What is included in risk in decision making?

In the context of decision-making, incorporating risk involves integrating potential risks into the decision-making process. This means that when leaders or decision-makers are evaluating options or strategies, they need to consider all the uncertainties and potential adverse outcomes that may arise from their choices. By assessing potential risks, decision-makers can weigh the likelihood of different outcomes, plan for contingencies, and make more informed decisions that align with their risk tolerance and organizational goals.

This approach helps an organization anticipate challenges and devise strategies to mitigate those risks, leading to better overall outcomes. The focus is on identifying and integrating various types of risks—whether financial, operational, strategic, or reputational—into the framework of decision-making. Such comprehensive risk assessment not only improves decision quality but also contributes to the overall resilience and sustainability of the organization.