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  1. business-and-its-environment

    enterprise
    6 主题
  2. business-structure
    6 主题
  3. size-of-business
    3 主题
  4. business-objectives
    3 主题
  5. stakeholders-in-a-business
    2 主题
  6. external-influences-on-business
    12 主题
  7. business-strategy
    10 主题
  8. human-resource-management
    human-resource-management-hrm
    8 主题
  9. motivation
    4 主题
  10. management
    2 主题
  11. organisational-structure
    5 主题
  12. business-communication
    5 主题
  13. leadership
    2 主题
  14. human-resource-strategy
    3 主题
  15. marketing
    the-nature-of-marketing
    7 主题
  16. market-research
    3 主题
  17. the-marketing-mix
    6 主题
  18. marketing-analysis
    5 主题
  19. marketing-strategy
    3 主题
  20. operations-management
    the-nature-of-operations
    3 主题
  21. inventory-management
    2 主题
  22. capacity-utilisation-and-outsourcing
    1 主题
  23. location-and-scale
    2 主题
  24. quality-management
    1 主题
  25. operations-strategy
    4 主题
  26. finance-and-accounting
    business-finance
    2 主题
  27. sources-of-finance
    3 主题
  28. forecasting-and-managing-cash-flows
    1 主题
  29. costs
    4 主题
  30. budgets
    1 主题
  31. financial-statements
    4 主题
  32. analysing-published-accounts
    6 主题
  33. investment-appraisal
    2 主题
  1. Business_A-level_Cie
  2. business-strategy
  3. contingency-planning-and-crisis-management
课 7, 主题 10
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contingency-planning-and-crisis-management

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Contingency planning

  • Contingency planning involves a business predicting risky or unwanted events, then developing a set of suitable responses

    • Risk assessments of potential disruptions and impacts are carried out

    • Procedures commonly cover risks such as fire or weather-related emergencies

      • Evacuation plans are drawn up and practised

      • Key staff are given emergency responsibilities

      • Alarm systems are tested

      • Preventative measures protect stock and equipment, e.g. installation of fireproof doors

  • Contingency planning can help a business to survive and recover from a period of crisis

    • However, drawing up detailed contingency plans requires time and investment

Evaluating contingency planning

Factor

Benefits

Limitations

Time

  • Helps businesses to respond immediately

    • Clear staff roles & responsibilities 

    • Resources are identified and available 

    • Procedures are shared in advance

  • A time-consuming process

    • Risk assessment takes valuable management time

    • Plans need to be revisited regularly 

    • Staff require training

Cost

  • Can reduce costs 

    • Emergency equipment/resources are purchased in advance

    • Financial losses are likely to be lower

  • Spending on resources needed in a crisis may be wasted if not needed

  • Difficult to budget for unknown crisis situations 

Safety

  • Procedures keep stakeholders such as staff and customers safe

    • Training increases awareness

    • Legal obligations should be met (e.g. fire regulations)

  • Bureaucratic and difficult to implement swiftly

  • Leadership and compliance from staff or other stakeholders is needed

Risk

  • Most likely threats are considered in detail

    • Reduces legal risks if procedures are followed

  • Requires up to date and complete information to be effective

  • Human reactions such as fear and panic cannot be fully mitigated

Crisis management

  • Crisis management refers to the immediate handling of a disruptive and unexpected event

    • It includes communication, coordination, resource mobilisation and decision-making under pressure

      • Short-term significant disruption is likely and long-term business survival is affected

      • Radical solutions such as autocratic leadership and centralised decision-making could ensure business continuity

      • Work activity may need rapid reorganisation

      • E.g. many businesses swiftly implemented remote working for staff during the Covid-19 pandemic

Examples of crisis situations

Business threats include data loss, fire, theft, natural disasters and IT systems failure
Businesses face threats from a range of sources including IT systems failure, natural disasters and theft

  • Crises do not have to be large-scale 

    • The unexpected loss of a CEO, a warehouse fire, or an outbreak of infection within a business can cause a significant crisis that requires a prompt, transparent, and well-communicated response

    • Losing customers’ data could be classed as a crisis requiring immediate response from management

Factors affecting crisis management

Speed

Transparency

  • A rapid response can contain or reduce damage 

  • E.g. Procter and Gamble‘s crisis team responded rapidly when a viral challenge encouraged teenagers to film themselves eating Tide Pods detergent 

    • It quickly published warnings and updated disclaimers on its website

    • This quick response protected P&G from legal action

  • Keeping customers informed and telling the truth can protect reputation

  • E.g. Supply issues in 2018 caused KFC to run out of chicken, leading to the temporary closure of half of its UK outlets

    • It used humour on social media to keep customers informed

    • It apologised and quickly addressed customer concerns, turning the negative story into positive PR 

Control

Communication

  • Ensuring that leaders have the authority and resources to perform at the highest level in a crisis

  • E.g. Walmart‘s Emergency Operation Center operates 24 hours a day

    • It manages the company’s response to events that could affect operations

    • Coordinated by senior Walmart leaders, it can assemble support teams immediately

  • The rapid issue of press releases can reassure stakeholders and reduce recovery time

  • E.g. Scandinavia Airlines (SAS) used social media effectively during the 2010 Icelandic volcanic ash cloud crisis

    • Customers were directed to SAS’s Facebook page

    • Staff responded to every message, comment and post

    • Problems were solved immediately; regular updates kept customers satisfied

  • Crisis management and contingency planning cannot eliminate the risk of business disruption

    • Even the best plans can go wrong when a crisis hits

  • The fact that businesses engage in this kind of planning does provide significant benefits, including

    • Business resilience can be improved

    • Negative impacts may be reduced

    • Stakeholders are likely to have greater confidence in the business