Evaluate the extent to which contingency planning might help DA achieve its long-term aims and objectives.

Mark scheme

Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

1. [3] Knowledge: Definition of contingency planning: preparing an organisation's resources for unlikely events; This may also be referred to as crisis management and business continuity planning; Having a back-up plan or plan B; Part of business planning process; Reassures customers and staff that their interests are being considered; Reduces potential impact on customers in the event of a major disaster; Disasters may still occur; Can be expensive and time consuming especially for small businesses; There is the planning process and also the need to train staff for each possible eventuality
2. [3] Application: Problems with suppliers. This could be an area where contingency planning could be helpful in ensuring that disruption to production is minimised; If DA opt for strategy 1 it could be affected by the significant exchange rate movements predicted for country B. It is important to have considered how to respond to this change in the economic environment
3. [4] Analysis: With fore-planning the public relations response is much more likely to be quick and appropriate so that senior managers can manage the media attention and communicate effectively what the company intends to do, by when and how from disasters both in terms of costs and bad PR and loss of customer loyalty; Recognising major risks, such as fire, may actually reduce the risk of the disaster happening
4. [10] Evaluation: Avoiding disasters is better than planning what to do if they happen; Plans need to be updated frequently as the business develops; Cost of CP needs to be balanced against the potential costs of not doing it. Which potential disasters should be planned for?; How much time is spent on preparing and testing contingency plans?