Contingency planning

Contingency planning is the process of preparing an organisation for unexpected or unwanted events.

Types of crises Examples of unexpected or unwanted events that could impact on businesses include: Fire and flood Accidents Technology failure Workforce strikes Natural disasters e.g. earthquake

Stages in contingency planning 1. Realise the need for contingency planning 2. Identify potential crises and the consequences of these 3. Assess the likelihood of these events happening 4. Analyse ways to prevent the crises happening 5. Develop plans to deal with the events:  Minimise the negative impacts  Plan for how business operations will continue 6. Carry out training and crisis simulation

Benefits of contingency planning Reassures stakeholders such as staff, customers, shareholders and possibly the local community Effective business continuity reduces the negative impact of crises on the stakeholders Helps maintain a better reputation Can create competitive advantage

Limitations of contingency planning Can be costly and time-consuming for planning, training and practising Contingency plans need to be reviewed on a regular basis as the business environment changes