The Role of Business Continuity Management within the Organization - Coursework Example

The role of business continuity management within the organization and the role it makes in national resilience Student’s Name: Course Code: Lecture’s Name: Date of Submission: Introduction The goal of business is to create value to their customers in a manner that guarantees them market leadership and reward to the shareholders. However, the continuity or smooth operation of the business can be disrupted to various extents as a result of interruptions such as accidents related to human error, natural disasters, terrorism and utility disruption as a result of the basis that no organisation can have exclusive control over business environment. Moreover, they can be tied to environmental factors, economic factors and socio-political factors. These events are likely to impact on the overall productivity of business and ultimate performance (Hassanain & Al-Mudhei, 2006, p.62). Businesses constitute a significant portion within the economic system of a country and thus their disruption, especially in a given magnitude equally impacts on the resilience of a nation. Therefore, the same argument is valid for the case of a country where the identified factors pose threat & risk to the continuity of a country if not well anticipated & managed. Businesses should have continuity planning so that in an event of unforeseen hazard they can be able to rise up. For instance, McCafferty (2013 cited in Musgrave & Woodman, 2013, p.3) observes that “companies with robust plans in place recovered more quickly from the effects of extreme weather, contributing to the improved resilience of their company, their community and to the overall resilience of the UK”. Anchored on this realisation, the principal focus of the paper is to assess critically and outline the role of business continuity management both within the organisation and the contribution it makes to national resilience. The role of BCM in business organisations and in the nation’s resilience lies in its ability to ensure that organisations can continue to operate so as to attain company’s objectives & obligations to the consumer and maintain her market share (Tilley, 1995, p.49). The approach taken in this section is a two pronged answer. In the first instance, the paper examines the role of business continuity management within the organisation. Secondly, with realisation that business organisations and organisation occupies a core position on economic growth & development through delivery of goods & services and other social services, the paper outlines the significant contribution it makes to national resilience. Resilience is taken within the context of the ability to withstand or overcome disruptions. In discussing, the role of business continuity management in organisation, the entry point that depicts its significance to businesses emanates of out the definition of the said subject. First, let examine the role of BCM in business organisations. According to Business Continuity Institute (2005, p.8), BCM is “a holistic management process that identifies potential impacts that threaten an organisation and provides a framework for building resilience with the capability for an effective response that safeguards the interests of its key stakeholders, reputation, brand and value creating activities”. From this definition two significant categories of roles emerge out of it that are worth interrogating. The first is anchored on the platform that it empowers management to be in a position to pinpoint possible threats that might cause disruptions and their impacts. Secondly, BCM is critical in informing management on framework for developing resilience which in turn occupies a central position in safeguarding stakeholders’ interest, organisation’s reputation, brand image/ equity and value creating activities & processes. The first role is rooted in the ability of BCM in enabling management in identifying the probable impact that pose threat to the organisation. This is also referred to us as risk assessment. It is explicit that any action plan in BCM cannot be implemented without proper identification of the problem. As such diagnosis is an integral step in solution finding. Therefore, Pitt & Goyal (2004, p.89) notes that this preliminary step is critical in the formulation of BCM planning strategy and the action plan. This single initial step is important in informing in an iterative manner other steps such designing & development of BCP; formulation of continuity plan and in maintenance & updating. Karakasidis (1997, cited in Pitt & Goyal, 2004, p.89) indentifies six issues that make identification of potential impact significant. He posits that the whole process is core in establishing the principal needs and resources that are required so as to minimize the impact of the threat on people, premise, processes & place. Moreover, he notes that identification stage is preliminary in determining the expected recovery time for each functional areas and services within the business. Apart from the two identified earlier, identification encounter is central in guiding recovery priorities depending on the highest possible cause and magnitude. Identification is equally dominant in its role of informing