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.

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

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

Time
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.

Reputation
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
Request for Proposal Jonathan Poland

Request for Proposal

An RFP (request for proposal) is a document that asks suppliers to provide a detailed proposal for a supply contract.…

Value Proposition Jonathan Poland

Value Proposition

A value proposition is a statement that explains the unique value that a company offers to its customers. It is…

Premium Pricing Jonathan Poland

Premium Pricing

Premium pricing is a pricing strategy in which a company charges a high price for its products or services in…

Labor Specialization Jonathan Poland

Labor Specialization

Specialization of labor involves dividing work into specific roles or tasks, with the goal of improving productivity, efficiency, quality, and…

Risk-Reward Ratio Jonathan Poland

Risk-Reward Ratio

The risk-reward ratio is a measure that compares the potential for losses to the potential for gains for a particular…

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…

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…

Organizational Structure Jonathan Poland

Organizational Structure

Organizational structure refers to the formal systems that define how an organization is governed, directed, operated, and controlled. It is…

Management Principles Jonathan Poland

Management Principles

Management principles are fundamental guidelines or ideas that are adopted by an organization or team to guide their actions and…

Content Database

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

Retail Automation Jonathan Poland

Retail Automation

Retail automation refers to the use of technology to automate and streamline various processes in the retail industry, such as…

What is Complex Sales? Jonathan Poland

What is Complex Sales?

A complex sale is a type of sales process that involves multiple stakeholders, a high level of customization, and a…

Sustainable Design Jonathan Poland

Sustainable Design

Designing for sustainability involves creating products, services, and processes that minimize environmental impact and enhance quality of life for the…

Examples of Customer Needs Jonathan Poland

Examples of Customer Needs

Customer needs refer to the specific requirements, desires, or expectations that a customer has for a product or service. These…

Corporate Identity Jonathan Poland

Corporate Identity

Corporate identity is the visual representation of a company’s brand and values. It includes elements such as a company’s logo,…

Competitive Intelligence Jonathan Poland

Competitive Intelligence

Competitive intelligence is the process of collecting and analyzing information about competitors, markets, industries, products, and customers in order to…

Project Failure Jonathan Poland

Project Failure

A project is considered a failure when it does not meet the expectations of sponsors and other key stakeholders. This…

Technology Theories Jonathan Poland

Technology Theories

A technology theory is a broad idea that has significant implications for technology and its effects on society and culture.…

Continuous Process Jonathan Poland

Continuous Process

A continuous process is a series of steps that are designed to be executed concurrently, meaning that all the steps…