What are possible consequences of a significant negative event impacting an organization?

The selection of loss of key employees and expensive product recalls highlights the serious repercussions that can arise from a significant negative event affecting an organization. When an organization experiences a major setback, such as a product failure or a public relations crisis, it can lead to the loss of valuable staff who may feel demoralized or seek employment elsewhere, viewing the organization as unstable. The financial impact of a product recall can be substantial, including costs associated with logistics, management, and potential legal liabilities, not to mention the damage this does to the company's reputation.

Conversely, the other options reflect outcomes that are typically positive or strategic in nature. Negotiating better contracts or experiencing increased brand loyalty and higher sales are often seen as benefits derived from effective risk management or positive organizational changes, rather than direct consequences of negative events. These aspects do not align with the immediate adverse effects an organization faces during times of crises, which is why the chosen answer emphasizes the tangible losses and difficulties incurred during such scenarios.