business objectives and strategy - contingency planning and crisis management

Question 1

explain the nature of contingency planning?

Answer 1

planning business continuity in the event of an unexpected outcome - an outcome that would be catastrophic if it occurred

Question 2

explain the purpose of contingency planning?

Answer 2

minimise the impact of a significant foreseeable event and to plan for how the business will resume normal operations after the event

Question 3

what are the advantages of contingency planning?

Answer 3

• an agreed course of action is in place and ready to be used
• considers risks and actions that should be taken when risks materialise
• enables the early execution of a controlled plan

Question 4

what are the disadvantages of contingency planning?

Answer 4

• opportunity cost of time involved constructing the plan
• possibility that the people who constructed the plan may not be honest in their assessment of risk and therefore not be a true reflection of situation

Question 5

what is the benefit of a contingency plan to its stakeholders?

Answer 5

these are mostly in context if there was a fire but the business DID have a CP:
- ensures employees have a livelihood
- suppliers are guaranteed orders
- customers won’t be let down
- local community won’t see a fall in income
- government won’t lose tax

Question 6

what is the OVERALL benefit of a contingency plan to its stakeholders?

Answer 6

reassures stakeholders that managers are aware of the main risks faced by the business and that they are ready to deal with a problem if it actually occurs

Question 7

explain the nature of crisis management?

Answer 7

the process by which an organisation deals with an event that threatens harm to the business and its stakeholders, usually straight after the event

Question 8

what is the purpose of crisis management?

Answer 8

ensures events are dealt with properly in order to minimise risks and threats to the business

Question 9

how are crisis management similar from business to business?

Answer 9

the essence of crisis management is an effective contingency plan

Question 10

what are the solutions to a crisis?

Answer 10

• making sure insurance policy is up to date
• crisis budget
• private healthcare
• data monitoring
• trial runs