Business Continuity Management Analytical Essay

Introduction

The current world situation, accidents and catastrophes are common phenomena. There are a lot of different disasters which lead to human deaths, inconveniences in the society and economy, the loss of million dollars of properties, etc. These numerous accidents and catastrophes result in economical, social and environmental losses and they influence many people and geographic locations.

Different countries develop strategies and measures to mitigate complications associated with disasters. Modern day threats are associated with industrialisation and sociological factors. For example, terrorism attack is a sociological generated incident that results in human targeting other people believed to be against their ideological or philosophical views (Bramble 2006).

There are other types of disasters which occur in the modern world and are caused by industrialisation. They are usually associated with negligence or errors in the side of systems operators (Cockell 2003). Three Mile Island and a number of different Airline catastrophes are the examples of such disasters.

Even though emergency measures are in place, there are situations when the contingency plan cannot fulfil its requirements and thus industrial accidents usually occur. Business continuity management is a process that indentifies any business threat (such as a natural disaster) and prepares contingency measures.

This kind of management is extremely important as if to consider the recent crisis of 2007, it may be concluded that there are a lot of different disasters which may lead to the instability in economics provoked by both human activity and natural disasters. There are a lot of examples when human activity was not the reason for the crisis, but it was the nature which has decided to play a trick.

The main purpose of the report is to consider the emergency, crisis and disaster. It is important to define each of those, consider practical consequences by the example and compare and contrast business continuity management, crisis management and disaster recovery as the main means for combat with numerous problems which are caused by human or natural activities.

Business Continuity Management and Crisis Management

The nature of business continuity and crisis management

Numerous organisations and legislations have been formed to ensure that threats and risks are controlled (Bramwell 1997). Still, the existence of such activities as business continuity management, disaster recovery and crisis management state that there are a lot of problems which need consideration. There are many different definitions of business continuity management which are considered to be correct.

Relying on the information provided by Hiles (2007), business continuity management is “the identification and protection of critical business processes and recourses required to maintain an acceptable level of business, protecting those resources and preparing procedures to ensure the survival of the organisation in times of business disruption” (p. 28).

Being similar to business continuity management, crisis management also reacts to different critical situation and tries to consider the measures to prevent those (Heng 2007). If those processes were followed properly, Augustine (2000) and Fink (2002) would not report about the stages the companies should implement in case of the disaster which leads to long term crisis.

To consider the relation between business continuity management and crisis management in detail, the effectiveness of these two procedures should be identified, as well as the assessment of the training procedures should be dwelled upon in the regard to preparedness of those to crisis.

The importance of effective business continuity and crisis planning

We are going to check the objectives of business continuity management and crisis management and this information will help us understand the reasons of these two practices to be so important. The main objectives of business continuity management are as follows,

1. the identification of the framework for evaluating business processes with the purpose to manage well-structured business,
2. the creation of the cost-effective and operable recovery plan which is aimed at elimination of the problem consequences,
3. the minimization or even elimination of the crisis impact on the company,
4. the ensuring of the “effective risk management and the driving of business continuity management: shareholder value, risk, reward, and control” (Hiles 2007, p. 29).

Still, if to evaluate the definition of the business continuity management and its objectives, it is possible to state that business continuity management has nothing to do without crisis management.

One of the main reasons for such statement is that business continuity management waits for the consequences and only then measures are taken, while if crisis management is not involved, the problems may be too great which may result in long term complications.

Gottschalk (2002) states that crisis management is really important as without crisis management and without a plan aimed at accomplishing the goals of the company “crises grow and relationships are damaged in the long term, short term, or both” (p. 2). In other words, when something goes wrong, there should be the department which is responsible for reacting to the situation and creating a plan for immediate actions.

Moreover, the whole staff should be informed about the disaster as the team work is necessary. The failure to provide the actions mentioned above may lead to the great problems in the future and the short term disaster may lead to long term crisis. Augustine (2000) and Fink (2002) state about some specific stages which should be taken if some disaster takes place and leads to crisis in different spheres of human life.

Augustine (2000) is sure that there are 6 stages for crisis management,

1. “avoiding the crisis”,
2. “preparing the crisis”,
3. “recognizing the crisis”,
4. “containing the crisis”,
5. “resolving the crisis”,
6. “profiting from the crisis” (p. 7-27).

Fink (2002) offers four stages which may be considered as the recovery from the crisis step by step,

1. “prodromal crisis stage”,
2. “acute crisis stage”,
3. “chronic crisis stage”
4. “crisis resolution stage” (p. 20).