strategist on the relevant human resources, tools & facilities required to support core functions of business during disruption. Further, the step is important in costing process where overall costs are estimated in an event that extended disruption occurs. Finally, it aids in the identification and prioritisation of resources needed to implement BCP. Secondly, there is the realisation that BCM is significant in informing an organisation on the suitable frameworks for developing resilience. Firms can incur extensive losses as a result of abrupt disruption inflicted on them by natural disasters and man made causes that might be short term or those with devastating consequences. This calls for the development of appropriate frameworks on how to respond to the same so as to curtail the impacts to minimal levels or restore the firm to its original position in minimal time as possible with minimal cost through continuity management & recovery planning (Pinta, 2011, p.56). In this regard, BCM frameworks offer a guarantee that impacts will be reduced to the minimal or acceptable levels, presents a window for ensuring an ultimate recovery of the business with the order of priority being to sustain critical activities that sustains core function of the organisation and lastly, the reassurance that businesses will thrive as it used to do earlier before disruption (Keith, 1995, p.50). Botha & Von Solms (2004, p.331-332) observes that irrespective of a business size, business continuity management framework applies a seven step methodology in a continuous manner. Within the framework, first it is imperative to engage in project planning phase where all engagements required to guarantee success in BCP are methodologically planned. Secondly, under the framework business impact analysis is conducted so as to identify critical processes within the organisation. Thirdly, business continuity strategies are identified as per the impact analysis. Fourth is the implementation of the continuity strategies. Fifth is continuity training where relevant personnel are continually kept abreast with new developments. Sixth is the continuity testing phase that aims at identifying loop holes if they may exist and how they can be sealed. The last is the continuity plan maintenance that’s ensures the plan is constantly updated as per the changing needs. Such endeavours identified above constitute the holistic address towards resilience. Resilience is about the capacity of the affected entity to adapt through resistance or change so at restore or sustain acceptable echelon of functioning structure (Hemond & Robert, 2012, p.411-412). Ultimately the hallmark of BCM is embodied on its cause- effect relationship. In this regard, Smith (2003, p.27) notes that with well BCM system in place, businesses are sure that they can adequately protect their reputation & brand image; production & service delivery will continue; with production continuing, profitability is guaranteed; their employees are guaranteed of safety; they are in a position to curtail effect of business continuity/ interrupting events/ crises on consumers; restrict the impact after interruption not to go beyond the organisation; assets are protected; attain expectations required by regulatory authorities & insurances companies; opportunity to depict to the external world (stakeholders, markets & media) about their institutional accountability & corporate social responsibility and lastly is the hallmark of the whole process which is survival. Subsequently, it is imperative to examine these points listed above. With an appropriately formulated BCM framework in place, business organisations are sure that they production processes would continue even in an event that disruptions occur since they have fall back plans in countering the same and measures put in place to ensure continuity of key business activities. For instance, Coullahan (2010, p.334); Low Liu & Sio (2010, p.221) notes that in the event of major catastrophe, 90% of small businesses never recover and that only a paltry 43% of the companies affected does resume operation and that by the second year after the disaster, only 26% of the 43% of companies who re-opened would be surviving. The same is corroborated by Musgrave & Woodman (2013) who indicates that 77% of businesses are continually disrupted by the winter weather. The essence of such experiences and discontinuation of production and services is as result of not having BCM in place so as to enable business organisations respond in a planned and coordinated manner (Low Liu & Sio, 2010, p.222). An example of how BCM guarantees continued productivity is within the domain of scheduling for renovation in occupied facilities. In most cases, industrial plants and facilities requires renovation so as to keep the plant at its optimum. However, such processes if not well planned for can lead to disruption of production. Nevertheless, is a company is able to schedule renovation in occupied facilities through off-hour work or through a phased implementation processes, they are able to guarantee continued productivity (Hassanain & Al-Mudhei, 2006, p.65). Ability to sustain production during disruptions is equally important in guaranteeing profits since profit emanates from sales and sales