Final answer:
The relationship between likelihood and consequences in risk management is crucial for making informed decisions and mitigating risks.
Step-by-step explanation:
The relationship between likelihood and consequences greatly affects risk management. When assessing risk, it is important to consider both the probability of an event occurring (likelihood) and the potential impact it could have (consequences). Higher likelihood and higher consequences usually result in a higher level of risk. For example, a business might prioritize addressing a potential risk with a high likelihood and catastrophic consequences over a risk with a low likelihood and moderate consequences. By understanding and managing the relationship between likelihood and consequences, businesses can make better decisions to mitigate risks.