A rapidly growing tech start-up is revisiting its risk management plan in light of its strategic goal to rapidly increase market share. Which of the following best describes the organization's risk appetite?
The company has a strict policy that avoids any risks that could potentially disrupt business operations.
The organization seeks to accept greater risks for potential higher returns conducive to growth objectives.
The company only engages in risks that have been extensively analyzed and have risk mitigation strategies in place.
The organization has a preference for transferring risks to third parties and insurance wherever possible, instead of accepting them.
An expansionary risk appetite indicates a willingness to take on more risk for the potential of greater rewards, typically seen in organizations looking for rapid growth, such as tech start-ups aiming to increase market share quickly.
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What is risk appetite in the context of organizations?
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How does risk appetite affect decision-making in a tech start-up?
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What strategies can organizations employ to manage higher risk appetites?