What does the term 'operational resilience' signify?

Prepare for the Operational Risk Management Exam with multiple choice questions, expert explanations, and comprehensive study tips. Enhance your risk management skills and boost your confidence to excel on exam day!

Operational resilience refers to an organization's ability to anticipate, prepare for, respond to, and recover from disruptions. This encompasses a wide range of potential challenges, including natural disasters, cybersecurity incidents, or supply chain disruptions. The focus is on the capability to adapt and continue functioning effectively in the face of various threats and shocks.

By emphasizing adaptability, operational resilience allows organizations to maintain essential functions during crises, minimize the impact of disruptions on their operations, and quickly recover. This holistic approach often involves not just physical systems and processes but also the human aspects, such as maintaining employee morale and communication during challenging times.

While the other options touch on important aspects of operational management—such as cost management, compliance, or backup systems—none encapsulate the essence of resilience, which prioritizes adaptability and recovery over the mere implementation of specific protocols or systems.

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