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Impact of contingency planning
The impact of contingency planning for a given organization or situation
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"Anything that can go wrong will go wrong" - Murphy’s Law
This section of the syllabus requires students to understand the impact of contingency planning for a given organization or situation in terms of:
Cost
Time
Risks
Safety
The impacts can be positive or negative depending on the business or the circumstances.
Note to teachers:
In the previous syllabus (final exams N23), this section of the syllabus was worded as "The following advantages and disadvantages of contingency planning for a given organization or situation: Cost, Time, Risks, and Safety." and was taught to AO2 only.
Note that this has changed in the new syllabus (first exams M24) to AO3. Please be aware of this if referring to or using resources for the previous course, including past exam papers and mark schemes.
Common mistake!
Students often comment that contingency planning is a way for businesses to "prevent" a catastrophe or emergency from happening. This is incorrect. Contingency plans, as with any plan, is a forward thinking tool that can help businesses to manage risks associated with extraordinary and unexpected circumstances that could have a catastrophic outcome on the business and its stakeholders. Plans do not serve to prevent such events from actually happening.
Positive impacts of contingency planning for a given organization or situation
The positive impacts or advantages of contingency planning for a given business or situation can be explained under four main categories: Cost, Time, Risks, and Safety.
Cost
Contingency planning is far less expensive than dealing with a major crisis without a business continuity plan, especially if the case results in lawsuits. In other words, crisis management without contingency planning can be extremely costly.
Contingency plans can include plans for contingency funds (finance used for emergency purposes) in order to help deal with the costs of a crisis should it occur.
Effective contingency planning minimises the chances of the organization making expensive mistakes during a period of immense pressure. Hence, it can help to minimise financial losses incurred during a crisis situation.
Time
A detailed contingency plan should help with making prompt and well-judged decisions at times of crisis. This can be invaluable and help the business to return to normality as quickly as possible.
Timely and well considered action plans help to reassure all stakeholders that in the event of a crisis, things will be dealt with effectively and the business will be in control of the situation.
Risks
Effective contingency planning enables organizations to be in a better position to deal with a crisis should it occur, thereby reducing the risks arising from a crisis.
Well-thought out contingency plans can help an organization to minimise the risks of a crisis occurring, especially quantifiable risks such as accidents or a fire in the workplace. In many case, this can limit financial losses for the organization and even prevent loss of life caused by workplace accidents.
Case study 1 - Risk assessments for school trips
Most schools have risk assessment for their education field trips, sports activities and other outdoor pursuits. These contingency plans are produced to keep students and staff as safe as possible. “What if” scenarios are examined so that teachers and students can be briefed after what to do in these different situations. This helps everyone to know what to do in the event of an emergency.
School teachers produce risk assessments for field trips
Discuss with students the procedures and processes that teachers need to go through when planning an educational visit (field trip). Some areas for discussion might include:
The paperwork involved, such as letters to parents/guardians, permission slips, and risk assessments
The involvement of the Senior Leadership Team (SLT) in risk assessment procedures and processes
Site visit(s) prior to taking students on the school trip / educational visit
First Aid training for teachers / adults attending the field trip
First Aid kits - How many? Whose responsibility? What is included in the kits?
Insurance
Post-trip / educational visit review - does this take place? With whom? Who and where are any accidents or near-misses recorded?
Who knows, but maybe the students might appreciate all the effort that goes on before they get to embark on an educational / field trip in future!
Safety
Contingency planning helps to protect the safety of employees and customers should a crisis occur. The safety of key stakeholder must be the priority for all businesses, which is why most organization have fire drills (fire evacuation processes).
Without a well thought out contingency plan, it is likely that in a crisis situation, organizations will be under immense pressure to make decisions in a hurry. This can seriously hinder the safety of workers and customers, especially if the wrong decision is made.
An effective contingency plan means that if a crisis occurs, the chances of the threat or damage is limited. This is because the crisis situation has been thought about, with clear plans to ensure the safety of both people and property.
Negative impacts of contingency planning for a given organization or situation
The negative impacts or disadvantages of contingency planning for a given business or situation can also be explained using the same four main categories: Cost, Time, Risks, and Safety.
As with the advantages of contingency planning for a given business or situation, the disadvantages can also be explained under the same four categories: Cost, Time, Risks and Safety.
Cost
Contingency planning can be extremely costly, e.g. the management costs involved in the planning process and the need to train staff to deal with the crisis scenarios.
Having insurance is likely to be part of good contingency planning, but this can be costly. In addition, some risks are unquantifiable so cannot be easily covered by insurance.
Planning for a potential limitless number of “what if” scenarios is both time consuming and costly.
Time
Contingency planning uses up valuable management time and resources in the planning process.
The crises planned for might never materialise, so may be of no real value to the organization but regarded as a waste of people’s times.
Risks
The time and cost involved in planning for some crises may not account for unquantifiable risks, such as the procedures to deal with a major workplace accident or an intruder or terrorist attack.
Contingency plans cannot fully prepare businesses for all eventualities and risks, such as the impact of certain crises such as natural disasters, the outbreak of infectious diseases or terrorist attacks.
Contingency plans are far less effective if they are static, so need regular review and updating. The degree and level of risks involved in a crisis situation are likely to be reduced with updated contingency plans – but this is both time consuming and expensive.
Safety
The costs of ensuring safety in the workplace can be extremely high, such as the costs of ensuring staff have first aid training.
As with all business decisions, there is an opportunity costs involved in ensuring that the contingency plan covers all aspects of safety. Risk assessments, for example, can be extremely lengthy yet not cover all aspects of work-related safety.
Case Study 2 - Safety first: Severe weather affecting IB examinations
It is common for IB World Schools to have contingency plans in the event that severe weather conditions mean that IB examinations have to be postponed. For example, in some countries, severe monsoons, typhoons and flooding in May mean that students are unable to travel to school to take their external exams.
Therefore, schools need to include a detailed communications strategy that outlines how students, parents and staff will be contacted in the event of such an incident. Take a look at this example here from the English Schools Foundation in Hong Kong.
Snowstorms can cause school closures, even during exams
During the coronavirus pandemic, many IB World Schools across the world needed contingency plans as it was uncertain whether the public exams would proceed in May 2021. The IB and schools had learnt some lessons following the issues of all IB examinations being cancelled in May 2020 and contingencies being in place for the November 2021 exams. On 15th February 2021, the IB announced cancellation of its examinations in the United Kingdom, for a second year running.
Less than a week later, the IB also announced that the May 2022 and November 2022 exams would also be shortened, and mirror the changes communicated about the May 2021 and November 2021 exams. Discuss the lessons that schools leaders, teachers, parents and IB students may have learned from past contingencies.
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