Effective risk assessment must involve which component?

Effective risk assessment requires a comprehensive understanding of both macro and micro components to accurately identify, evaluate, and mitigate risks. Macro components might include broader economic factors, regulatory changes, and market trends that can affect the organization at a systemic level. In contrast, micro components could involve the specific operations, processes, and internal dynamics within the organization, such as individual departmental risks and resource utilization.

By integrating both levels of analysis, organizations can gain a holistic view of their risk landscape, ensuring that they are prepared for potential challenges that may arise both externally and internally. This thorough approach enables better decision-making and prioritization of risk management efforts, leading to more robust organizational resilience.