cannot occur without production. The important aspects within the discourse of BCM are the contingency planning and disaster recovery planning (DRP). Contingency planning offers a platform of how to undertake all businesses processes as business engage in recovery process after any given disruptions resulting from disasters of other actions such as data loss. Within contingency planning, BCM practitioners target at pinpointing the functional areas of a given business, simulating probable disaster experiences and formulation of possible responses or action plan for countering the identified concerns. To an extent it can be argued that contingency planning is more of a proactive measure before the actual event occurs. On the other hand, once the experience has occurred, the disaster recovery planning (DRP) becomes significant as it the process of normalising functional areas back to the position they used to be in (Botha & Von Solms, 2004, p.329). The next significance BCM relates to organisation’s reputation and brand awareness. Brand offers a business platform in which they are able to differentiate their products from other competitors. The ability to differentiate the product from competitors is a sure way of gaining market leadership. Nevertheless, this is only attainable through creation of brand awareness and brand equity. However, the reputation of an organisation can be detrimental to brand awareness and equity, especially if negative aspects are associated with the parent company (Datta 1996, p.799). For instance, imagine a situation where employees perish inside industrial plants as a result of lack of emergence preparedness and risk management plans. This is likely to impact on their reputation and thus, reduce awareness and sales. Business reputation among the public and stakeholders is an important aspect as it impacts on profitability of an organisation, brand awareness & brand equity, such as perceived brand quality, brand loyalty and brand association & awareness (Yoo, Donthu, & Lee 2000, p.195). Organisations as moral agents are expected to adhere to the ethical expectations of a society (Donaldson & Dunfee, 1994, p.254). Additionally, so to avoid legal fines and restrictions in accessing markets, business organisations have to adhere to legal provisions such as occupation safety & health procedures (Bowie, 2012, p.6). If organisations cannot manage associated disruptions in relation more disruptions are likely to occur such as industrial action by employees and boycott of product by consumers. A well developed BCM framework important in protecting business reputation as it offers internal mechanism of how to protect massive side effects without necessarily transcend beyond the organisation’s boundary which even might call for intervention by regulatory authorities. The third point worth discussing relates to how BCM elicits regulators confidence in a business organisation. In reality, there are external forces that businesses cannot control. However, businesses can place various measures so as to counter these extreme externalities. This is critical in creating confidence in the regulators such capital markets authority, communications commission and national environmental management authority. Within the discourse of regulators confidence and BCM, application of best practices so as to elicit comes into play. Javelin Technologies (2004 cited in Codrington (2004, p.174) defines best practice as “a process, technique, or innovative use of technology, equipment or resources that has a proven record of success in providing significant improvement in cost, schedule, quality, performance, safety, environment, or other measurable factors which impact an organization”. BCMs role as factor in ensuring regulators confidence squarely falls on its capacity as the overall encapsulating theme in all process involved in the management of disruptions. Smith (2003, p.28) indicates that BCM is the unifying process is disruption recovery as it offers the overall framework. As such, it covers issues relating to knowledge management, health & safety, risk management, security, communications & public relations, emergency management, facilities management, crisis management, human resources, IT disaster recovery, health & safety and environmental management. The identified framework by any given business organisation is critical in protecting business by ensuring that they operate as usual or close to that expectation through ensuring the restoration of critical function and work are recovery among others (Keith, 1995, p.50). Fourth, BCM is significant in protection of interest of various stakeholders in the company. Discussing stakeholders, the three most important stakeholders are the consumers, suppliers, shareholders, employees and management. For purpose of discussion, let narrow on employees, shareholders, shareholders and consumers. Employees’ goal is to offer labour in return to monetary reward given by the company. If a company is not in operation, it implies that it cannot reward employees as employees are paid as result of the sales emanating out of production. Consumers expect their favourite brand to deliver the goods, even in time of crisis for consumption purposes. Therefore, the faster the firm restores its