Abstract
This study explores the concept of opportunity risks, which involve pursuing uncertainties to achieve favorable outcomes. The goal of this study is to offer practical applications for opportunity risk management in the cybersecurity environments of organizations that seek to include this often-overlooked factor in their decision-making process. Opportunity risks are significant to cybersecurity environments and industries seeking to enhance their decision-making processes and risk response options. Despite the need for better decision-making approaches in a world that is increasing in hyper-intelligence and technological transformation, opportunity risk remains a marginalized business asset. This research sheds light on a more balanced approach to managing risks. A systematic literature review was the primary research method used in this study to investigate opportunity risk. This study aims to identify and evaluate relevant theories, approaches, and techniques for leveraging the favorable side of risks.
TopIntroduction
Across the perpetually transformative and heinous landscape of cybersecurity, where an estimated 800,000 cyberattacks occur annually, 4,100 data breaches were publicly disclosed in 2022 (Burt, 2023). Cyberattacks are proliferating (CISA, 2022; Kaminska, 2021; Shandler et al., 2023; Snider et al., 2021), causing trillions of dollars of damages yearly at the current growth rate. Cyberattack damage will amount to roughly $10.5 trillion annually by 2025—a 300% increase from 2015 levels (Aiyer et al., 2022; Morgan, 2022). Despite these staggering figures wrought with malicious activity, the cybersecurity industry has a chance to step up and seize the opportunities (Aiyer et al., 2022; Tilman & Jacoby, 2021) in risk events while thwarting cyber threats.
Opportunity risk has emerged as a critical concept in organizational decision-making and strategic planning (Krzysztof, 2019; Settembre-Blundo et al., 2021) and can also be applied to cybersecurity. Risk can influence the cybersecurity posture of a company in a multiplicity of ways (Jones, 2020), including its economic standing, competitive performance, and hard-earned reputation (Herd, 2023). Positive or opportunity risk is closely tied to the broader field of risk management (Edwards et al., 2019; Hillson, 2001; Krzysztof, 2019; PMI, 2019) and finds its origins in several academic fields such as economics, finance, and management.
Cybersecurity risks continuously overshadow the business landscape (Aiyer et al., 2022; CISA, 2022; Morgan, 2022). Thus, the formal and disciplined practice for addressing risk through effective risk management is a necessity (COSO 2017; ISO 31000, 2018). Risk management acknowledges the concept of uncertainty, including the unfavorable (threats) and favorable (opportunities) potentialities of situational outcomes (MITRE, n.d.).
The potential to pursue positive risk needs to be addressed (Banham, 2009; Chertoff, 2023). Along with addressing threats, the cybersecurity industry has a chance to step up and seize opportunities. With billions of dollars of revenue set to flow into the market in the next three years, cybersecurity professionals must meet the challenge by modernizing their capabilities and rethinking their go-to-market strategies (World Economic Forum, 2023). Such strategies include understanding and leveraging possibilities intelligently to profit from the opportunities that risk may present. It should be noted that market opportunities are subject to volatility (Kohli, 2023) due to technological improvements, regulatory changes, and adjustments in consumer behavior.
Key Terms in this Chapter
Risk Management: Risk management is the systematic process of identifying, assessing, and prioritizing potential risks or uncertainties that may adversely affect an organization’s objectives, resources, or reputation.
Expect Risk Response: The expect risk response strategy purposes to permit the organization to recognize and record an opportunistic type of risk, while preparing for a potentially advantageous occurrence to the greatest extent possible.
Risk Capitalization: Risk capitalization is a strategic approach to leveraging identified risks and uncertainties within an organization to create opportunities for growth, innovation, and competitive advantage.
Opportunity Risk: Opportunity risk is the potential loss or adverse consequences an organization may encounter by not pursuing available opportunities or failing to capitalize on favorable circumstances that could contribute to its growth, innovation, and competitive advantage.
Risk Duality: Risk duality suggests that risks can be both threats and opportunities. The concept indicates that risks have two sides, one representing the potential for negative consequences (threats) and the other for positive outcomes (opportunities).
Positive Risk: Positive risk, also known as opportunity risk or upside risk, refers to the possibility of an unexpected event or situation that may positively impact the objectives or outcomes of a project or organization.
Risk-Based Decision-Making: Risk-based decision-making entails making decisions by evaluating potential risks and their associated impacts.
Risk Response Strategy: Risk response strategy is plan derived from the available options to address risks in an organization to reduce their potential impact on business objectives, resources, and overall performance. Risk response strategy involves proactively selecting appropriate activities to treat risk based on the nature, likelihood, and severity of the risks, as well as the organization’s risk appetite and priorities.