Risk Impact

Risk Impact

Risk Impact Jonathan Poland

Risk impact refers to the potential consequences or losses that an organization or individual may incur as a result of an identified risk. It is an essential element of risk analysis, and is typically estimated by considering the likelihood of a risk occurring, as well as the potential consequences of the risk if it does occur.

Developing an estimate of probability and impact is a standard practice in risk analysis, and it is often done using a variety of techniques, such as probability analysis, impact analysis, risk assessment tools, risk analysis techniques, and risk management software. These techniques can help organizations and individuals to understand the potential impacts of different risks and to prioritize their efforts accordingly.

Risk impact is an important consideration in risk management, as it helps organizations and individuals to understand the potential costs associated with risks and to allocate resources more effectively to manage and mitigate those risks. By accurately assessing risk impact, organizations and individuals can make more informed decisions about the risks they are willing and able to take on, and develop strategies to minimize the potential consequences of those risks. The following are common types of impact.

Health & Safety
Safety or health risks related to a location, lifestyle, occupation or activity. For example, a risk assessment for a major earthquake typically includes estimates of casualties.

Quality of Life
Nations, cities, communities, organizations and individuals may base risk assessments on quality of life factors. For example, before purchasing a house an individual may consider the risk that an adjacent industrial property will pollute the air.

Risks to the environment such as estimates of potential damage to an ecosystem.

Financial impacts such as lost revenue, costs and expenses. Financial impacts may be modeled as a single estimate or a probability distribution.

Projects often estimate risk impact in terms of cost and time. For example, a project team may estimate the impact of technical risks in terms of delays to a schedule.

Risk impact can be viewed in terms of social factors such as reputation. For example, an airline might assess the risk of a practice such as overbooking in terms of customer satisfaction and brand value.

Learn More
Vertical Integration Jonathan Poland

Vertical Integration

Vertical integration is when a single company owns multiple levels or all of its supply chain.

Business Equipment Jonathan Poland

Business Equipment

Business equipment refers to the tools, machines, and other physical assets that a company uses to conduct its operations. This…

Market Development Jonathan Poland

Market Development

Market development is the process of entering new markets to expand revenue and reduce concentration risk. It involves identifying and…

Management Challenges Jonathan Poland

Management Challenges

Management challenges are obstacles, difficulties, or inefficiencies that make it difficult for managers to achieve their goals and objectives. These…

Process Capital Jonathan Poland

Process Capital

Process Capital is a term that refers to the financial resources that a company uses to fund its operations and…

Complexity Cost Jonathan Poland

Complexity Cost

Complexity cost is the cost associated with making something more complex. Complexity can have a range of costs, including increased…

Digital Assets Jonathan Poland

Digital Assets

Digital assets are electronic representations of value that can be traded, stored, and managed using decentralized digital technologies such as…

Research Skills Jonathan Poland

Research Skills

Research skills are abilities that enable individuals to effectively investigate, analyze, and communicate knowledge. These skills are essential for success…

Continuous Production Jonathan Poland

Continuous Production

Continuous production is a method of manufacturing in which materials and parts are continuously processed and kept in motion or…

Content Database

Search over 1,000 posts on topics across
business, finance, and capital markets.

Workload Automation Jonathan Poland

Workload Automation

Workload automation is the process of automating the execution of routine tasks and processes in a business environment. It involves…

Supplier Risk Jonathan Poland

Supplier Risk

Supplier risk refers to the risk that a supplier will not fulfill their commitments to an organization, which could result…

Business Functions Jonathan Poland

Business Functions

Business functions are the activities that are essential to the operation and success of a business. These functions are typically…

Go-To-Market Strategy Jonathan Poland

Go-To-Market Strategy

A go-to-market strategy is a plan that outlines how a business will introduce its products or services to the market…

Generic Drug Manufacturers Jonathan Poland

Generic Drug Manufacturers

The generic drug industry is a sector of the pharmaceutical industry that focuses on the development, production, and marketing of…

Praxeology Jonathan Poland


Praxeology is the study of human action, particularly as it pertains to decision-making and the pursuit of goals. The term…

Window of Opportunity Jonathan Poland

Window of Opportunity

The window of opportunity is a concept that refers to a limited time period during which an opportunity is available…

IT Architecture Jonathan Poland

IT Architecture

An IT architecture is a framework that describes the components of an information technology (IT) system, how they work together,…

Marketing Message Jonathan Poland

Marketing Message

A marketing message refers to any media or communication that is intended to persuade or influence customers. Marketing messages can…