What is the outcome of effective risk management?

Effective risk management is a systematic approach that enables organizations to identify, assess, and prioritize risks, followed by the coordinated application of resources to minimize, monitor, and control the probability or impact of unfortunate events. The outcome of effective risk management is a reduced likelihood of business disruptions.

When an organization effectively manages risk, it can better anticipate potential challenges and put in place strategies to mitigate them. This proactive approach not only safeguards the organization against potential losses but also ensures smoother operations. Consequently, businesses can maintain continuity even in the face of unforeseen events or threats, thereby enhancing their overall resilience.

In contrast, higher employee turnover, increased business uncertainties, and a lower market presence would be negative outcomes associated with poor risk management. These issues can arise when risks are not effectively identified or mitigated, leading to operational inefficiencies and potential reputational damage. Thus, the correct answer highlights the importance of risk management in maintaining stability and continuity in business operations.