Corporate Risk Management: Terrorist Attack

Corporate Risk Management: Terrorist Attack

The danger of terrorist attack is one of the most prominent topics in business today, particularly after the devastating events of 9/11 in 2001. These attacks placed new focus on the potential vulnerability of businesses in the Western world today. Terrorist organizations tend to focus on these areas of vulnerability in order to bring about destruction and threaten the way of life cultivated by countries such as the United States and the United Kingdom. It is particularly challenging to plan for terrorist attacks, as these entail unknown risks that are difficult to quantify. However, it is possible to learn from past attacks and also from the dynamics in the political and business world as they manifest themselves in the current paradigm. In planning for possible terrorist attacks, the quantification process forms only a single aspect of a many-faceted process.

While some argue that emergency and contingency planning with a focus on terrorist attacks is essentially ineffectual, as such attacks focus on the unknown risk factor and can therefore not be adequately quantified prior to the event itself. Nonetheless, the same is true of fire, flood, or other natural disasters. Contingency and emergency planning are by nature focused on unknown risk factors. A better argument is therefore that emergency planning at the very least serves to make all persons within a business aware of possible hazards, and helps them to react for optimal safety when disasters do occur. In planning for the event of terrorist attack then, several steps can be followed in order to optimize safety and minimize hazard in the workplace.

Risk identification is increasingly important in the face of the relative impossibility of quantifying an unknown such as terrorist attack. As mentioned above, what can be learned from the dynamic of the existing situation is highly important in the process of risk identification. By examining existing occurrences of terrorist attacks, some of the unknown factor can be removed from the threat. Furthermore, the exact nature of terrorism can be quantified in terms of definitions and key terms. This also mitigates much of the uncertainty surrounding the issue. Terrorism can for example be understood by the definition of threat and/or violence in order to achieve an end. Terrorists generally want to force the hand of those they attack, or to avenge what they perceive as wrongdoing by the victim of their threat.

Specifically, there are several ways in which terrorist attacks can manifest themselves. These include kidnapping, hijacking, murder, mass murder, explosive devices, chemical warfare, biological attacks, riots, civil unrest, and the use of hostages. The risk of terrorism can be quantified to a certain degree by assessing the likelihood of each type of terrorism for the business in question. Contingency and emergency actions can then be planned according to such quantifications. This is an especially important part of risk management for significantly large and prosperous companies.