What role does risk management play in business?

Risk management is crucial in business as it involves identifying, assessing, and minimizing the impact of potential risks that could hinder an organization's operations or objectives. By proactively identifying risks—whether they are financial, operational, legal, or strategic—businesses can implement strategies to mitigate them, thus protecting their assets and ensuring continuity. This process not only safeguards against unforeseen events but also allows businesses to make more informed decisions, allocate resources effectively, and maintain stability in their operations. Overall, effective risk management fosters a safer working environment and contributes to long-term success by reducing uncertainties.

The other options, while they mention important aspects of business, do not encapsulate the primary function of risk management. Increasing profitability, ensuring compliance, and determining market feasibility are all vital functions of a business, but they operate alongside risk management rather than defining its existence.