Relationship between business continuity and crisis management

Having considered the stages of the business continuity management and crisis management, it may be easily concluded that the activities of these two teams are interconnected. According to Wieczorek, Naujoks and Bartlett (2002), “crisis management will best complement business continuity management at its various levels, while providing equivalent escalation and direction routes” (p. 89).

Regarding to this, crisis management may be focused on further work of the company in the normal regime, while crisis management should focus on dealing with the problems which are occurring or which should be considered in detail due to their specific abnormality (Wieczorek, Naujoks & Bartlett 2002, p. 89).

If to remember about the definitions and about the objectives of these two processes, it may be easily concluded that first comes crisis management which tries to reduce the negative effect of the disaster as soon as possible, to identify the main reasons of the problem and create a fast plan directed at solving the problem. Business continuity management is based on the results of the work provided by the crisis management.

Critical review and assessment of training and exercise preparedness to crises

Considering the modern world situation and referencing to some specific cases which show the flow and the consequences of crisis in Augustine (2000) and Fink (2002), it should be mentioned that it is important to be prepared to the crisis. Bland (1998) identifies several stages of recovery from crisis and preparation is one of it.

Both Augustine (2000) and Fink (2002) mention the pre-crisis stage when there is nothing known about the problem, but the measures should already be taken. Avoiding the crisis stage is aimed at prevention the crisis still, it is impossible to eliminate those; “an executive must try to minimize risks and to be certain that those that must be taken are commensurate with the returns expected” (Augustine 2000).

Fink (2002) also mentions pre-crisis stage called prodromal crisis stage. The main purpose of the company is to see the signals of the coming crisis and either to reduce the risk to minimum or to get ready for it.

The ideas offered by these two scholars in their reports also state that at these stages the staff should get ready for the coming problems. The necessary training should be organized aimed at teaching the staff to manage the crisis and to act when it comes.

Emergency and disasters

Nature of emergency and disasters

Disasters have become frequently occurred phenomena in the modern world. While some scholars identify a disaster as a problem which can take place any time because of any reason (Lavell 2004), Bankoff, Frerks, and Hilhorst (2004) state that “disasters are not simply the product of one-off natural phenomena, but the result of environmentally unsustainable development project over time” (p. 3).

A disaster can be defined as causes that result in negative effects on the society, economy and environment (Moodie 1992).

Classification of disaster and emergency (manmade and natural)

Generally, there are two major disasters, manmade and natural disasters. Manmade disasters are associated with man activities and may occur because of human intent, negligence, an error or a failure of a system. This means that manmade disasters are those that occur because of human hazards without acting in accordance with adequate emergency management measures.

Moreover, manmade disasters can be divided into two parts, technological and sociological ones (Allyn 1993). Sociological disasters are associated with human negative behaviour towards other people, organisations or ideologies. Examples of sociological disasters are civil disorder, terrorism, war and crime. An actual example of sociological disaster is the 9/11 bomb attack in United States of America.

Technological disasters are associated with advancement of human needs and development or equipments and accessories that fulfil human personal and societal needs. Some examples of technological disasters are industrial hazards, structural collapse, hazardous materials and transportation. A good example of technological disaster that has occurred is the Chernobyl Nuclear Explosion in 1986 (Greenberg 2006).

Three Mile Island is another technological disaster which took place in the USA some years before Chernobyl. Manmade disasters are common because of psychological or sociological factors. For example, the terrorists attack and disasters are associated with sociological backgrounds that do not reflect the position of current culture or aspirations (Palmer 2006).

Natural disaster does not have any connection with human beings, but it crop ups naturally and sometimes harmfully affects the activities of human being.

The extent of damage associated with natural calamity will be determined by the capability and determination of population to resist and manage the disaster (Arnold 2000). Thus, a natural hazard at times may not be caused by natural agent but may result because of vulnerability of the inhabitants.

Nevertheless, like manmade disaster, natural disaster may be classified to what causes it. Land movement is a natural disaster that is caused by the way the soil or earth moves on earth e.g. volcanic eruptions or earthquakes.

Water disasters are caused by enormous amounts of water entering human population locations through such issues as tsunamis, floods and limbic eruptions. Moreover, weather disasters are caused by heat waves, cyclonic storms, blizzards and droughts (Sharer 2005).

Factors Contributing to Crisis/Disasters

Crisis definition

A crisis is considered to be a sudden and widespread disaster. It usually affects a large population resulting in enormous economic, social and environmental severity (Hawthorne 2003). The reports provided by Augustine (2000) and Fink (2002) mention some specific crisis which have been discussed above.

