Ivory Inc., an American publishing company, outsources content writing work to Kuber Inc., an Indian content services company. Ivory is unable to document the work that employees of Kuber do in the production process. Moreover, it finds it difficult to stipulate what the actions of these employees should be in the production process. This scenario illustrates that Ivory is subjected to high _____.

A) operational risk
B) structural risk
C) reputational risk
D) contractual risk

Question

Arthur Pizzotti · Accepted Answer

Final Answer : A, Explanation :  Operational risk is the correct answer because it refers to the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events. In this scenario, Ivory Inc.'s inability to document or stipulate the actions of Kuber Inc.'s employees in the production process indicates a failure in internal processes and management of external partners, which are key components of operational risk.

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