What innovation can lead to operational risks due to its potential disruptions?

Prepare for the IBAM Module 3 Test with accurate questions, comprehensive flashcards, detailed explanations, and insightful hints to ensure exam success.

The correct answer highlights that new technology implementations can lead to operational risks primarily because the integration of novel technologies can disrupt established processes and workflows. When companies adopt new technologies, they often face challenges such as compatibility issues with existing systems, the need for employee training to handle the new tools, potential software bugs or failures, and even cybersecurity vulnerabilities. These disruptions can lead to interruptions in daily operations, inefficiencies, and in some cases, financial losses.

Advanced training programs, workforce diversification, and strong leadership development typically aim to enhance organizational effectiveness and resilience. While they may come with their own set of challenges, they are generally geared towards improving the overall operation and reducing risks rather than introducing new ones. In contrast, the introduction of new technology is often a double-edged sword; while it has the potential to optimize processes and boost productivity, it can simultaneously introduce significant operational risks if not managed properly.

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