Contingency Planning and Crisis Management (AQA A Level Business): Revision Note

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

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 

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

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

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 

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