face identical risks. Some decision-analysis models use a narrower risk-versus-uncertainty convention based on whether probabilities can be estimated, so the intended meaning should be stated.
Worked example
Demand for a new service may exceed plans or fall short. Management considers possible profits or losses, capacity pressures, staff effects and customer commitments rather than treating one forecast as certain.
Common mistake
Assuming risk always means harm or always requires known numerical probabilities, or assessing consequences only for the organisation while ignoring affected stakeholders.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Supporting | September 2026–June 2027 |
| ACCA | SBL | Direct | September 2026–June 2027 |
| FIA | FBT | Supporting | September 2026–June 2027 |
