Business Continuity Management as a Tool to Solve Problems That Occurred after a Serious Dry in Australia - Case Study Example

Business Continuity Management (Insert Name) (Institution Affiliation) The term business continuity refers to a planning process which provides a framework that ensures resilience of a business to challenges and threats. This approach usually help in ensuring that the key customers, business brand, key suppliers and the business reputation are maintained as well as long term business survival in case of natural disasters (Australia, 2004). From an economic perspective, natural disaster refers to an event that causes perturbation to the normal functioning of economic system with a significant negative impact on production factors, suppliers, assets, consumption and employment. Over the past years, Australia has experienced a range of natural disasters which include floods, droughts, severe storms, heat waves, landslides and earthquakes. These catastrophic events are usually associated with great financial hardship for communities, businesses and individuals. This paper depicts major issues that emerged after a severe drought that befell Australia between 2002 and 2006. The widespread drought mainly affected the Southern and the Eastern Australia which recorded the lowest income from agriculture since 1994 and 1995 period. The paper particularly examines the interdependence of resources, the continuity and emergency response and recovery from the drought and the communications issues regarding stakeholder needs, perception of the situation, and engagement with the process. Majority of customers require resilient suppliers that are reliable at all times (Castillo, 2005). The viability of businesses and companies depends on its resiliency especially in times of crisis. Reliability is core aspects in response, rebuilding and recovery from a natural disaster. In the absence of a resilient public or private sector, the ability of communities to thrive again after a major incident will slow down to an unacceptable rate. Even the smallest period of down time can hinder the survival of a company. The main objective of business continuity management is to ensure timely delivery and resumption (Castillo, 2005). Every organization business strategies and major decisions are based on assumption that the business is continuing. Any event that violates this assumption is a significant occurrence in the life of any organization and it impinge directly on the organizations ability to fulfil its business objectives and that of its customers whose livelihood is involved. BCM is thus a part of risk management that establishes cost effective treatments should an outage or a natural disaster occur. The Business Continuity Planning is initiated when a risk event or a natural disaster occurs that has a business interruption consequence. The business interruptions that are of concern from a continuity viewpoint are referred to as outages (RiskCover, 2009). These events will cause a significant disruption to or loss of key business activities over a prolonged period of time. It follows that such events will have a high impact on and severe consequence for the agency. One of the key elements of Business continuity management is program management and initiation. In the event of a natural disaster, the organization should establish the need for a business continuity management program including recovery objectives, resilience strategies, operational risk management, business continuity and crisis management plans (Hiles, 2010). The second key element of BCM is risk evaluation and control. It is the obligation of a business or an organization to determine in advance the risks that can adversely affect its resources as a result of business interruption; the loss it can cause and the control measures needed to mitigate or completely avoid those outcomes (Wallace & Webber, 2010). The drought in Australia, despite adversely affecting the agricultural producers, it also affected the economic status of the general population (Lloyd, 2012). These effects diffused down to the other businesses even those does not rely on the climatic condition. The organizations thus need to properly assess the indirect impact of a natural disaster on the business operations. Third, the business impact analysis will identify the impact of the natural disaster or business interruptions and the techniques that can be suitable for quantifying and qualifying such impacts (Warren, 2010). Business impact analysis can also help an organization in identifying time critical functions and set proper interdependencies and recovery priorities so that recovery time objectives can be comfortably established and approved. Large scale natural disasters regularly affect the communities in Australia, causing huge damage and destruction of property. The 2002 to 2006 drought in eastern and southern Australia has shown that both individuals and business corporations are vulnerable to these severe events which usually have a long lasting on the welfare of the societies and on the economic development of both individual and business corporations (Zhang & McMurray, 2012). Thus every business need sound business continuity strategies in order to enhance recovery time as well as the critical functions of the organization. In addition, the emergency response, operations and the readiness of the organization to respond to a natural catastrophic disaster in a coordinated effective and timely manner is a key element to business continuity. After the 2002 to 2006 drought in Australia, the international institutions, insurance companies and media published numerous assessments of the cost of the disaster on the economy. However, the assessments were based on different approaches and methodologies which resulted in various discrepancies which were brought about by the multi dimensionality in the impacts of the disaster and the redistributive nature of the natural disaster which made it unclear of things to be involved in cost assessment. This is partly because the disaster was consistent and at the same time slow on setting. The effects of the disaster on the general economy can be classified into two categories namely direct losses and indirect losses (Wallace & Webber, 2010). Direct losses refer to the immediate consequences such as reduction in farmers’ income and agricultural yield. Indirect losses on the other hand refers to the impact of the disaster on the economic sector that traded with the agricultural products as well as impact on inequality and poverty, increase in national debts and reduction in taxes collected by both state and commonwealth governments. Unlike other natural disasters such as heat waves, bushfires, floods, earthquakes, tornadoes and hurricane which results in visual damage, the drought developed quietly slowly and it lacked structural and highly visible impacts (Wallace & Webber, 2010). The slow pace and longer duration of drought makes it difficult to quantify the overall economic impact. The Australian drought had severe economic impacts. The failure of crops led to sharp increase in the prices of food products including meat and consequently inflation shoot to 3.5% in 2006. The higher inflation then prompted the central bank to increase the interest rate. This shows that the resources are interdependent and failure of one affects the whole system. To ensure business continuity, an organization needs to put in place proper disaster response strategies to assist or intervene during or immediately after a natural disaster and meet the needs of the affected parties. Furthermore, since disasters are not unpredictable or unavoidable events but unsolved development problems (Miller, 2011). A company must have a disaster risk reduction plan to minimize its vulnerabilities and risks throughout the society in order to minimize the severe impact of the disaster and facilitate sustainable development. This is achieved through risk assessment and management. Disaster risk management is concerned with administrative decisions, operational skills, organization’s capacity to implement strategies and policies and the ability of a business to cope with societal needs aimed at lessening the impact of the disaster. Dealing with natural disasters is not simply a matter for governments. Families, individuals, and the community as a whole play a role in determining how well communities are safeguarded from natural disasters and the degree of resilience of communities. In addition, research organizations, professionals and the private sector play a key role in risk mapping and mitigation. Disaster mitigation refers to measures that are taken in advance or immediately after a natural disaster which are aimed at decreasing or completely eliminating the impact of the disaster on the environment and society in general (Hiles, 2010). In Australia, the commonwealth investment in natural disaster mitigation by all three levels of government is conservatively estimated to provide a rate of return of 15% (Zhang & McMurray, 2012). The commonwealth also emphasize on planning and warning systems in order to reduce disaster cost and damage. The Australian government has a disaster mitigation program that is designed to contribute to safer and more sustainable communities that are able to withstand better the impacts of a natural disaster and ensure business continuity. In conclusion, the company management should ensure proper risk management strategies are in place in order to prevent outages from occurring in case of a natural disaster. Through business continuity planning, the organization should also ensure that it is in a good position to respond appropriately should such an event occur (Williams, 2012). Business continuity management is thus the part of the risk management that establishes the cost effective treatments in case on interruption if the business activities (Council, 2012). As such, it is concerned with the overall risk management, mitigation, and the pro active treatment of those events. Since the main objective of business continuity management is to make sure the availability of all key business resources that are required to support essential business activities is uninterrupted, it calls for strong leadership and excellent communication to ensure timely disaster recovery. References Australia, C. o. (2004). 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