Which of the following best describes operational risk?

Operational risk is best described as the risk associated with operational processes and employee safety. This type of risk encompasses various internal factors that can negatively impact an organization's ability to conduct its day-to-day operations. It relates to the potential loss resulting from inadequate or failed internal processes, people, and systems, or from external events.

Operational risks can arise from various sources, including human error, system failures, fraud, and other disruptions related to business operations. Additionally, issues related to employee safety and workplace hazards are significant components of operational risk, as they can lead to injuries, regulatory penalties, and reduced employee morale, all of which can further affect an organization's efficiency and profitability.

The other options focus on different types of risks. Strategic management decisions involve a different risk category, usually associated with long-term planning and overall business direction. Market fluctuations are related to financial risks and external economic conditions, while environmental factors pertain to risks connected to natural disasters or changes in the environment, which do not directly relate to internal operational processes. Hence, the focus on the processes and safety elements uniquely positions operational risk as the most fitting choice.