What type of decisions can have a long-term impact on a business but may involve risks?

Strategic decisions are those that shape the long-term direction and overall framework of a business. These decisions typically involve significant resources and commitment and can influence where the business will be in the future. They are critical for defining objectives, allocating resources, and determining competitive positioning within the market.

The inherent risks associated with strategic decisions stem from their long-term nature, as the outcomes can significantly affect the organization's success or failure. For example, expanding into a new market, investing in research and development for new products, or altering the core business model involves considerable investment and can have lasting repercussions.

In contrast, operational decisions mainly focus on day-to-day management and efficiency, routine decisions are repetitive and low-risk, and contingency decisions are reactive measures to address unforeseen events. While each of these decision types is important for a business, only strategic decisions specifically entail long-term impact coupled with significant risk.