Cisco Cyber Security Practice Exam

Why is risk management important in an organization?

1. It enforces strict operational protocols

2. Risk only comes from external sources

3. It helps reduce the threat of damage to an acceptable level

4. It eliminates all risks entirely

The correct answer is: It helps reduce the threat of damage to an acceptable level

Risk management is important in an organization because it helps reduce the threat of damage to an acceptable level. This involves identifying potential risks, assessing their impact, and implementing strategies to mitigate them. By doing so, organizations can better protect their assets, resources, and overall operations from uncertainties that could lead to financial loss, reputational damage, or operational disruptions. Effective risk management allows an organization to prioritize risks based on their likelihood and potential impact, ensuring that resources are allocated efficiently to address the most significant threats. It fosters a proactive approach where organizations can manage risks strategically rather than reactively. This not only enhances an organization's resilience but also supports its ability to achieve its objectives and maintain compliance with regulations and standards. Addressing the context of the other options, while enforcing strict operational protocols may be a component of risk management, it does not encompass the broader purpose and effectiveness of risk management practices. The notion that risk only comes from external sources fails to recognize the diverse range of internal and external risks that an organization faces. Finally, the assertion that risk management eliminates all risks entirely is unrealistic, as it is impossible to completely eliminate all risks; the goal is to manage and mitigate them to an acceptable level.