Contingency Planning

• What is contingency planning?

  The process of identifying potential future events or risks and creating pre-planned responses in case these events occur
• Contingency planning is a proactive measure while crisis management is a reactive measure
• What are the benefits of contingency planning?

  • Minimises disruption - helps operations continue even if a problem occurs
  • Improves speed of response - avoids confusion
  • Protects stakeholder interests - builds trust with employees, customers and investors
  • Reduces financial losses - by ensuring continuity and avoiding total shutdowns
• What are the disadvantages of contingency planning?

  • Costly and time consuming - planning for many unlikely events can use up resources
  • Overconfidence - businesses may become complacent
  • Rapid change can make plans outdated
  • Employee resistance - employees may not like drills
• What are examples of contingency planning?

  • Airlines planning for IT system failures
  • Retailers planning for fuel shortages affecting logistics
• When is contingency planning most useful?

  • For businesses with safety-critical operations (e.g. hospitals, nuclear energy)
  • When there are key dependencies (e.g. reliance on a single supplier or location)
  • When reputation risk is high (e.g. airlines)
• What topics does contingency planning link to?

  • Leadership and communication
  • Ethics and CSR (e.g. ensuring customer safety)
  • Risk