CONTINGENCY PLANNING
a category of Political Risk
.
compilation of  lectures notes by Prof. Richardson for use in his various international business classes
last updated 2007 Oct 01
see also    www.witiger.com/internationalbusiness/politicalrisk.htm
see also    www.witiger.com/internationalbusiness/politicalriskcontingencyplanning.htm
see also   www.witiger.com/internationalbusiness/geographicenvironment.htm
see also    www.witiger.com/internationalbusiness/politicalriskdefensiveintegrative.htm
see also    www.witiger.com/internationalbusiness/personalrisk.htm
and  www.witiger.com/internationalbusiness/alanbell.htm
 
This web page has many audio clips - just click on the icon (like the one to the left) and you can hear Prof. Richardson's voice adding additional information to topics on the page. turn on your speakers to hear audio clips
..
 
INTRODUCTION , The topic of Political Risk is very large. For the sake of being able to divide this large topic into "teachable" components, I have created this particular unit dealing just with the immediate considerations of Contingency Planning.

WTGR

.
KEY
POINTS
, Alan Bell explains that when companies are assessing the possibility of developing a contingency plan, and the expected security requirements to make it work, it is necessary to ask one tough question.

How much will it cost to develop a contingency plan, and increase our security where risk situations warrant?

compared to NOT doing this, and paying for the consequences if something does happen?

For some large scale projects overseas, it could cost millions of dollars to get the operation "up and running" after a disaster, which would also see the company fall behind other businesses that did have contingencies in place.

Or, a company could spend tens of thousands of dollars on security and contingencies so if a bad thing happens, the company can respond, and recover.

Or, a company can do nothing, and just hope that they are lucky, and nothing bad every happens.

Unfortunately, 
   o with terrorism reaching all corners of the globe
   o with corporate competitiveness resulting in some nasty competitor behaviour
   o with social-cultural/religious tensions boiling over in many countries
   o with weather extremes causing massive disruptions
it is very unlikely that you can just be lucky and not get hit

WTGR

.
Risk 
Analysis
KEY
POINTS
This company, Hill & Associates,  used some of  Prof. Richardson's material, so we have in turn quoted and linked to them.

http://www.hill.com/archive/pub/papers/papers.asp?yr=2003&mn=11
.
Risk 
Analysis
Michel Gilbert of Hill Associates provides an Introduction to Risk Analysis

"The risk analysis is the most complex part of a properly conducted disaster recovery plan. However, a clear understanding of the primary goal of a risk analysis, a grasp of the critical terminology, and adherence to a well-structured process renders this complex activity manageable."

The Goal of a Risk Analysis
"Disaster recovery planning seeks to provide a level of protection for corporate assets that will hopefully ensure a company's survival in the face of disastrous events. Before a protection strategy can be implemented, three basic questions must be answered."

   o What am I protecting?
   o What am I protecting against?
   o How much money, time, and effort should I expend?"

.
Risk 
Analysis

broken down

The fundamentals of Contingency Planning requires that you first understand the Risks, which requires some degree of "Risk Analysis" to understand
   o what am I protecting, what do I have that is important
                   o sometimes this requires an inventory of assets in order 
                       to have a dollar value on what is at stake
   o what am I protecting against, what are the specific risks
                   o this can be very complicated and is effected by
                      human factors, the economic and technological environment,
                      as well as weather extremes and other geographical 
                       circumstances
   o how much am I willing to spend to protect these assets
                   o how much money am I willing to spend
                                      o costs of people to act as guards
                                      o money for defences
                                      o money for countermeasures
   o time: how much time will I dedicate 
   o how much effort - what part of job descriptions will I task to this

WTGR

.
Risk 
Analysis

Terms
Used

Risk Analysis Terminology

To better understand discussions on Risk and Threat Analysis, it is necessary that readers understand what is meant by some terms particular to this part of the security industry.

   o Asset: something worth something
           o it could be a human asset - a person you need to do something
           o it could be a facility, structure or building
           o it could be a piece of valuable equipment or a vehicle
           o it could be something related to communications and transportation
           o it could be data, such as detailed customer information
                 - basically anything of value that you want to protect

basically, the definition of an asset is something which is valuable for your company to have to carry out the critical aspects of business
terms from Alan Bell of globerisk.com and Michel Gilbert of Hill Associates
.
Risk 
Analysis

Terms
Used

   o Threat agent: Any person or thing that can do harm
threats by themselves are not a problem, it is a problem when that threat is facilitated by a person "bringing it", or a situation causing the threat to go from "maybe" to "now"
.
Risk 
Analysis

Terms
Used

   o Vulnerability: A deficiency that leaves an asset open to harm
any weakness which, left unprotected, could cause the company to lose productivity 
or something that threatens asset value; 
for example, soil erosion from clear cutting a forest may create a potential flood if the typhoon is strong that year, which could flood a mining project that another company had nearby in the same region 
..
Risk 
Analysis