Practical example of a crisis

There are a lot of different examples of crisis which were caused both by natural phenomena and by human activities. Thus, if to consider the report provided by McChesney (2003), it may be concluded that neither government nor other powerful people of the world can influence the situation if there are a lot of factors which are ready to cause the problem.

The wrong or contradicting information may also cause the crisis, like it has happened while Three Mile Island crisis (Fink 2002). It is reported about the greatest disaster of all times in the history of the commercial nuclear power in the USA.

The main reasons why the problem occurred were mistakes and misjudgements. It should be mentioned that the main problems dealt with were the lack of communication around the critical safety matters (Walker 2006).

Fink (2002) states that “while the major factors that turned this incident into a serious accident was inappropriate operator action, many factors contributed to the action of the operators, such as deficiencies in their training, lack of clarity in their operating procedures, failure of organisations to learn the proper lessons from previous incidents, and deficiencies in the design of the control room” (p. 7).

There are many cases when the consequences of the disaster are felt many years after the problem seems to be solved, like Chernobyl (Borodzicz 2005). So, it may be stated that even if all the methods are perfectly applied to problem elimination, the consequences may bother humanity many years after the measures are taken.

How crisis management differs from risk management

Much was said about crisis management, but there was said nothing about risk management. The main idea of risk management is to analyse the possible risks. There are a number of reasons which identify the importance of risk management. First, it is the best instrument for identification of the possible risks. Second, it is effective in evaluation and response to those risks.

Third, it is helpful in providing the ways for improvement the responses and measures of the disaster consequences. Keeping this in mind, it is possible to state that crisis management is not the alternative to risk management, as it is rather the “consequence of risk management failure” (Chapman, Ward & Ward 2003, p. 15).

Thus, this is the main difference between risk management and crisis management. For example, when Augustine (2000) reports about the airline crashes, he dwells upon crisis management as the risk management may not be applied at the moment due to its timeline.

Similarities and differences between business continuity management, crisis management and disaster recovery

While the main purpose of business continuity management is to wait until the main consequences of the situation can be considered, crisis management is involved in the problem solving immediately after the problem has occurred (Stationery Office (UK) 2010).

Disaster recovery is the process which is implemented when the first steps for the problem solving are taken and it is necessary to put the company at the pre-crisis level of development.

There is one more crucial difference between business continuity management and crisis management, “where business continuity management has a specific focus on planning for, and managing, recovery from tangible and physical disruption, crisis management has a broader design that includes response and recovery management” (Hiles 2007, p. 49).

Crisis management and disaster recovery are the facilities which are directed at one and the same issue but have different methods. Crisis management is aimed at immediate reaction to the problem, identification of its causes and fast consideration of the plan which can be helpful to reduce harmful effect and return the pre-crisis level (Curtin, Hayman, and Husein 2005). Disaster recovery is a longer and more complicated process.

The decision is based on the information and actions provided by the crisis management.

The crisis management is aimed at conducting some actions which should reduce the consequences of the disaster as soon as possible, while the disaster recovery is directed at long term period and may last for several years up to the moment when the situation is changed to the pre-crisis level.

In conclusion, it should be stated that crisis management is mostly focused on pre-crisis environment while disaster recovery pays attention to the post-crisis environment (Rothstein 2007).

The objective of all these facilities is the same – to help the company to recover from the disaster as soon as possible and to return to the usual stage of development. At the same time, the difference is vital.

Crisis management works immediately after the disaster has occurred (like those after the airline crashes in Augustine’s report), business continuity management actions are provided when the immediate actions took place and the information about the problem occurrence is considered (The example may be the consideration of the consequences of the Three Mile Island crisis and the attempts to make the station function), disaster recovery takes place when the situation is stabilised but the activities are on the low level (Chernobyl may be used as the example).

Thus, these three facilities are no way interchangeable and they should be considered as the stages of one and the same process, which is directed at elimination of the consequences of the disaster or crisis.

Conclusion

In conclusion, there are a lot of different facilities which are aimed at helping different companies recover from crisis. The situation in the modern world is too unstable to leave the risk management without attention. Crisis management, business continuity management and disaster recovery are the main stages which should be taken no matter whether the manmade or natural disaster takes place.

Still, one of the main reasons for disaster occurrence remains the failure in the risk management process. The practical cases prove this statement and show that the effective management and quick response to the problem may result in fast and effective problem solution.

At the same time, having similar objectives, crisis management, business continuity management and disaster recovery are directed at different stages of the company recovery from crisis. Moreover, the failure at any of the stages may lead to the long term consequences which are more difficult to eliminate than short term ones.

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