What defines 'strategic risk'?

Strategic risk is primarily defined as the risks that may impact an organization's ability to achieve its strategic objectives. This encompasses a broad range of factors that can influence the organization’s long-term goals and plans, including market fluctuations, competitive dynamics, regulatory changes, and shifts in consumer preferences. When an organization is not adequately managing these risks, it may find itself unable to implement its strategies effectively or achieve its desired outcomes.

For example, if a company aims to expand into a new market but faces unexpected regulatory challenges or intense competition that wasn't anticipated, these strategic risks can hinder its ability to reach the goal. Therefore, understanding and addressing strategic risks is critical for decision-makers when formulating and executing strategies.

Other options focus on specific areas, such as technology or human resources, which, while certainly important, do not encapsulate the broader definition of strategic risk. They are more tactical or operational in nature, rather than comprehensive of the overarching strategic landscape that affects overall organizational success.