Which term describes the risk associated with a company's future business plans and strategies?

Which term describes the risk associated with a company's future business plans and strategies?

• A. Operational risk
• B. Project risk
• C. Strategic risk
• D. Threat

Answer: (C)

This question focuses on risk tied to a company's future plans and direction. The term that best fits this idea is strategic risk, which encompasses the dangers that a business faces when its chosen strategy and long‑term plans fail to deliver expected outcomes or become misaligned with changing market, technology, competitive, or regulatory conditions. It also covers risks in how those plans are executed and whether the organization can adapt to new realities while pursuing its objectives. Operational risk, by contrast, concerns the day-to-day processes, people, systems, and controls that enable running the business. Project risk relates to the uncertainties specific to a particular initiative with defined scope and timeline. A threat is a generic term for potential danger and isn’t specifically tied to business strategy.

This question focuses on risk tied to a company's future plans and direction. The term that best fits this idea is strategic risk, which encompasses the dangers that a business faces when its chosen strategy and long‑term plans fail to deliver expected outcomes or become misaligned with changing market, technology, competitive, or regulatory conditions. It also covers risks in how those plans are executed and whether the organization can adapt to new realities while pursuing its objectives.

Operational risk, by contrast, concerns the day-to-day processes, people, systems, and controls that enable running the business. Project risk relates to the uncertainties specific to a particular initiative with defined scope and timeline. A threat is a generic term for potential danger and isn’t specifically tied to business strategy.