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Charrah Hardamon — Customer Success Strategist, Reflektive
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Every business should plan properly to avoid problems. Business managers
should follow contingency planning it means the development of alternative
plans for use in case of problems arising within the organization or outside
the organization. This type of planning allows a business to cope with a
variety of crisis listed below.
Finance
In case of liquidity, large firms may have contingency funds set aside.
Other solutions include finding an alternative fund to deal with a short-term
lack of finance.
Production
A business must arrange alternative sources as a solution to interruptions
in production. Some of the work may be handed over or outsourced to other
producers. It may also be able to switch production from one machine or factory
to another. Rearranging the time of production and dealing with a pool of
suppliers can prove to be useful as well.
Human Resource Management
An effective consultation will help minimize difficulties and may speed up
the solution to industrial relations problems. Similarly, motivational rewards
may be used to deal with poor staff motivation. A flexible workforce comes in
handy if the business is faced with a lack of employees as a result of high
labor turnover.
Image
Faulty products or damage to the environment can have an enormous effect on
the image of a business. A business must act quickly and effectively when faced
with image problems. Faulty products must be withdrawn immediately. The
management needs to focus on extensive promotion in an attempt to alleviate any
public concern for its products. Practices such as recycling may be
highlighted.
Management and communication
Management has a vital role to play in times of crisis. There must be
strong leadership from the top of the company hierarchy and every member of the
organization should be clear about his role and responsibilities. A business
needs clear communication channels to ensure that messages are being passed on
effectively. Contingency planning is important but the business must not let it
affect the corporate plans. For example, keeping a larger amount in contingency
fund may reduce the funds that a business has for investment or expansion.