Terms
Used

   o Exposure: Harm caused when a threat becomes real
In international business, an example of an exposure could the consequence of a particular currency rising very high, which wipes out the profit margin expected in an enterprise
.
Risk 
Analysis

Terms
Used

   o Countermeasure: 
    Any protective measure we take to safeguard an asset, and respond to an exposure
In the case of preventing against a flood, you could dig a large trench to divert flood water around the mine shaft so the drifts will not be flooded

In the case of preventing against political risk such as a violent change of government, you can hire a security force to repel looters and defend against small bands of soldiers that want to pillage your facilities

In the case of an I.T. failure, countermeasure could mean that corporate data is backed up at another location so if the main server fails, you have a back-up
Or countermeasures could mean that if you are hacked, you have the ability to not just know you are hacked, but actually do something to repell further attacks of the hacker, or even identify him to authorities

.
Contingency planning

what are the 
specific
risks

MEDICAL

List of specific medical risks and threats that Contingency plans are used for 
  • medical trauma in remote areas and the subsequent evacuation and treatment
  • Disease and plague
    • in late Sept 2005 the WHO World Health Organization broadcast alarming predictions that a pandemic stemming from the bird flu virus (presently killing people in Asia) could kill as many as 150 million worldwide
    • SARS 2003 could be considered an emergency that required carrying out Contingency Plans 
.
Contingency planning

what are the 
specific
risks

VIOLENCE

List of specific violent risks and threats that Contingency plans are used for 
  • theft of expensive equipment and recovery of important corporate data; 
  • kidnapping situations
    • kidnapping for money
    • kidnapping for political purposes
  • violent robbery and assault of executives; 
    • Mexico City, Moscow, South Africa, New York City, Detroit, L.A., Malvern !
  • extortion and threats against company operations, offices and facilities; 
  • security of communications and electronic countermeasures
.
Contingency planning

what are the 
specific
risks

List of specific risks from government problems that Contingency plans are used for 
  • municipal and regional government problems
    • power blackout, accident or sabotage
    • sewer flooding caused by heavy rains
    • road closures, earthquakes, flooding, tornadoes
.
.
see also   http://www.witiger.com/internationalbusiness/geographicenvironment.htm
.
..
..
contingency 
planning 
 

preventive measures

 

Plans
The following points are things a company can do in order to be able to respond appropriately when a risk situation effects the ability to carry on business as usual.
 
  • Ensure that all at-risk personnel, and their support staff and team members, understand the action items they need to follow in contingency plans.
    • meaning if the phones are out, you do this to communicate
    • if the electrical power is out, you do this
    • if there is extreme violence in the city, you go hide here
  • Invest in access to international security consultants and treat their services as part of your core resources. 
  • Incorporate security considerations into your initial plans. 
  • Identify security resources within your existing staff, including medical and first aid knowledge, language abilities, logistical and transportation expertise and so on. 
  • Develop security strategies with other Canadian companies operating in similar regions and situations of risk, including strategies for joint evacuation, medical assistance, terrorism incidents and perimeter security. 
.
contingency 
planning 
 

preventive measures

 

Personal Plans
Aaron C. was in MGTC44
he emailed Jan 29th, 2007 to make comments in response to what we had talked about in class with respect to Contingency Planning

Aaron said..

Dear Prof. Richardson:
While I was watching CBC news today, i see the Canadian gov't are promoting [to] us that we all should have a 72 hours plan. To me it seems like this is another kind of "contingency plan" and i think it will be helpful for all of the students.
http://www.getprepared.ca/index_e.asp
Sincerely, Aaron

WTGR wrote back to Aaron saying

I'll CC: my reply to the other C44ers cause your email makes a good point
- the big worry from government is
1. powerblackout caused by an ice storm,
2. or a sun spot surge, causing a power overloading and bringing on a blackout

-Because of government cutbacks in municipal infrastructure, it could be a week (or two) in some areas to get power back online
- and in a big city, it would take longer

My step-brother happens to be in charge of the physical-plant and generators for a large city hospital
- he says the generators can supply power, but

A. they can't run 24 hrs non-stop, they have to be shut down to cool the machine parts
B. they can only run as long as they have a fuel oil supply, and they only have a couple of days of fuel oil on the premises
C. by day 3 or 4 they'd have to get a truck to come in with more fuel ... BUT the truck can only make the delivery if it has gas and the gas pumps would all be shut down cause they run on electricity

- it has the potential to be a big big problem and something that Canadian businesses should think about

thanks again for your contribution Aaron

.
Risk Analysis Terminology from Alan Bell of globerisk.com and Michel Gilbert of Hill Associates
 
witiger.com
  CONTACT IMAIN PAGE I NEWS GALLERY I E-BIZ SHORTCUTS I INT'L BIZ SHORTCUTS I MKTG&BUSINESS SHORTCUTS I TEACHING SCHEDULE
.
  MISTAKES I TEXTS USED I IMAGES I RANK I DISCLAIMERI STUDENT CONTRIBUTORSI FORMER STUDENTS I
.
.