What is the relationship between risk management and strategic planning?

The relationship between risk management and strategic planning is foundational, as risk management plays a critical role in informing and shaping strategic planning. Risk management involves identifying, assessing, and prioritizing risks that could impact an organization's objectives. By understanding these risks, organizations can make more informed decisions in their strategic planning processes.

When developing strategic plans, organizations need to consider potential risks that could derail their goals. This includes evaluating market trends, competitive dynamics, regulatory changes, and operational vulnerabilities. The insights gained from risk management help to ensure that strategic plans are robust and more likely to succeed, as they incorporate mitigation strategies for identified risks.

In contrast, other options suggest an incorrect hierarchy or dismiss the role of risk management altogether in strategic decision-making, which undermines the importance of a comprehensive approach that combines both disciplines for effective organizational success.