line of production the better it is for consumers. On the other hand, investors/ owners/ shareholders within the framework of shareholder value are interested in the returns on the investment they made (Iamandi, 2007, p.7). However, during any interruption or disruption, the above named expectations are not possible because continuity has been affected. Therefore BCM is important in protecting the expectations of various stakeholders in a business (Low, Liu & Sio, 2010, p.221). In a nutshell, from the above discussion, the realisation is that BCM plays a significant role in businesses by aiding them in identifying impacts of threats. Additionally, the BCM function is imperative in informing framework for resilience which equally has a significant position in ensuring protection of stakeholders’ interest, the reputation of the organisation, brand image and creation of value since the implementation of BCM during interruption periods ensures that there is maintenance and operation of functional areas/ core functions such as production & service delivery. Subsequently, this implies maintenance of profitability, reputation management, investor confidence & share value, regulator confidence and ultimately the long term survival of the business in its area of operation. Now let the attention turn to the contribution BCM makes to national resilience. To determine this concern, the paper adopts a double fronted approach. In the first instance, it is imperative to try first to establish the nexus between business organisation and the rest of the economy so as to make it easier for vivid picture creation of its role in the macro- environment. In this regard, the paper examines how BCM practices within organisation contribute towards national resilience. The role of BCM through businesses in ensuring national resilience is a function of the fact that BCM guarantees businesses survival through work area recovery. Businesses activities constitute one of the most important segments in the survival of a country and thus, the ability to ensure their survival after any major disruption is integral. Workplace recovery entails protecting critical functions of business such as data centre so as to ensure continuity. An example of such endeavours is the recovery of world trade centre after 1993 bombings (Tilley, 1995, p.50-51). There has are various attempts at integrating emergency issues and business continuity into one owing to the realisation that the two are interconnected especially in event that occurs in large magnitude beyond business premises. This approach embraces the paradigm shift in emergency preparedness away from response capability to maintaining operational continuity (Hemond & Robert, 2012, p.408). Resilience of a nation rest on its adaptability and in this regard adaptability is mostly exhibited through institutions such as business organisations (Hemond & Robert, 2012, p.412-413). In UK, one of the major companies that illustrate the concept of BCM is PWC. PWC sees BCM as a vital part of its risk management. It has a strong team of experts who are experienced in ensuring high quality solutions that are easier to use (PWC UK 2013). According to PWC, it delivers three main service lines mainly for IT Disaster recovery, Integrated Risk Management, and Crisis Management. It utilizes resources and capability of the entire company in assisting integrate BCM in its entire business context, hence enabling it offer extra services to its customers (PWC UK 2013). Such extra services include supply chain, governance and compliance and real-time support. In conclusion, the business world is full of uncertainties. These uncertainties greatly predetermine business stability. The risks and uncertainties that business phase can originate from a natural factor or man-made factors. Anchored on this realisation, businesses have to be proactive in their approach so as to curtail any negative side effect that might arise out of these extreme externalities beyond their control. One such approach to managing the impacts rests on the formulation and application of business continuity management. In this regard, the aim of the paper was to assess the role of business continuity management both within the organisation and the contribution it makes to national resilience. The paper established that business continuity management is integral in business survival as it ensures continuity after any disruption by guaranteeing continued production as most value chains are immediately restored after any interruption. This in-turn ensures meeting of the expectation of various stakeholders and profitability of the organisation. Secondly, BCM contributes to creation of confidence among regulators as result of the fact that it constitutes one of the best practices. Thirdly the paper established that BCM is critical in protecting brand reputation, as it ensures effects are confined within the industry walls. References Botha, J & Von Solms, R 2004, A cyclic approach to business continuity planning. Information Management & Computer Security, Vol. 12, No. 4, p. 328-337. Bowie, N 2012, Corporate Social Responsibility in Business'. Creating Public Value in a Multi- sector, Shared Power World Foundation Paper. 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