What are external risks?

External risks refer to risks that originate from outside the organization and can impact its operations, performance, or reputation. These risks can arise from various external factors such as economic conditions, regulatory changes, natural disasters, competitive dynamics, or shifts in consumer behavior. Because these elements are outside the direct control of the organization, they require careful analysis, monitoring, and strategic planning to mitigate their effects.

Understanding external risks is crucial for comprehensive risk management. Organizations must identify potential external threats and develop strategies to address them, as these factors can significantly influence their success and sustainability. By proactively managing external risks, organizations can better prepare for uncertainties and protect their assets and stakeholders.