Management Glossary

  Search Results: operational risk
operational risk

The risk that an unanticipated problem in a company's business processes, technologies or equipment will force the company to incur an unexpected cash outflow and/or a reduction in revenue. Examples of operational risks include a computer crash that shuts down the company's Web store thereby curtailing sales or a failure on the company's assembly line that makes it impossible for the company to fulfill the orders that it does have. In addition to the lost revenue, both of these examples might cause the company to incur an unexpected expense to fix the underlying problem.

Contributed by: Managerwise Staff
See: credit risk, market risk, currency risk

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