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Contingency planning


The news

The United States regularly launches simulated radiological and biological attacks on cities to test its disaster preparedness. In 2000, when the domestic terrorism threat was not viewed as a top priority, very few top officials participated in these drills. Since the deadly September 11, 2001 attacks on America, the attention paid to these exercises has taken on a new urgency as cities realise their vulnerability to terror attacks. The exercises are designed to expose any communications and co-ordination problems between federal, state and local officials.

Twenty five federal agencies are now involved in these exercises as well as numerous state and local agencies and departments. Government agencies at all levels have invested more money to improve response time, streamline communications and improve the ability of hospitals to handle a disaster.

The theory

Business likes certainty and tries to plan ahead to reduce risk and uncertainty by as much as it can. However, things do arise that catch any business lacking. Some firms seem to struggle through and practise what is known as crisis management. That might suit some but the majority does try to look ahead and plan for what might happen. To be fair some issues that arise can be predicted with some certainty. The pound sterling will fluctuate on foreign markets and doubtless we will have a water shortage sometime this summer but what of those events that happen with little, if any warning? We can insure against them and though that costs money it does reduce the risks involved in business. Indeed, it is risk analysis and assessment that we are looking at in this part of business studies. Follow the links below to see information on related theoretical topics.

Contingency planning

Contingency v crisis?



  1. Describe what is meant by the term 'contingency planning'.
  2. Outline the steps in drawing up a contingency plan.
  3. Examine the advantages to the US government of its decision to increase its preparedness for possible terrorist attacks.
  4. Explain how contingency planning differs from crisis led management.

Suggested answers