ACCA Strategic Business Leader (SBL) Practice Exam

Which factor typically influences the risk management process?

1. Company culture

2. Marketing trends

3. Internal and external environment risks

4. Employee turnover rates

The correct answer is: Internal and external environment risks

The risk management process is fundamentally shaped by internal and external environmental risks. These factors encompass a wide array of potential threats and uncertainties that could impact an organization's objectives, making it essential to identify, assess, and manage them effectively. Internal environment risks might include operational inefficiencies or organizational structure challenges, while external environment risks can consist of economic fluctuations, regulatory changes, or competitive pressures. By analyzing these risks, businesses can develop strategies to mitigate them, ensuring the organization remains resilient and adaptable in the face of uncertainty. While company culture, marketing trends, and employee turnover rates are important elements for a business, they primarily influence other aspects of the organization rather than directly shaping the risk management process itself. Therefore, the focus on environmental risks recognizes the comprehensive nature of the risk landscape that organizations must navigate.