Browse Definitions :
Definition

business risk

Contributor(s): Ivy Wigmore

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

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • compliance audit

    A compliance audit is a comprehensive review of an organization's adherence to regulatory guidelines.

  • regulatory compliance

    Regulatory compliance is an organization's adherence to laws, regulations, guidelines and specifications relevant to its business...

  • Whistleblower Protection Act

    The Whistleblower Protection Act of 1989 is a law that protects federal government employees in the United States from ...

SearchSecurity

  • Malwarebytes software

    Malwarebytes is a cross-platform anti-malware program that detects and removes malware and other rogue software.

  • Transport Layer Security (TLS)

    Transport Layer Security (TLS) is a protocol that provides authentication, privacy, and data integrity between two communicating ...

  • van Eck phreaking

    Van Eck phreaking is a form of electronic eavesdropping that reverse engineers the electromagnetic fields (EM fields) produced by...

SearchHealthIT

SearchDisasterRecovery

  • cloud insurance

    Cloud insurance is any type of financial or data protection obtained by a cloud service provider. 

  • business continuity software

    Business continuity software is an application or suite designed to make business continuity planning/business continuity ...

  • business continuity policy

    Business continuity policy is the set of standards and guidelines an organization enforces to ensure resilience and proper risk ...

SearchStorage

  • solid-state storage

    Solid-state storage (SSS) is a type of computer storage media made from silicon microchips. SSS stores data electronically ...

  • persistent storage

    Persistent storage is any data storage device that retains data after power to that device is shut off. It is also sometimes ...

  • computational storage

    Computational storage is an information technology (IT) architecture in which data is processed at the storage device level to ...

Close