Operational Risk

Posted in Finance, Accounting and Economics Terms, Total Reads: 982

Definition: Operational Risk

Operational risk is the risk that a company takes during its operations when it functions on a particular sector, segment or product line.

An operational risk is the risk that a company takes which may result in a failure in the overall business aspect what the company is in, if something goes wrong. Such types of risks are common when a company has to operate in a particular field of manufacturing or services. 

A failure in the operations may result in failure of machines, enterprise resource management systems or the overall human resources which may result in the closing down of operation for the company. However a lot of companies who take operational risk have also been successful despite all the hurdles that they face due to proper decision making by the top management.

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