A service provider that has grown rapidly in the social media market wants to increase its competitive advantage by launching new functionality for its services. However, there are concerns that the…

Question

Options

• ARisk-averse
• BRisk-seeking
• CRisk-tolerant
• DRisk-neutral

• A
  4% (1)
• B
  83% (20)
• C
  4% (1)
• D
  8% (2)

Explanation

Risk-seeking (B) is correct because the service provider is knowingly accepting a high probability of negative outcomes (service outages) in pursuit of a desired gain (competitive advantage), actively choosing to proceed despite acknowledged technical concerns rather than avoiding or mitigating them.

• Risk-averse (A) is wrong - a risk-averse organization would delay or cancel the launch until the reliability concerns were resolved, prioritizing stability over opportunity.
• Risk-tolerant (C) is wrong - risk tolerance means accepting unavoidable background risk as part of normal operations, not actively choosing to embrace known, significant risks for potential reward.
• Risk-neutral (D) is wrong - a risk-neutral stance weighs risks and rewards objectively without bias; this organization is clearly biased toward taking the risk, not neutral about it.

Memory tip: Think of a gambler at a casino - they seek risk because they believe the reward outweighs the danger. When you see a scenario where someone knowingly charges ahead despite red flags because they want the prize, that's risk-seeking.

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